A-96689, SEPTEMBER 30, 1938, 18 COMP. GEN. 285

A-96689, SEPTEMBER 30, 1938, 18 COMP. GEN. 285

CONTRACTS - SPECIFICATIONS - ADMINISTRATIVE DISCRETION LIMITATIONS AND GOVERNMENT ACCOUNTING OFFICERS' DUTIES - WAGE RATE, LABOR ORGANIZATION, PAY ROLL DATA REPORTING, PUBLIC LIABILITY, CONTRACTOR-EMPLOYEES' SAFETY, ETC., STIPULATIONS ALTHOUGH THE CONGRESS IN MAKING APPROPRIATIONS UNDER ITS EXCLUSIVE, JURISDICTION AS CONFERRED BY THE CONSTITUTION LEAVES LARGELY TO ADMINISTRATIVE DISCRETION THE CHOICE OF WAYS AND MEANS TO ACCOMPLISH THE OBJECTS OF THE APPROPRIATION, THAT ADMINISTRATIVE DISCRETION MAY NOT TRANSCEND THE STATUTES, NOR BE EXERCISED IN CONFLICT WITH LAW, NOR FOR THE ACCOMPLISHMENT OF PURPOSES UNAUTHORIZED BY THE APPROPRIATION, AND UNAUTHORIZED OBJECTIVES MAY LEGALLY NO MORE BE REACHED INDIRECTLY BY STIPULATIONS IN CONTRACTS CHARGEABLE TO THE APPROPRIATION THAN BY DIRECT EXPENDITURE. THE ACCOUNTING OFFICERS OF THE GOVERNMENT ARE NOT CONCERNED WITH THE APPARENT GENERAL MERIT OF A PROPOSED EXPENDITURE, BUT WHETHER THE CONGRESS, CONTROLLING THE PURSE, HAS BY LAW AUTHORIZED THE EXPENDITURE INVOLVED, AND OMISSIONS FROM CONTRACTS OF PROVISIONS REQUIRED BY LAW TO BE INCLUDED THEREIN, AS WELL AS INCLUSIONS IN CONTRACTS OF PROVISIONS NOT AUTHORIZED BY LAW AND OUTSIDE THE APPROPRIATIONS, NECESSARILY ARE FOR QUESTIONING ON THE FUNDAMENTAL BASIS THAT IT IS FOR THE CONGRESS TO SAY HOW AND ON WHAT CONDITIONS PUBLIC MONEYS SHALL BE SPENT. CONTRACT STIPULATIONS TENDING TO RESTRICT COMPETITION AND TO INCREASE THE COST OF PERFORMANCE ARE UNAUTHORIZED UNLESS REASONABLY REQUISITE TO THE ACCOMPLISHMENT OF THE LEGISLATIVE PURPOSES OF THE CONTRACT APPROPRIATION INVOLVED, OR UNLESS SUCH STIPULATIONS ARE EXPRESSLY AUTHORIZED BY STATUTE, AND WHERE THE CONGRESS HAS LEGISLATED ON THE SUBJECT IT IS NOT OPEN TO ADMINISTRATIVE DISCRETION TO STIPULATE CONTRACT CONDITIONS BEYOND OR AT VARIANCE WITH THOSE DIRECTED BY STATUTE. THERE IS NO AUTHORITY OF LAW FOR INCLUSION IN FARM SECURITY ADMINISTRATION CONSTRUCTION CONTRACTS UNDER THE EMERGENCY RELIEF APPROPRIATION ACT OF 1938, 52 STAT. 809, OF A PROVISION THAT THE CONTRACTOR SHALL NOT INTERFERE WITH THE SELF-ORGANIZATION OF HIS EMPLOYEES OR REFUSE TO BARGAIN COLLECTIVELY WITH THE REPRESENTATIVES OF A MAJORITY OF HIS EMPLOYEES. 15 COMP. GEN. 201, DISTINGUISHED. THERE IS NO AUTHORITY FOR THE INCLUSION IN FARM SECURITY ADMINISTRATION CONSTRUCTION CONTRACTS UNDER THE EMERGENCY RELIEF APPROPRIATION ACT OF 1938, 52 STAT. 809, OF A PROVISION REQUIRING CONTRACTORS REGULARLY TO COLLATE AND REPORT PAY ROLL AND OTHER STATISTICAL DATA, NOTWITHSTANDING THE AUTHORITY GRANTED BY SECTION 7 OF THE SAID ACT TO ADMINISTRATIVE HEADS IN PRESCRIBING RULES AND REGULATIONS, AND THE BROAD POWERS AND WIDE DISCRETION IN THE PRIOR EMERGENCY RELIEF APPROPRIATION ACTS UNDER WHICH THE PRESIDENT DIRECTED THAT SUCH REPORTS BE MADE. THERE IS NO AUTHORITY OF LAW FOR INCLUSION IN FARM SECURITY ADMINISTRATION CONSTRUCTION CONTRACTS UNDER THE EMERGENCY RELIEF APPROPRIATION ACT OF 1938, 52 STAT. 809, OF A PROVISION THAT IF ECONOMIC CONDITIONS CHANGE MINIMUM WAGE RATES MAY BE ESTABLISHED FROM TIME TO TIME DIFFERENT FROM THOSE SPECIFIED IN THE CONTRACT, THE CONTRACT PRICE TO BE ADJUSTED UPWARD OR DOWNWARD ACCORDINGLY. THERE IS NO LEGAL OBJECTION TO THE INCLUSION IN FARM SECURITY ADMINISTRATION CONSTRUCTION CONTRACTS UNDER THE EMERGENCY RELIEF APPROPRIATION ACT OF 1938, 52 STAT. 809, OF A PROVISION REQUIRING THE CONTRACTOR TO FURNISH PUBLIC LIABILITY INSURANCE AGAINST INJURIES TO MEMBERS OF THE PUBLIC FROM ACCIDENTS WHICH MAY ARISE FROM OPERATIONS PERFORMED UNDER THE CONTRACT, AND FIRE AND TORNADO INSURANCE UPON ALL WORK IN PLACE AND ALL MATERIALS STORED AT THE BUILDING SITE, IF IT IS ADMINISTRATIVELY DETERMINED THAT SUCH STIPULATIONS ARE REASONABLY NECESSARY TO THE OBJECTS OF THE APPROPRIATION. THERE IS NO LEGAL OBJECTION TO THE INCLUSION IN FARM SECURITY ADMINISTRATION CONSTRUCTION CONTRACTS UNDER THE EMERGENCY RELIEF APPROPRIATION ACT OF 1938, 52 STAT. 809, OF A PROVISION REQUIRING CONTRACTORS AT ALL TIMES TO EXERCISE REASONABLE PRECAUTIONS FOR THE SAFETY OF EMPLOYEES AND TO COMPLY WITH ALL APPLICABLE PROVISIONS OF FEDERAL, STATE, AND MUNICIPAL SAFETY LAWS, AND BUILDING AND CONSTRUCTION CODES, IF IT IS ADMINISTRATIVELY DETERMINED THAT SUCH STIPULATIONS ARE REASONABLY NECESSARY TO THE PURPOSES OF THE APPROPRIATION.

ACTING COMPTROLLER GENERAL ELLIOTT TO THE SECRETARY OF AGRICULTURE, SEPTEMBER 30, 1938:

YOUR LETTER OF SEPTEMBER 1, 1938, RAISES FUNDAMENTAL QUESTIONS RESPECTING THE EXTENT OF ADMINISTRATIVE DISCRETION TO INCLUDE VARIOUS REQUIREMENTS IN PUBLIC CONTRACTS AND SETS FORTH AS FOLLOWS:

REFERENCE IS MADE TO YOUR LETTER DATED AUGUST 3, 1938, A-96689, CONCERNING FORM OF CONSTRUCTION CONTRACT, FORM FSA-GEN. 162 (REVISED) 2- 16-38, (APPROVED BY THE SECRETARY OF THE TREASURY ON FEBRUARY 16, 1938), HERETOFORE UTILIZED BY THE FARM SECURITY ADMINISTRATION. YOUR LETTER MAKES CERTAIN COMMENTS CONCERNING VARIOUS PROVISIONS OF THE CONTRACT, GENERAL CONDITIONS AND "STATEMENT OF CONTRACTORS' QUALIFICATIONS," AND REQUESTS A REPORT THEREON. THE MATTERS REFERRED TO WILL BE ANSWERED IN THE ORDER APPEARING IN YOUR COMMUNICATION.

THE FIRST COMMENT MADE IN YOUR LETTER IS WITH REFERENCE TO ARTICLE 17 (C) OF THE CONTRACT FORM, WHICH PROVIDES THAT IN THE EVENT THE HEAD OF THE DEPARTMENT FROM TIME TO TIME ESTABLISHES DIFFERENT MINIMUM-WAGE RATES FROM THOSE SPECIFIED IN THE CONTRACT, THE CONTRACT PRICE SHALL BE ADJUSTED UPWARD OR DOWNWARD ACCORDINGLY. IN YOUR DECISION IN 17 COMP. GEN. 471, IT WAS HELD, WITH REFERENCE TO PROPOSED SPECIFICATIONS TO BE USED IN CONNECTION WITH CONTRACTS TO WHICH THE BACON-DAVIS ACT, 49 STAT. 1011, WAS APPLICABLE, THAT THE SPECIFICATIONS COULD NOT PROPERLY PROVIDE FOR PERIODIC ADJUSTMENT BY THE SECRETARY OF LABOR OF THE MINIMUM RATES OF WAGES STATED IN THE CONTRACT. YOUR DECISION WAS APPARENTLY BASED LARGELY UPON THE PROPOSITION THAT THE BACON-DAVIS ACT SPECIFICALLY PROVIDES THAT ADVERTISED SPECIFICATIONS SHALL CONTAIN A PROVISION STATING THE MINIMUM WAGES TO BE PAID, AND THAT THE PURPOSE OF THE PROVISION IS TO MAKE DEFINITE AND CERTAIN, AT THE TIME A CONTRACT IS ENTERED INTO, THE CONTRACT PRICE AND THE MINIMUM WAGES TO BE PAID THEREUNDER. YOUR DECISION HELD THAT THE INSERTION OF A PROVISION THAT WAGE RATES WOULD BE SUBJECT TO CHANGE WOULD RENDER THE GOVERNMENT'S OBLIGATION THEREUNDER INDEFINITE IN AMOUNT AND MIGHT INVOLVE AN OBLIGATION IN EXCESS OF THE APPROPRIATIONS AVAILABLE FOR ITS PAYMENT.

THE APPLICABLE PROVISION SET FORTH IN FORM FSA-GEN. 162 (REVISED) WOULD NOT APPEAR TO BE IN CONFLICT WITH THAT DECISION. THE WAGE RATES SET FORTH IN THE ADVERTISED SPECIFICATIONS IN CONNECTION WITH FORM FSA GEN. 162 (REVISED) WERE PRESCRIBED IN ACCORDANCE WITH SECTION 2 OF THE EMERGENCY RELIEF APPROPRIATION ACT OF 1937, 50 STAT. 352, WHICH PROVIDED "THAT THE RATES OF PAY FOR PERSONS ENGAGED UPON PROJECTS UNDER THE FOREGOING APPROPRIATION SHALL BE NOT LESS THAN THE PREVAILING RATES OF PAY FOR WORK OF A SIMILAR NATURE * * *.' NEITHER THE ACT NOT ANY EXECUTIVE ORDER ISSUED THEREUNDER PROVIDED THAT THE PREVAILING RATES OF PAY WOULD BE LIMITED TO THOSE RATES APPLICABLE AT THE TIME THE SPECIFICATIONS WERE ISSUED OR THE CONTRACTS ENTERED INTO. MOREOVER, IT WOULD SEEM THAT IT MAY BE REASONABLY MAINTAINED THAT CONGRESS INTENDED BY THE TERM "PREVAILING RATES OF PAY" TO INCLUDE THOSE RATES OF PAY PREVAILING FROM TIME TO TIME, AND THAT IF FUNDAMENTAL CHANGES IN ECONOMIC CONDITIONS OCCURRED, THE HEAD OF THE DEPARTMENT CONCERNED SHOULD HAVE THE POWER TO SET DIFFERENT RATES FROM THOSE SPECIFIED IN THE CONTRACT. IT WILL BE NOTED, FURTHERMORE, THAT THE CLAUSE IN QUESTION WAS NOT LIMITED IN EXTENT TO THE INCREASING OF WAGE RATES. THE CLAUSE PROVIDED SPECIFICALLY THAT IN THE EVENT OF SUCH CHANGE, THE CONTRACT PRICE SHOULD BE ADJUSTED ACCORDINGLY, I.E., INCREASED BY AN AMOUNT EQUAL TO ANY INCREASED COST, OR DECREASED IN AN AMOUNT EQUAL TO ANY DECREASED COST, RESULTING FROM SUCH CHANGE.

WITH REFERENCE TO THE STATEMENT IN THE DECISION IN 17 COMP. GEN. 471 TO THE EFFECT THAT SUCH PROVISION WAS ALSO OBJECTIONABLE IN THAT IT WOULD RENDER THE GOVERNMENT'S OBLIGATION THEREUNDER INDEFINITE IN AMOUNT "AND MIGHT INVOLVE AN OBLIGATION IN EXCESS OF THE AMOUNT OF THE APPROPRIATION AVAILABLE FOR ITS PAYMENT," THE PROVISION INVOLVED WOULD NOT APPEAR TO BE SO INDEFINITE IN EXTENT AS TO CONSTITUTE, IN FACT, AN OBLIGATION WHICH MIGHT BE IN EXCESS OF AVAILABLE APPROPRIATIONS. THERE APPEAR TO BE OTHER PROVISIONS IN CONSTRUCTION CONTRACTS WHICH AUTHORIZE PAYMENTS TO CONTRACTORS OF SUMS IN ADDITION TO THOSE EXPRESSLY PROVIDED FOR IN THE CONTRACTS AND, IN THAT SENSE, ARE "INDEFINITE.' FOR EXAMPLE, ARTICLE 4 OF FORM FSA-GEN. 162 AND OF U.S. STANDARD FORM NO. 23 (REVISED SEPTEMBER 9, 1935), PROVIDES THAT IN THE EVENT THE CONTRACTOR ENCOUNTERS OR THE GOVERNMENT DISCOVERS SUBSURFACE OR LATENT CONDITIONS MATERIALLY DIFFERING FROM THOSE SHOWN ON THE DRAWINGS OR INDICATED IN THE SPECIFICATIONS, ETC., THE CONTRACTING OFFICER SHALL PROMPTLY INVESTIGATE CONDITIONS "AND IF HE FINDS THAT THEY DO SO MATERIALLY DIFFER, THE CONTRACT SHALL, WITH THE WRITTEN APPROVAL OF THE HEAD OF THE DEPARTMENT OR HIS DULY AUTHORIZED REPRESENTATIVE, BE MODIFIED TO PROVIDE FOR ANY INCREASE OR DECREASE OF COST AND/OR DIFFERENCE IN TIME RESULTING FROM SUCH CONDITIONS.' THE PROVISION REQUIRING A CONTRACTOR TO PAY "PREVAILING WAGES," I.E., THOSE WAGES WHICH ARE PREVAILING FROM TIME TO TIME, WOULD APPEAR TO BE NO MORE INDEFINITE THAN THE PROVISION QUOTED IMMEDIATELY ABOVE. IT IS REALIZED THAT YOUR DECISION DATED JANUARY 28, 1938, A-91847, ADDRESSED TO THE SECRETARY OF THE INTERIOR, INVOLVED THE EMERGENCY RELIEF APPROPRIATION ACT OF 1937. IT IS BELIEVED, HOWEVER, THAT THE CONTENTIONS SET FORTH ABOVE HAVE NOT BEEN PREVIOUSLY PRESENTED TO YOUR OFFICE.

YOUR ATTENTION IS DIRECTED FURTHERMORE, TO THE CIRCULAR ISSUED BY YOUR OFFICE UNDER DATE OF APRIL 2, 1938, A-51607 AND A-49009, ENTITLED: "TYPES OF CERTIFICATIONS BY CONTRACTORS AND VENDORS IN SUPPORT OF INVOICES OR PUBLIC VOUCHERS FOR PURCHASES AND SERVICES OTHER THAN PERSONAL: STANDARD FORM 1034--- REVISED (GENERAL REGULATIONS NO. 51,SUPPLEMENT NO. 7, JUNE 8, 1937).' ITEM 2 OF THE CIRCULAR DEALS WITH REDUCTIONS IN WAGE RATES UNDER CONTRACTS WHICH PROVIDE THAT THE GOVERNMENT IS TO RECEIVE THE BENEFIT OF ANY REDUCTION IN WAGE RATES, AND SETS FORTH THE FOLLOWING CERTIFICATION TO BE FURNISHED BY CONTRACTORS IN CONNECTION WITH SUCH PROVISION:"I CERTIFY THAT THE UNITED STATES RECEIVED THE BENEFIT OF REDUCTION, IF ANY, IN THE WAGE RATE/S) IN ACCORDANCE WITH THE STIPULATIONS UNDER THE CONTRACT.' WOULD APPEAR, THEREFORE, THAT YOUR OFFICE THEREBY APPROVED CONTRACTUAL PROVISIONS WHICH CALLED FOR CHANGES IN WAGE RATES UNDER CERTAIN CONDITIONS.

IT MAY ALSO BE NOTED THAT IN NO INSTANCE HAVE WAGES BEEN MODIFIED OR CONTRACT PRICES CHANGED BECAUSE OF THE PROVISION, AND THAT ON JULY 28, 1938, THE CHIEF OF THE PURCHASE SECTION OF THE BUSINESS MANAGEMENT DIVISION, FARM SECURITY ADMINISTRATION, INFORMED THE AUDIT DIVISION OF YOUR OFFICE THAT SUBSEQUENT TO THAT DATE THE PARAGRAPH RELATIVE TO THE ADJUSTMENT OF CONTRACT PRICES DUE TO CHANGES IN THE MINIMUM-WAGE RATES WOULD BE DELETED FROM ALL CONSTRUCTION CONTRACTS ENTERED INTO BY THE FARM SECURITY ADMINISTRATION. THE CLAUSE WAS ACCORDINGLY DELETED SUBSEQUENT TO THAT DATE, BUT YOUR RECONSIDERATION OF THE PROBLEM IS NEVERTHELESS REQUESTED BECAUSE OF THE FACT THAT IT IS DESIRED, AS WILL BE STATED SUBSEQUENTLY IN THIS LETTER, TO INCLUDE SUCH PROVISION IN CONTRACTS WHICH WILL BE ENTERED INTO PURSUANT TO THE EMERGENCY RELIEF APPROPRIATION ACT OF 1938, 52 STAT. 809.

THE SECOND COMMENT MADE BY YOUR LETTER RELATES TO ARTICLE 17 (E) OF THE CONTRACT FORM WHICH PROVIDES THAT THE CONTRACTOR AND SUBCONTRACTOR SHALL REPORT TO THE DEPARTMENT OF LABOR CONCERNING PAY ROLLS, MAN-HOURS WORKED, ETC. THIS DEPARTMENT HAS NOTED THE REFERENCE TO YOUR DECISION OF 17 COMP. GEN. 700, AMPLIFYING 17 COMP. GEN. 585. THESE DECISIONS WOULD NOT APPEAR TO BE APPLICABLE, INASMUCH AS THE PROVISION IS MADE MANDATORY BY SECTION 9 OF THE EXECUTIVE ORDER NO. 7083, DATED JUNE 24, 1935 (AS CONTINUED IN EFFECT BY EXECUTIVE ORDER NO. 7396, DATED JUNE 27, 1936, AND EXECUTIVE ORDER NO. 7649, DATED JUNE 29, 1937), WHICH REQUIRES THAT THE PROVISION BE INCORPORATED VERBATIM IN ALL CONTRACTS AND SUBCONTRACTS FOR WORK ON PROJECTS.

THE THIRD COMMENT MADE BY YOUR LETTER RELATES TO ARTICLE 19 (G) OF THE CONTRACT FORM, WHICH PROVIDES THAT THE CONTRACTOR SHALL NOT INTERFERE WITH THE SELF-ORGANIZATION OF HIS EMPLOYEES OR REFUSE TO BARGAIN COLLECTIVELY WITH THE REPRESENTATIVES OF A MAJORITY OF HIS EMPLOYEES. YOUR LETTER REFERS TO 17 COMP. GEN. 37, WHEREIN IT WAS HELD THAT THE CONGRESS HAS PROVIDED THE MEANS OF ENFORCING COMPLIANCE WITH THE REQUIREMENTS OF THE NATIONAL LABOR RELATIONS ACT,"BUT THE WITHHOLDING OF GOVERNMENT CONTRACTS FROM A VIOLATOR OF SUCH REQUIREMENTS IS NOT ONE OF THE MEANS SO PROVIDED.' YOU HELD FURTHER THAT "THERE IS NOTHING* * * TO REQUIRE THAT PERSONS OR FIRMS BIDDING ON GOVERNMENT BUSINESS SHALL CERTIFY OR OTHERWISE AFFIRMATIVELY SIGNIFY THAT THEY ARE COMPLYING WITH AND/OR DESIRE TO COMPLY WITH THE NATIONAL LABOR RELATIONS ACT.'

IT WILL BE NOTED THAT THE CONTRACT FORM DOES NOT ATTEMPT TO BAR FROM BIDDING ON CONTRACTS OF THE FARM SECURITY ADMINISTRATION PERSONS OR CONCERNS WHO HAVE BEEN HELD BY THE NATIONAL LABOR RELATIONS BOARD TO HAVE VIOLATED THE NATIONAL LABOR RELATIONS ACT. THE PROVISION REQUIRES THE CONTRACTOR NOT TO INTERFERE WITH THE SELF-ORGANIZATION OF HIS EMPLOYEES OR TO REFUSE TO BARGAIN COLLECTIVELY WITH THEIR REPRESENTATIVES, AND IT IS BELIEVED THAT THE PROVISION IS MERELY REQUIRING THE CONTRACTOR TO OBEY THE LAW OF THE LAND. THIS WOULD NOT SEEM TO BE IMPROPER IN THE LIGHT OF PRIOR DECISIONS OF YOUR OFFICE WHICH HAVE HELD THAT FAILURE OR REFUSAL TO COMPLY WITH PUBLIC LAW JUSTIFIES REJECTION OF A LOW BID OTHERWISE PROPERLY FOR ACCEPTANCE UNDER THE LAW. FOR EXAMPLE, IN YOUR DECISION DATED MAY 13, 1938, A 92377 AND A-89958, THERE WAS UPHELD A CONTRACTUAL PROVISION REQUIRING COMPLIANCE WITH MILK REGULATIONS ISSUED UNDER THE AGRICULTURAL ADJUSTMENT ACT, SINCE IT ,WAS INTENDED AS A REQUIREMENT THAT CONTRACTORS SHOULD COMPLY WITH A PUBLIC LAW.' THE DECISION STATED THAT "IT HAS BEEN HELD THAT FAILURE OR REFUSAL TO COMPLY WITH PUBLIC LAW JUSTIFIES REJECTION OF A LOW BID OTHERWISE PROPERLY FOR ACCEPTANCE UNDER THE LAW, 15 COMP. GEN. 201.' IT WOULD APPEAR TO FOLLOW THAT IF BIDDERS MAY BE REQUIRED BY ADVERTISED SPECIFICATIONS TO COMPLY WITH THE PUBLIC LAW, A CONTRACT BASED UPON THE SPECIFICATIONS MAY PROVIDE THAT FAILURE TO OBSERVE SUCH LAW SHALL CONSTITUTE A VIOLATION OF THE CONTRACT.

FURTHERMORE, YOUR CIRCULAR OF APRIL 2, 1938, A-51607, AND A-49009, SUPRA, WITH REFERENCE TO CERTIFICATIONS REQUIRED BY YOUR OFFICE OF CONTRACTORS AND VENDORS, PROVIDES A FORM OF CERTIFICATION TO BE USED IN CONNECTION WITH "WAGES, RIGHTS, AND HOURS OF WORK OF EMPLOYEES * * *.' THE CERTIFICATION PRESCRIBED IS AS FOLLOWS: "I CERTIFY THAT THE STIPULATIONS REQUIRED BY LAW AND/OR UNDER CONTRACT, ETC., WITH RESPECT TO WAGES, RIGHTS, AND HOURS OF WORK OF EMPLOYEES HAVE BEEN COMPLETED WITH.' THE CIRCULAR THEN CITES AS EXAMPLES THE LABOR STIPULATIONS CONTAINED IN VARIOUS ACTS, ONE OF THEM BEING THE NATIONAL LABOR RELATIONS ACT, 49 STAT. 449. IT WOULD SEEM, THEREFORE, THAT YOUR OFFICE THEREBY APPROVED THE REQUIREMENT THAT CONTRACTORS COULD BE CALLED UPON TO COMPLY WITH THE NATIONAL LABOR RELATIONS ACT. IF IN YOUR OPINION, HOWEVER, THERE IS NO LEGAL AUTHORITY FOR THE INCLUSION IN FORM FSA-GEN 162 OF PARAGRAPH 19 (G), IT WILL BE OMITTED FROM ALL FUTURE SPECIFICATIONS AND CONTRACTS.

YOUR LETTER THEN REFERS TO PARAGRAPH 11 OF FORM FSA-GEN. 164, "STATEMENT OF CONTRACTORS' QUALIFICATIONS" (WHICH PROVIDES THAT IT WILL BE TO THE ADVANTAGE OF BIDDERS TO FILE PERFORMANCE RECORDS WITH THE BUREAU OF CONTRACT INFORMATION, INC.), AND STATES THAT "IT WILL BE NOTED THAT THE GOVERNMENT HERE ADVERTISES A PRIVATE ORGANIZATION SPONSORED BY THE SURETY COMPANIES AND HELPS BUILD THE BUREAU'S FILE OF RECORDS WHILE THE GOVERNMENT PAYS THE BUREAU FOR REPORTS ISSUED TO THE GOVERNMENT.' YOUR DECISION A-55460, DATED JUNE 22, 1934, CITED IN YOUR LETTER, DEALS WITH A CONTRACT ENTERED INTO WITH THE BUREAU OF CONTRACT INFORMATION, INC., BY THE FEDERAL EMERGENCY ADMINISTRATION OF PUBLIC WORKS. IT MAY BE NOTED THAT NO CONTRACT HAS BEEN ENTERED INTO BETWEEN THE FARM SECURITY ADMINISTRATION AND THE BUREAU OF CONTRACT INFORMATION, INC., AND THAT THAT ADMINISTRATION HAS NOT MADE ANY PAYMENTS TO SAID BUREAU FOR ANY REPORTS, OR OTHERWISE. IT IS BELIEVED THAT THE FARM SECURITY ADMINISTRATION DERIVES A DISTINCT BENEFIT FROM THE INCLUSION OF THE REFERENCE TO THE BUREAU, INASMUCH AS IT RENDERS PAST PERFORMANCE AND PERSONNEL REPORTS WITHOUT CHARGE, AND IT HAS BEEN ADMINISTRATIVELY FOUND THAT THE COMPREHENSIVE SURVEY GIVEN IN THESE REPORTS IS OF VERY VALUABLE ASSISTANCE IN DETERMINING THE QUALIFICATIONS OF VARIOUS BIDDERS FOR CONSTRUCTION WORK BEING PERFORMED BY THE FARM SECURITY ADMINISTRATION UNDER CONTRACT. IT IS BELIEVED THAT IT WILL BE DEFINITELY BENEFICIAL TO THE GOVERNMENT TO RETAIN PARAGRAPH 11 OF THE FORM, AS OTHERWISE THE DELAY IN THE AWARDING OF CONSTRUCTION CONTRACTS AND THE EXPENSE INVOLVED IN THE COMPILATION OF REPORTS INDICATING THE NECESSARY QUALIFICATIONS OF BIDDERS WOULD, IN THE OPINION OF THIS DEPARTMENT, BE DETRIMENTAL TO THE BEST INTERESTS OF THE GOVERNMENT. YOUR CONCLUDING COMMENT IS DIRECTED TO PARAGRAPHS 42 (C) AND (D), GENERAL CONDITIONS, FORM FSA GEN 165, 3-5-38, WHICH PROVIDE THAT THE CONTRACTOR SHALL CARRY PUBLIC LIABILITY INSURANCE, AND SHALL MAINTAIN INSURANCE AGAINST LOSS BY FIRE AND TORNADO ON ALL WORK IN PLACE AND ON ALL MATERIALS STORED AT THE BUILDING SITE WHETHER OR NOT COVERED BY PARTIAL PAYMENTS MADE BY THE GOVERNMENT. YOUR LETTER STATES THAT THERE HAS NOT BEEN SHOWN THE AUTHORITY OF LAW FOR THE INSERTION IN THE ADVERTISED SPECIFICATIONS OF THESE CONDITIONS, WHICH LEAD TO AN INCREASED CHARGE AGAINST THE APPROPRIATION. IT IS BELIEVED THAT THE PROVISIONS IN QUESTION ARE CUSTOMARY AND NORMAL PROVISIONS WHICH APPEAR IN ALMOST ALL PRIVATE CONSTRUCTION CONTRACTS OF ANY APPRECIABLE AMOUNT. IT IS A KNOWN FACT THAT NOTWITHSTANDING ANY PRECAUTIONS TAKEN IN CONNECTION WITH CONSTRUCTION WORK, SOME INJURIES ARE BOUND TO OCCUR NOT ONLY TO EMPLOYEES OF THE CONTRACTOR AND SUBCONTRACTOR BUT ALSO TO THE PUBLIC. YOUR OFFICE APPEARS TO HAVE RECOGNIZED THIS IN CONNECTION WITH THE PRACTICE BY VARIOUS DEPARTMENTS OF THE GOVERNMENT OF REQUIRING CONTRACTORS TO FURNISH WORKMEN'S COMPENSATION AND EMPLOYEES' GENERAL LIABILITY INSURANCE. YOUR DECISION DATED FEBRUARY 9, 1937, A-83163, ARTICLE 21 OF P.W.A. FORM 51, APPROVED BY THE FEDERAL EMERGENCY ADMINISTRATION OF PUBLIC WORKS AND REVISED OCTOBER 1, 1935, WAS CITED WITH APPROVAL. THE ARTICLE READS AS FOLLOWS:

"ART. 21. COMPENSATION INSURANCE.--- THE CONTRACTOR SHALL PROVIDE ADEQUATE WORKMEN'S COMPENSATION INSURANCE FOR ALL LABOR EMPLOYED ON THE PROJECT WHO MAY COME WITHIN THE PROTECTION OF SUCH LAWS AND SHALL PROVIDE, WHERE PRACTICABLE, EMPLOYERS' GENERAL LIABILITY INSURANCE FOR THE BENEFIT OF HIS EMPLOYEES NOT PROTECTED BY SUCH COMPENSATION LAWS, AND PROOF OF SUCH INSURANCE SATISFACTORY TO THE CONTRACTING OFFICER SHALL BE GIVEN.'

THIS PROVISION DOES NOT APPEAR TO HAVE BEEN SPECIFICALLY AUTHORIZED BY STATUTE (THE ACT OF JUNE 25, 1936, 49 STAT. 1938, MERELY EXTENDING STATE WORKMEN'S COMPENSATION LAWS TO PERSONS EMPLOYED ON FEDERAL CONSTRUCTION BEING PERFORMED UNDER CONTRACT). IN BOTH THE CASE OF WORKMEN'S COMPENSATION INSURANCE AND PUBLIC LIABILITY INSURANCE THERE DOES NOT APPEAR TO BE A STATUTORY REQUIREMENT THAT CONTRACTORS MUST PROVIDE SUCH INSURANCE, AND I AM ADVISED THAT THERE IS NO RESPONSIBILITY UPON THE GOVERNMENT FOR INJURIES TO MEMBERS OF THE PUBLIC OR TO EMPLOYEES OF THE CONTRACTOR. IT WOULD SEEM, THEREFORE, THAT IF OBJECTION IS NOT RAISED TO THE REQUIREMENT THAT A CONTRACTOR PROVIDE WORKMEN'S COMPENSATION INSURANCE, OR WHERE PRACTICABLE, EMPLOYERS' GENERAL LIABILITY INSURANCE FOR THE BENEFIT OF HIS EMPLOYEES NOT PROTECTED BY COMPENSATION LAW, THERE SHOULD BE NO OBJECTION TO A SIMILAR REQUIREMENT THAT THE CONTRACTOR PROVIDE PUBLIC LIABILITY INSURANCE AS PROTECTION TO THE GENERAL PUBLIC.

IT SHOULD BE NOTED, FURTHERMORE, THAT, AS INDICATED ABOVE, THE REQUIREMENT THAT THE CONTRACTOR PROVIDE PUBLIC LIABILITY INSURANCE IS A COMMON AND USUAL ONE IN PRIVATE CONSTRUCTION CONTRACTS. IT MAY BE STATED WITH SOME CERTAINTY THAT EXPENDITURES FOR THIS PURPOSE BY CONTRACTORS ARE TREATED BY THEM AS A REGULAR EXPENSE OF OPERATION AND THUS INCLUDED IN THEIR OVERHEAD. CONSEQUENTLY, IT IS UNLIKELY THAT THE OBLIGATION TO FURNISH SUCH INSURANCE CAUSES ANY INCREASE IN BID PRICES. IN VIEW OF THIS FACT, IT WOULD APPEAR THAT THE POLICY SET FORTH ABOVE SHOULD BE GIVEN DUE WEIGHT AND THAT CONTRACTORS SHOULD BE REQUIRED TO PROVIDE PUBLIC LIABILITY INSURANCE.

WITH REFERENCE TO INSURANCE AGAINST LOSS BY FIRE AND TORNADO, IT IS BELIEVED THAT SUCH PROVISIONS, ALSO, ARE CUSTOMARY IN THE CONSTRUCTION INDUSTRY; THAT THE COST THEREOF IS ALSO A USUAL ONE, AND ONE WHICH IS TAKEN INTO CONSIDERATION BY CONTRACTORS IN FIXING COSTS OF OVERHEAD; AND THAT PRICES BID ON CONTRACT JOBS ARE CONSEQUENTLY NOT INCREASED BY THE INCLUSION OF SUCH PROVISIONS. ADMINISTRATIVELY IT IS BELIEVED THAT THE PROVISION SERVES A USEFUL PURPOSE, AND SHOULD BE CONTINUED IN EFFECT.

IT MAY BE NOTED THAT THE FORM OF GENERAL CONDITIONS UTILIZED BY THE FARM SECURITY ADMINISTRATION WAS ADAPTED LARGELY FROM THAT IN USE BY THE HOUSING DIVISION OF THE FEDERAL EMERGENCY ADMINISTRATION OF PUBLIC WORKS. SUCH GENERAL CONDITIONS CONTAINED PROVISIONS REQUIRING CONTRACTORS TO FURNISH PUBLIC LIABILITY, AND FIRE AND TORNADO INSURANCE, AND IT WAS THE UNDERSTANDING OF THIS DEPARTMENT THAT OBJECTION THERETO HAD NOT BEEN RAISED BY YOUR OFFICE. FURTHERMORE, ALTHOUGH REQUIRING CONTRACTORS TO FURNISH FIRE AND TORNADO INSURANCE MIGHT ORDINARILY BE CONSIDERED AN EVASION OF THE GENERAL POLICY OF THE GOVERNMENT NOT TO INSURE ITS PROPERTY, IT WOULD APPEAR THAT NO EVASION IS PRESENT IN THE CONTRACTUAL PROVISION UNDER DISCUSSION IN VIEW OF THE LANGUAGE OF 49 STAT. 2035, WHEREBY THE CONGRESS SPECIFICALLY AUTHORIZED THE TAKING OUT OF INSURANCE IN CONNECTION WITH THE MAINTENANCE AND OPERATION OF RESETTLEMENT-TYPE PROJECTS, (SEE, IN THIS CONNECTION, A-62983 AND A-94266, DATED JULY 29, 1938). IF IN YOUR OPINION, HOWEVER, OBJECTION MUST BE RAISED, AS A LEGAL MATTER, TO THE INCLUSION IN THE CONTRACT DOCUMENTS OF PROVISIONS REQUIRING THE CONTRACTOR TO FURNISH PUBLIC LIABILITY AND FIRE AND TORNADO INSURANCE, THE PROVISIONS WILL BE STRICKEN FROM ALL FUTURE SPECIFICATIONS AND CONTRACT DOCUMENTS.

THE OFFICIALS OF THE FARM SECURITY ADMINISTRATION CONCERNED INFORM ME THAT THEY WERE NOT FAMILIAR WITH YOUR DECISION IN 17 COMP. GEN. 37 WITH REFERENCE TO REQUIRING CONTRACTORS TO COMPLY WITH THE NATIONAL LABOR RELATIONS ACT, AND, AS STATED ABOVE, THE PARAGRAPH RELATIVE TO THE ADJUSTMENT OF CONTRACT PRICES DUE TO CHANGES IN MINIMUM-WAGE RATES HAS BEEN DELETED FROM CONSTRUCTION CONTRACTS ENTERED INTO BY THE FARM SECURITY ADMINISTRATION. IT APPEARS THAT THESE OFFICIALS HAVE BEEN UNDER THE IMPRESSION THAT THE CLAUSES RELATING TO PUBLIC LIABILITY AND FIRE AND TORNADO INSURANCE WERE PROPER AND DESIRABLE. THE PROVISIONS INVOLVED HAVE, IT SEEMS, BEEN CONTAINED IN CONTRACT DOCUMENTS (BOTH IN ORIGINAL AND REVISED FORMS THEREOF) WHICH HAVE BEEN IN USE BY THE FARM SECURITY ADMINISTRATION FOR A CONSIDERABLE PERIOD OF TIME, WITHOUT OBJECTION THERETO HAVING BEEN RAISED BY YOUR OFFICE. IT IS DOUBTFUL THAT THE PROVISIONS HAVE CAUSED ANY INCREASE IN PRICES TO THE GOVERNMENT, AND NO OBJECTION THERETO HAS BEEN RECEIVED FROM BIDDERS OR PROSPECTIVE BIDDERS. AS INDICATED, THE PROVISIONS WILL BE DELETED FROM ALL ADVERTISED SPECIFICATIONS AND CONTRACTS TO BE ENTERED INTO UNLESS YOUR REPLY TO THIS LETTER IS TO THE EFFECT THAT OBJECTION NEED NOT BE RAISED THERETO UNDER THE PROVISIONS OF THE 1938 EMERGENCY RELIEF APPROPRIATION ACT. IT IS REQUESTED, THEREFORE, IN VIEW OF THESE CIRCUMSTANCES, THAT IF VOUCHERS PRESENTED IN CONNECTION WITH THE CONTRACTS INVOLVED ARE OTHERWISE PROPER, CERTIFICATION THEREOF BE NOT WITHHELD BY YOUR OFFICE.

THE COMMENTS PREVIOUSLY MADE ON THE MATTERS SET FORTH IN YOUR LETTER APPLY TO CONTRACTS ENTERED INTO PURSUANT TO THE EMERGENCY RELIEF APPROPRIATION ACT OF 1937. THE EMERGENCY RELIEF APPROPRIATION ACT OF 1935, 1936, AND 1937 AUTHORIZED THE PRESIDENT TO PRESCRIBE SUCH RULES AND REGULATIONS AS MIGHT BE NECESSARY IN CARRYING OUT THE PURPOSES OF THE APPROPRIATIONS MADE BY SUCH ACTS. THUS, SECTION 2 OF THE 1937 ACT PROVIDED THAT "IN CARRYING OUT THE PURPOSES OF THE FOREGOING APPROPRIATION THE PRESIDENT IS AUTHORIZED (A) TO PRESCRIBE SUCH RULES AND REGULATIONS AS MAY BE NECESSARY * * *.' PURSUANT TO SUCH AUTHORIZATION, THE PRESIDENT PRESCRIBED VARIOUS RULES AND REGULATIONS PERTAINING TO HOURS OF LABOR, CONDITIONS OF EMPLOYMENT, ETC. FOR EXAMPLE, AS INDICATED ABOVE, THE PRESIDENT REQUIRED THAT CONTRACTORS FURNISH PAY ROLL REPORTS TO THE DEPARTMENT OF LABOR. IT IS CONTEMPLATED THAT IN THE FUTURE CONSTRUCTION CONTRACTS WILL BE ENTERED INTO BY THE FARM SECURITY ADMINISTRATION PURSUANT TO THE EMERGENCY RELIEF APPROPRIATION ACT OF 1938. THIS ACT PROVIDES, BY SECTION 7, THAT "IN CARRYING OUT THE PURPOSES OF THIS TITLE, THE HEADS OF THE DEPARTMENTS, ESTABLISHMENTS, AND AGENCIES TO WHICH FUNDS ARE APPROPRIATED HEREIN ARE AUTHORIZED TO PRESCRIBE SUCH RULES AND REGULATIONS AS MAY BE NECESSARY.' IT IS PROPOSED, IN ACCORDANCE WITH SUCH STATUTORY AUTHORIZATION, TO PRESCRIBE RULES AND REGULATIONS IN CONNECTION WITH CONSTRUCTION CONTRACTS TO BE ENTERED INTO BY THE FARM SECURITY ADMINISTRATION AND PAID FOR FROM FUNDS APPROPRIATED BY THE EMERGENCY RELIEF APPROPRIATION ACT OF 1938. I DESIRE, AS PART OF THESE RULES AND REGULATIONS, TO REQUIRE THAT THE FOLLOWING PROVISIONS, REFERRED TO IN YOUR LETTER AND IN THIS REPLY THERETO (WITH THE EXCEPTION OF THE PROVISION WITH REFERENCE TO ACCIDENT PREVENTION), BE INSERTED IN THE GENERAL CONDITIONS TO CONSTRUCTION CONTRACTS HEREAFTER ENTERED INTO BY THE FARM SECURITY ADMINISTRATION:

(1) A PROVISION PROVIDING THAT THE CONTRACTOR SHALL NOT INTERFERE WITH THE SELF-ORGANIZATION OF HIS EMPLOYEES OR REFUSE TO BARGAIN COLLECTIVELY WITH THE REPRESENTATIVES OF A MAJORITY OF HIS EMPLOYEES.

(2) A PROVISION REQUIRING THE CONTRACTOR AND SUBCONTRACTORS TO REPORT TO THE DEPARTMENT OF LABOR THE NUMBER OF PERSONS ON THEIR RESPECTIVE PAY ROLLS DIRECTLY CONNECTED WITH THE PROJECT, THE AGGREGATE AMOUNT OF SUCH PAY ROLLS AND MAN-HOURS WORKED, ETC.

(3) A PROVISION TO THE EFFECT THAT IF ECONOMIC CONDITIONS CHANGE MINIMUM- WAGE RATES MAY BE ESTABLISHED FROM TIME TO TIME DIFFERENT FROM THOSE SPECIFIED IN THE CONTRACT, AND THAT THE CONTRACT PRICE SHALL THEREUPON BE ADJUSTED UPWARD OR DOWNWARD ACCORDINGLY.

(4) A PROVISION REQUIRING THE CONTRACTOR TO FURNISH PUBLIC LIABILITY INSURANCE AGAINST INJURIES TO MEMBERS OF THE PUBLIC FROM ACCIDENTS WHICH MAY ARISE FROM OPERATIONS PERFORMED UNDER THE CONTRACT, AND FIRE AND TORNADO INSURANCE UPON ALL WORK IN PLACE AND ALL MATERIALS STORED AT THE BUILDING SITE.

(5) YOUR DECISION A-83163 OF FEBRUARY 9, 1937, SUPRA, APPEARS TO HOLD THAT A PROVISION WHICH THE VETERANS ADMINISTRATION DESIRED TO INSERT IN CONSTRUCTION CONTRACTS WITH REFERENCE TO REQUIRING CONTRACTORS TO "TAKE ALL PRECAUTIONS NECESSARY FOR THE PROTECTION AGAINST INJURY OF ALL PERSONS ENGAGED AT THE SITE IN THE PERFORMANCE OF THE CONTRACT," WAS OBJECTIONABLE FOR THE REASON THAT YOUR OFFICE BELIEVED THAT "THE END AND OBJECT SOUGHT TO BE ACCOMPLISHED MAY BE MUCH MORE SATISFACTORILY ACCOMPLISHED" BY THE USE OF ARTICLE 21 OF PWA FORM 51, QUOTED ABOVE, PERTAINING TO WORKMEN'S COMPENSATION INSURANCE. YOUR OPINION IS REQUESTED, THEREFORE, AS TO WHETHER THE FOLLOWING PROVISION MAY LEGALLY BE INSERTED IN THE GENERAL CONDITIONS TO CONSTRUCTION CONTRACTS HEREAFTER ENTERED INTO BY THE FARM SECURITY ADMINISTRATION:

"ACCIDENT PREVENTION:

"A. THE CONTRACTOR SHALL AT ALL TIMES EXERCISE REASONABLE PRECAUTIONS FOR THE SAFETY OF EMPLOYEES ON THE WORK AND SHALL COMPLY WITH ALL APPLICABLE PROVISIONS OF FEDERAL, STATE, AND MUNICIPAL SAFETY LAWS AND BUILDING AND CONSTRUCTION CODES. ALL MACHINERY AND EQUIPMENT AND OTHER PHYSICAL HAZARDS SHALL BE GUARDED IN ACCORDANCE WITH MANUAL OF ACCIDENT PREVENTION IN CONSTRUCTION OF THE ASSOCIATED GENERAL CONTRACTORS OF AMERICA UNLESS SUCH INSTRUCTIONS ARE INCOMPATIBLE WITH FEDERAL, STATE, OR MUNICIPAL LAWS OR REGULATIONS. NOTHING IN THIS ARTICLE SHALL BE CONSTRUED TO PERMIT THE ENFORCEMENT OF ANY LAWS, CODES, OR REGULATIONS HEREIN SPECIFIED BY ANY EXCEPT THE CONTRACTING OFFICER.'

AS INDICATED, IT IS MY DESIRE TO SET FORTH THE ABOVE REQUIREMENTS AS REGULATIONS PRESCRIBED PURSUANT TO SECTION 7 OF THE EMERGENCY RELIEF APPROPRIATION ACT OF 1938. YOUR OPINION IS REQUESTED AS TO WHETHER YOUR OFFICE WILL OBJECT, AS A MATTER OF LAW, TO SUCH PROCEDURE. IN VIEW OF THE FACT THAT THE FARM SECURITY ADMINISTRATION CONTEMPLATES ENTERING INTO CONSTRUCTION CONTRACTS IN THE NEAR FUTURE, AN EARLY REPLY WILL BE APPRECIATED.

ARTICLE I, SECTION 9, CLAUSE 7, OF THE CONSTITUTION ORDAINS THAT "NO MONEY SHALL BE DRAWN FROM THE TREASURY, BUT IN CONSEQUENCE OF APPROPRIATIONS MADE BY LAW," AND SECTION 3678, REVISED STATUTES, TAKEN FROM THE ACT OF MARCH 3, 1809, 2 STAT. 535, PROVIDES THAT---

ALL SUMS APPROPRIATED FOR THE VARIOUS BRANCHES OF EXPENDITURE IN THE PUBLIC SERVICE SHALL BE APPLIED SOLELY TO THE OBJECTS FOR WHICH THEY ARE RESPECTIVELY MADE, AND FOR NO OTHERS.

IN THE SETTLEMENT AND ADJUSTMENT OF ALL ACCOUNTS AND CLAIMS IN WHICH THE UNITED STATES IS CONCERNED, AND IN CERTIFYING THE BALANCES THEREON WHICH THE LAW MAKES FINAL AND CONCLUSIVE UPON THE EXECUTIVE BRANCH OF THE GOVERNMENT, THIS OFFICE NECESSARILY HAS THE DUTY OF DECIDING UNDER THESE CITED PROVISIONS WHETHER AN APPROPRIATION IS AVAILABLE FOR MAKING PAYMENT ON THE BASIS OF THE RECORD PRESENTED. SECTIONS 304 AND 305, BUDGET AND ACCOUNTING ACT, 42 STAT. 24. GENERALLY, THE CONGRESS IN MAKING APPROPRIATIONS LEAVES LARGELY TO ADMINISTRATIVE DISCRETION THE CHOICE OF WAYS AND MEANS TO ACCOMPLISH THE OBJECTS OF THE APPROPRIATION, BUT, OF COURSE, ADMINISTRATIVE DISCRETION MAY NOT TRANSCEND THE STATUTES, NOR BE EXERCISED IN CONFLICT WITH LAW, NOR FOR THE ACCOMPLISHMENT OF PURPOSES UNAUTHORIZED BY THE APPROPRIATION; AND, JUST AS CLEARLY, SUCH UNAUTHORIZED OBJECTIVES MAY LEGALLY NO MORE BE REACHED INDIRECTLY BY STIPULATIONS IN CONTRACTS CHARGEABLE TO THE APPROPRIATION THAN BY DIRECT EXPENDITURE. MAY BE REMARKED HERE THAT THE QUESTION WITH THE ACCOUNTING OFFICERS IS NOT THE APPARENT GENERAL MERIT OF A PROPOSED EXPENDITURE, BUT WHETHER THE CONGRESS, CONTROLLING THE PURSE, HAS BY LAW AUTHORIZED THE EXPENDITURE--- AND THIS OFFICE HAS BEEN AS QUICK TO QUESTION THE ADMINISTRATIVE OMISSION FROM CONTRACTS OF PROVISIONS REQUIRED BY LAW TO BE INCLUDED THEREIN FOR THE BENEFIT AND PROTECTION OF EMPLOYEES AND THE PUBLIC, AS IT HAS TO QUESTION THE INCLUSION OF PROVISIONS NOT AUTHORIZED BY LAW AND OUTSIDE OF APPROPRIATIONS; ALL ON THE FUNDAMENTAL BASIS THAT IT IS FOR THE CONGRESS TO SAY HOW AND ON WHAT CONDITIONS PUBLIC MONEYS SHALL BE SPENT. DECISION OF JANUARY 10, 1931, 10 COMP. GEN. 294 (PRIOR TO THE ENACTMENT OF THE BACON-DAVIS ACT PROVIDING FOR CONTRACT WAGE STIPULATIONS) THE FORMER COMPTROLLER GENERAL CONSIDERED AN ADMINISTRATIVE PROPOSAL TO INCLUDE IN GOVERNMENT CONTRACTS CERTAIN STIPULATIONS REQUIRING THAT VETERANS AND THEN AMERICAN CITIZENS BE GIVEN EMPLOYMENT PREFERENCE, AND THAT PREVAILING WAGES BE PAID BY THE CONTRACTOR. IT WAS HELD THAT CONGRESS HAVING LEGISLATED WITH RESPECT TO EMPLOYMENT PREFERENCE, AND THAT PREVAILING WAGES BE PAID BY THE CONTRACTOR. IT WAS HELD THAT CONGRESS HAVING LEGISLATED WITH RESPECT TO EMPLOYMENT PREFERENCE,"IT IS NOT OPEN TO ADMINISTRATIVE CONSIDERATION TO EXACT THAT PREFERENCE WHERE THE CONGRESS HAS NOT SEEN FIT TO DO SO" AND THAT ONLY IN A CLEAR CASE OF NECESSITY IN THE PUBLIC INTEREST COULD THE ACCOUNTING OFFICERS WITHHOLD OBJECTION TO THE USES OF PUBLIC MONEYS THAT WOULD BE INVOLVED BY A CONTRACTUAL REQUIREMENT FOR SUCH EMPLOYMENT PREFERENCE. RESPECTING THE PROPOSAL CONTRACTUALLY TO REQUIRE THE PAYMENT OF PREVAILING WAGES IT WAS SAID:

NO MATTER HOW WORTHY MAY BE THE OBJECT OR END SOUGHT TO BE ATTAINED THROUGH ACTION BY THE EXECUTIVE BRANCH, WHERE THE USE OF PUBLIC MONEY WOULD BE INVOLVED IN ITS ACCOMPLISHMENT, IT BECOMES NECESSARY, IF OUR SYSTEM OF GOVERNMENT IS TO BE FAITHFULLY OBSERVED, FOR THE ACCOUNTING OFFICERS TO QUESTION THE PROPOSED USE UNLESS BY THEM FOUND TO BE REASONABLY WITHIN THE LAW OF THE APPROPRIATION PROPOSED TO BE EMPLOYED. THEN, IF AGREEMENT TO THE PROPOSED USE MUST BE BY THE ACCOUNTING OFFICERS WITHHELD, THE MATTER MAY GO TO THE CONGRESS--- THE SOURCE OF ALL AUTHORITY FOR THE USES OF PUBLIC MONEYS.

HOWEVER DESIRABLE THE CONTRARY MAY BE, IT SEEMS CLEAR THAT IN THE PRESENT STATE OF LAW THE PROPOSAL TO FIX BY CONTRACT THE MINIMUM RATE OF WAGES THE CONTRACTOR MUST PAY HIS EMPLOYEES IN THE DOING OF THE CONTRACT WORK, ASSUMING A CONTRACT OTHERWISE VALID AND ENFORCEABLE COULD BE DRAWN, CLASHES WITH THE LONG-RECOGNIZED INTENT AND PURPOSE OF SECTION 3709, REVISED STATUTES, IN THAT IT REMOVES FROM COMPETITIVE BIDDING ON THE PROJECT AN IMPORTANT ELEMENT OF COST AND TENDS TO DEFEAT THE PURPOSE OF THE STATUTE; THAT IS, TO OBTAIN A NEED OF THE UNITED STATES, AUTHORIZED BY LAW TO BE ACQUIRED, AT A COST NO GREATER THAN THE AMOUNT OF THE BID OF THE LOW RESPONSIBLE BIDDER, AFTER FULL AND FREE COMPETITIVE BIDDING.

BUT WERE IT POSSIBLE TO SURMOUNT THIS OBSTACLE, COULD IT PROPERLY BE HELD THAT THE FIXING OF THE MINIMUM WAGES TO BE PAID EMPLOYEES AS PROPOSED, HAS SUCH INTIMATE RELATIONSHIP TO THE SINGLE MATTER OF ACCOMPLISHING THE THING AUTHORIZED BY THE APPROPRIATION TO BE DONE AS TO PROPERLY PERMIT ITS BEING HELD, IN OTHER THAN A MOST EXTRAORDINARY CASE, REASONABLY NECESSARY TO SUCH ACCOMPLISHMENT, SO AS TO MEET THE TEST LONG APPLIED IN DETERMINING THE AVAILABILITY OF AN APPROPRIATION GENERAL IN TERMS FOR PROPOSED OR ACCOMPLISHED USES? I FEAR NOT. THAT THE COST TO THE UNITED STATES, BECAUSE OF THE ADMONITION TO BIDDERS TO SO BID AS TO BE ABLE TO PAY THE WAGES AS SO FIXED--- WHETHER ACTUALLY SO PAID OR NOT--- WOULD BE INCREASED, SEEMS TOO CLEAR FOR QUESTION. SUCH ADDED COST, IN THE MATTERS INVOLVED IN THE SUBMISSION, WOULD SEEM TO HAVE NO RELATIONSHIP TO THE ACTUAL ACCOMPLISHMENT OF THE WORK AUTHORIZED BY THE APPROPRIATIONS TO BE DONE AND CONSEQUENTLY COULD NOT PROPERLY BE PAID FROM SUCH APPROPRIATIONS.

WHAT IS HERE INVOLVED APPEARS A MATTER WHICH, IN THE PRESENT STATE OF THE LAW, IS NOT FOR ADJUSTMENT THROUGH ADMINISTRATIVE ACTION IN CONTRACTING, AND USES OF APPROPRIATED MONEYS IN SUCH CONNECTION WITHOUT FURTHER EXPRESSION AND AUTHORITY THEREON FROM THE CONGRESS MAY NOT PROPERLY BE APPROVED BY THE ACCOUNTING OFFICERS.

IN DECISION OF SEPTEMBER 12, 1935, 15 COMP. GEN. 201, THE FORMER COMPTROLLER GENERAL HELD THAT THE ELIMINATION IN THE SUBMISSION OF A BID OF A PROVISION IN THE ADVERTISED SPECIFICATIONS REQUIRING COMPLIANCE ON THE PART OF THE CONTRACTOR WITH ANY MARKETING AGREEMENTS OR LICENSES IN EFFECT UNDER THE PROVISIONS OF THE AGRICULTURAL ADJUSTMENT ACT RESPECTING ANY OF THE COMMODITIES TO BE FURNISHED UNDER THE CONTRACT JUSTIFIED REJECTION OF THE BID. IT WAS SAID:

* * * THE REQUIREMENT IN THE INVITATION FOR BIDS FOR COMPLIANCE WITH SUCH MARKETING AND/OR LICENSE AGREEMENT IS NO MORE THAN A REQUIREMENT THAT THE BIDDER SHALL COMPLY WITH LAWS CONTROLLING INDUSTRIES AND THE INDIVIDUAL MEMBERS THEREOF. A REFUSAL ON THE PART OF THE BIDDER TO COMPLY WITH SUCH AGREEMENTS IS, THEREFORE, A REFUSAL TO UNDERTAKE COMPLIANCE WITH PREVAILING LAWS. * * *

* * * IT IS UNDERSTOOD OTHER BIDDERS HAVE SUBMITTED BIDS IN CONFORMITY WITH THE INVITATION THEREFOR. THE ACCEPTANCE OF THE BID OF KINGAN AND CO., DESPITE ITS REFUSAL TO COMPLY WITH THE EXISTING LAW, WOULD OPERATE TO THE DETRIMENT OF SUCH OTHER BIDDERS AND MIGHT DEPRIVE THE GOVERNMENT OF POSSIBLE ADVANTAGES TO BE DERIVED FROM COMPLIANCE WITH MARKETING AGREEMENTS BY A GOVERNMENT CONTRACTOR. THEREFORE, YOU ARE ADVISED THAT THE BID OF KINGAN AND CO. PROPERLY MAY BE REJECTED.

IN DECISION OF FEBRUARY 9, 1937, 16 COMP. GEN. 748, IT WAS HELD, IN EFFECT, THAT IN LIEU OF THE INCLUSION OF CERTAIN SAFETY REGULATIONS WITHOUT MEANS OF ENFORCEMENT, THERE WAS NO LEGAL OBJECTION TO THE INCLUSION IN PUBLIC CONSTRUCTION CONTRACTS OF A STIPULATION REQUIRING THE CONTRACTOR TO PROVIDE ADEQUATE WORKMEN'S COMPENSATION INSURANCE FOR EMPLOYEES WHO MIGHT COME WITHIN THE PROTECTION OF SUCH LAWS AND EMPLOYER'S GENERAL LIABILITY INSURANCE FOR EMPLOYEES NOT WITHIN WORKMEN'S COMPENSATION LAWS.

IN DECISION OF JULY 15, 1937, 17 COMP. GEN. 37, TO THE EXECUTIVE DIRECTOR, SOCIAL SECURITY BOARD, IT WAS HELD THAT THERE IS NO AUTHORITY FOR REJECTING BIDS BECAUSE OF THE BIDDERS REPORTED NONCOMPLIANCE WITH THE REQUIREMENTS OF THE NATIONAL LABOR RELATIONS ACT OF JULY 5, 1935,49 STAT. 449; NOR FOR THE INCLUSION IN ADVERTISED SPECIFICATIONS OR CONTRACTS OF A REQUIREMENT OF COMPLIANCE WITH THE SAID ACT WITH THE RIGHT RESERVED TO CANCEL CONTRACTS FOR NONCOMPLIANCE. IT WAS SAID---

WHILE AS STATED IN THE MEMORANDUM OF YOUR GENERAL COUNSEL, THE CONGRESS HAS, IN THE STATUTES THEREIN REFERRED TO, ENACTED CERTAIN REQUIREMENTS WITH RESPECT TO GOVERNMENT CONTRACTS, NO SUCH REQUIREMENTS ARE FOUND IN THE NATIONAL LABOR RELATIONS ACT. THE CONGRESS HAS PROVIDED THE MEANS OF ENFORCING COMPLIANCE WITH THE REQUIREMENTS OF SAID ACT, BUT THE WITHHOLDING OF GOVERNMENT CONTRACTS FROM A VIOLATOR OF SUCH REQUIREMENTS IS NOT ONE OF THE MEANS SO PROVIDED.

THERE IS NOTHING IN THE SOCIAL SECURITY ACT TO REQUIRE THAT PERSONS OR FIRMS BIDDING ON GOVERNMENT BUSINESS SHALL CERTIFY OR OTHERWISE AFFIRMATIVELY SIGNIFY THAT THEY ARE COMPLYING WITH AND WILL CONTINUE TO COMPLY WITH THE NATIONAL LABOR RELATIONS ACT. AND THE FACT THAT A BIDDER WHO SUBMITS A BID HAS PREVIOUSLY VIOLATED SAID ACT IS NOT FOR CONSIDERATION BY THE PURCHASING OR CONTRACTING OFFICER IN THE AWARDING OF THE CONTRACT. THE SOLE JURISDICTION IS THE MATTER OF ENFORCING COMPLIANCE WITH THE NATIONAL LABOR RELATIONS ACT IS PLACED BY THE ACT IN THE NATIONAL LABOR RELATIONS BOARD AND COURTS.

IN DECISION OF DECEMBER 4, 1937, 17 COMP. GEN. 471, IT WAS HELD THAT A PROPOSED CONTRACT STIPULATION FOR PERIODIC ADJUSTMENT BY THE SECRETARY OF LABOR OF THE MINIMUM RATE OF WAGES STATED IN THE CONTRACT WAS UNAUTHORIZED IN VIEW OF THE PLAIN PROVISIONS OF THE ACT OF AUGUST 30, 1935, 49 STAT. 1011, REQUIRING THAT THERE BE INCLUDED IN GOVERNMENT CONSTRUCTION CONTRACTS OVER $2,000 A STIPULATION THAT THE CONTRACTOR PAY "WAGE RATES NOT LESS THAN THOSE STATED IN THE SPECIFICATIONS.' IT WAS SAID---

* * * I ASSUME IT WOULD NOT SERIOUSLY BE CONTENDED THAT IT WOULD BE LEGAL TO PROVIDE IN THE CONTRACT FOR A DOWNWARD READJUSTMENT OF THE MINIMUM WAGE SCALE WHICH WOULD PERMIT THE CONTRACTOR TO PAY AT WAGE RATES LESS THAN THOSE STATED IN THE ADVERTISED SPECIFICATIONS. AND IT WOULD APPEAR INCONSISTENT AND UNFAIR TO THE GOVERNMENT TO INSERT IN THE CONTRACT A PROVISION--- NOT REQUIRED BY THE STATUTE--- UNDER WHICH THE GOVERNMENT WOULD HAVE TO BEAR THE BURDEN OF ANY INCREASE IN THE PREVAILING RATE OF WAGES BUT COULD RECEIVE NO BENEFIT FROM ANY DECREASE THEREIN.

IN DECISION OF JANUARY 21, 1938, 17 COMP. GEN. 585, AS AMPLIFIED BY DECISION OF MARCH 7, 1938, 17 COMP. GEN. 700, IT WAS HELD THAT WHILE CONTRACTORS MIGHT BE REQUESTED THEY COULD NOT BE REQUIRED BY CONTRACT TO SUBMIT PAY ROLL AND OTHER STATISTICAL DATA TO THE DEPARTMENT OF LABOR FOR PURPOSES OUTSIDE THE CONTRACT APPROPRIATION. IT WAS SAID, 17 COMP. GEN. 708:

WHILE THE PROVISION SOUGHT TO BE INCORPORATED IN THIS INSTANCE HAS FOR ITS PURPOSE THE SECURING OF STATISTICAL DATA, SOME OF WHICH MAY BE REQUIRED BY LAW TO BE COMPLIED BY AN AGENCY OF THE GOVERNMENT--- WITH THE COOPERATION OF OTHER AGENCIES OF THE GOVERNMENT--- THE METHOD HERE SOUGHT TO BE EMPLOYED IN SECURING SUCH DATA HAS NOT BEEN PRESCRIBED BY LAW; AND SINCE THE EMPLOYMENT OF SUCH MEANS MIGHT--- AND IN AT LEAST ONE INSTANCE DID--- TEND TO RESTRICT COMPETITION IN CONFLICT WITH THE PURPOSE OF SECTION 3709, REVISED STATUTES, AND TO IMPOSE AN INCREASED BURDEN--- IN CONTRAVENTION OF SECTION 2678, REVISED STATUTES (SUPRA/--- ON THE APPROPRIATIONS UNDER AUTHORITY OF WHICH THE CONSTRUCTION CONTRACTS ARE MADE, THE EMPLOYMENT OF SUCH MEANS IS NOT AUTHORIZED.

THE PRINCIPLES RUNNING THROUGH THESE DECISIONS ARE EVIDENT. CONTRACT STIPULATIONS TENDING TO RESTRICT COMPETITION AND TO INCREASE THE COST OF PERFORMANCE--- AND THEREBY THE CHARGES AGAINST THE CONTRACT APPROPRIATIONS --- ARE UNAUTHORIZED UNLESS REASONABLY REQUISITE TO THE ACCOMPLISHMENT OF THE LEGISLATIVE PURPOSES OF THE CONTRACT APPROPRIATION, OR UNLESS SUCH STIPULATIONS ARE EXPRESSLY AUTHORIZED BY STATUTE, AND WHERE THE CONGRESS HAS LEGISLATED ON THE SUBJECT IT IS NOT OPEN TO ADMINISTRATIVE DISCRETION TO STIPULATE CONTRACT CONDITIONS BEYOND OR AT VARIANCE WITH THOSE DIRECTED BY STATUTE.

APPLYING THESE PRINCIPLES TO THE FIVE STIPULATIONS PROPOSED TO BE DIRECTED BY REGULATION TO BE INCLUDED IN FARM SECURITY ADMINISTRATION CONSTRUCTION CONTRACTS UNDER THE EMERGENCY RELIEF APPROPRIATION ACT OF 1938, 52 STAT. 809, YOU ARE INFORMED AS FOLLOWS:

1. BY EXPRESS LEGISLATION THE CONGRESS HAS IN THE EIGHT HOUR ACT OF JUNE 19, 1912, 37 STAT. 137, AND THE BACON-DAVIS ACT AS AMENDED BY THE ACT OF AUGUST 30, 1935, 49 STAT. 1011, DIRECTED THE INCLUSION IN CERTAIN CONSTRUCTION CONTRACTS UNDER CERTAIN CONDITIONS OF STIPULATIONS FIXING MAXIMUM HOURS AND MINIMUM WAGES FOR LABORERS AND MECHANICS AND TO INSURE THE PROMPT PAYMENT OF WAGES WITHOUT DEDUCTION OR REBATE. ALSO, BY THE WALSH-HEALEY ACT OF JUNE 30, 1936, 49 STAT. 2036, GOVERNMENT SUPPLY CONTRACTS OVER $10,000 ARE REQUIRED TO STIPULATE CERTAIN HOUR, WAGE, AND LABOR STANDARDS TO BE OBSERVED BY THE CONTRACTOR. BUT APPARENTLY THE CONGRESS HAS NOT AS YET SEEN FIT TO DIRECT THAT GOVERNMENT CONTRACTS SHALL CONTAIN STIPULATIONS RESPECTING EMPLOYEE ORGANIZATION AND COLLECTIVE BARGAINING, EXCEPT WITH RESPECT TO CERTAIN COAL CONTRACTS (SECTION 9, ACT OF APRIL 26, 1937, 50 STAT. 87); THAT BEING LEFT SO FAR TO THE GENERAL ENFORCEMENT PROVISIONS OF THE NATIONAL LABOR RELATIONS ACT OF JULY 5, 1935, 49 STAT. 449. RESPECTING THE ARGUMENT THAT SUCH STIPULATIONS MERELY REQUIRE CONTRACTORS TO COMPLY WITH THE LAW OF THE LAND, CITING IN THAT CONNECTION THE DECISION OF SEPTEMBER 12, 1935, 15 COMP. GEN. 201, SUPRA, HOLDING THAT CONTRACTORS MIGHT BE REQUIRED TO SHOW COMPLIANCE WITH MARKETING AGREEMENTS OR LICENSES IN EFFECT AS TO THE CONTRACT COMMODITIES, IT MAY BE STATED THAT THE STIPULATION IN THAT CASE CONCERNED THE LEGAL QUALIFICATION OF THE CONTRACTOR TO DEAL IN THE COMMODITIES, AND THE DECISION STATED THAT THE ACCEPTANCE OF THE BID OF ONE REFUSING COMPLIANCE MIGHT DEPRIVE THE GOVERNMENT OF POSSIBLE ADVANTAGES TO BE DERIVED FROM COMPLIANCE BY A GOVERNMENT CONTRACTOR. MOREOVER, SO FAR AS THAT PHASE IS CONCERNED IN THE PRESENT MATTER, I DO NOT FIND THAT IT HAS BEEN JUDICIALLY DECIDED THAT LOCAL CONSTRUCTION CONTRACTORS COME WITHIN THE PROVISIONS OF THE NATIONAL LABOR RELATIONS ACT. IN CONSOLIDATED EDISON COMPANY V. NATIONAL LABOR RELATIONS BOARD, 95 F/2D) 390, 393, DECIDED MARCH 14, 1938, THE COURT SAID, BY WAY OF DICTA, AFTER REFERRING TO THE SUPREME COURT CASES---

CONSISTENTLY WITH THESE PRINCIPLES IT CAN SCARCELY BE DOUBTED THAT THE LABOR DISPUTES OF A LOCAL MERCHANT WILL NOT NORMALLY FALL WITHIN THE BOARD'S JURISDICTION, EVEN THOUGH SOME PART OF HIS STOCK IN TRADE ORIGINATES OUTSIDE THE STATE OR SOME OF HIS LOCAL CUSTOMERS ARE ENGAGED IN INTERSTATE COMMERCE. IN SUCH A CASE THE CLOSING OF THE MERCHANT'S STORE BY A STRIKE OF HIS EMPLOYEES WOULD UNDOUBTEDLY AFFECT INTERSTATE COMMERCE, BUT THE EFFECTS WOULD BE TOO REMOTE AND INDIRECT TO BRING HIS ACTIVITIES WITHIN THE RANGE OF FEDERAL REGULATION. * * *

WHAT WAS SAID THERE WOULD APPEAR EQUALLY PERTINENT AS TO LOCAL CONSTRUCTION CONTRACTORS, BUT HOWEVER THAT MAY BE, I FIND NO LEGISLATIVE INTENT TO FURTHER THE PROVISIONS OF THE NATIONAL LABOR RELATIONS ACT BY STIPULATIONS IN GOVERNMENT CONTRACTS (17 COMP. GEN. 37). SUCH STIPULATIONS MAY RESTRICT COMPETITION AND INCREASE CONTRACT PRICES AS A CHARGE AGAINST THE APPROPRIATION, CONTRARY TO SECTIONS 3709 AND 3678, REVISED STATUTES, NO PART OF THE APPROPRIATION INVOLVED FOR THE ACTIVITIES OF THE FARM SECURITY ADMINISTRATION HAVING BEEN MADE FOR THAT PURPOSE. MUST BE HELD, ACCORDINGLY, THAT THE INCLUSION IN FARM SECURITY ADMINISTRATION CONSTRUCTION CONTRACTS OF THE PROPOSED STIPULATIONS RESPECTING EMPLOYEE ORGANIZATION AND COLLECTIVE BARGAINING ARE NOT NOW AUTHORIZED BY LAW. 2. THE SAID APPROPRIATION IN QUESTION FOR THE ACTIVITIES OF THE FARM SECURITY ADMINISTRATION CONTAINED IN THE EMERGENCY RELIEF APPROPRIATION ACT OF JUNE 21, 1938, 52 STAT. 809, 810, IS MADE DIRECTLY TO THE SECRETARY OF AGRICULTURE AND IS EXPRESSLY MADE AVAILABLE FOR "ADMINISTRATION, LOANS, RELIEF, AND RURAL REHABILITATION FOR NEEDY PERSONS.' THE PROVISION IN SECTION 7 OF THE ACT THAT "IN CARRYING OUT THE PURPOSES OF THIS TITLE, THE HEADS OF THE DEPARTMENTS, ESTABLISHMENTS, AND AGENCIES TO WHICH FUNDS ARE APPROPRIATED HEREIN ARE AUTHORIZED TO PRESCRIBE SUCH RULES AND REGULATIONS AS MAY BE NECESSARY" DOES NOT CONFER ON SUCH ADMINISTRATIVE HEADS ANY DISCRETION TO DIRECT EXPENDITURES FOR PURPOSES OUTSIDE THOSE FOR WHICH THE FUNDS WERE APPROPRIATED DIRECTLY TO THEIR PARTICULAR AGENCIES; NOR DOES IT CONFER ON THEM THE BROAD POWERS AND WIDE DISCRETION VESTED IN THE PRESIDENT BY THE PRIOR GENERAL EMERGENCY RELIEF APPROPRIATION ACTS MAKING LUMP SUM APPROPRIATIONS "TO BE USED IN THE DISCRETION AND UNDER THE DIRECTION OF THE PRESIDENT.' SEE, FOR EXAMPLE, SECTION 1 OF THE ACT OF APRIL 8, 1935, 49 STAT. 115, AND SECTION 1 OF THE ACT OF JUNE 29, 1937, 50 STAT. 352. OBTAINING PAY ROLL AND LABOR STATISTICS FOR THE DEPARTMENT OF LABOR IS CLEARLY OUTSIDE THE PURPOSES OF THE APPROPRIATION FOR THE ACTIVITIES OF THE FARM SECURITY ADMINISTRATION, AND THAT BEING SO, SUCH EXPENDITURES MAY NOT BE AUTHORIZED BY REGULATION, NOTWITHSTANDING THAT THE PRESIDENT UNCER PRIOR APPROPRIATIONS HAD AUTHORITY TO DIRECT SUCH EXPENDITURES AS A PART OF GENERAL RELIEF MEASURES INVOLVING ALL GOVERNMENTAL AGENCIES. THE INCLUSION IN CONTRACTS OF STIPULATIONS REQUIRING CONTRACTORS REGULARLY TO COLLATE AND REPORT PAY ROLL AND OTHER STATISTICAL DATA MIGHT RESTRICT COMPETITION AND INCREASE CHARGES AGAINST THE CONTRACT APPROPRIATION, 17 COMP. GEN. 585; ID. 700, AND NOT BEING REQUIRED BY STATUTE OR REASONABLY RELATED TO THE ACCOMPLISHMENT OF THE PURPOSES OF THE APPROPRIATION HERE INVOLVED, SUCH STIPULATIONS IN CONTRACTS PAYABLE UNDER THE SAID APPROPRIATION MUST BE HELD UNAUTHORIZED.

3. THE BACON-DAVIS ACT AS AMENDED BY THE ACT OF AUGUST 30, 1935, 49 STAT. 1011, EXPRESSLY REQUIRES EVERY CONTRACT IN EXCESS OF $2,000 TO WHICH THE UNITED STATES IS A PARTY FOR THE CONSTRUCTION, ALTERATION, OR REPAIR OF PUBLIC BUILDINGS OR PUBLIC WORKS TO CONTAIN A STIPULATION THAT THE CONTRACTOR OR HIS SUBCONTRACTOR SHALL PAY ALL MECHANICS AND LABORERS EMPLOYED DIRECTLY UPON THE SITE OF THE WORK AT WAGE RATES NOT LESS THAN THOSE STATED IN THE ADVERTISED SPECIFICATIONS, BASED UPON THE WAGES DETERMINED BY THE SECRETARY OF LABOR TO BE PREVAILING FOR THE CORRESPONDING CLASSES OF LABORERS AND MECHANICS EMPLOYED ON PROJECTS OF A CHARACTER SIMILAR TO THE CONTRACT WORK IN THE CITY, TOWN, VILLAGE, OR OTHER CIVIL SUBDIVISION OF THE STATE IN WHICH THE WORK IS TO BE PERFORMED. THESE STATUTORY PROVISIONS ARE APPLICABLE TO CONSTRUCTION CONTRACTS IN EXCESS OF $2,000 OF THE FARM SECURITY ADMINISTRATION UNDER THE APPROPRIATION IN QUESTION, AND IN SUCH CONTRACTS THERE IS NO AUTHORITY FOR OMITTING THE STATUTORY STIPULATIONS OR SUBSTITUTING PROVISIONS AT VARIANCE THEREWITH. 17 COMP. GEN. 471. SECTION 9 OF THE SAID EMERGENCY RELIEF APPROPRIATION ACT, 52 STAT. 812, PROVIDES---

THE RATES OF PAY FOR PERSONS ENGAGED UPON PROJECTS UNDER THE APPROPRIATIONS IN THIS TITLE SHALL BE NOT LESS THAN THE PREVAILING RATES OF PAY FOR WORK OF A SIMILAR NATURE IN THE SAME LOCALITY AS DETERMINED BY THE WORKS PROGRESS ADMINISTRATION: * * *

THIS PROVISION IS FOR "PERSONS ENGAGED ON PROJECTS" UNDER THE APPROPRIATIONS AND WHILE APPARENTLY IT WAS PRIMARILY INTENDED FOR THOSE DIRECTLY EMPLOYED BY THE GOVERNMENT ON RELIEF WORK THE LANGUAGE IS BROAD ENOUGH TO INCLUDE THOSE ENGAGED UNDER CONTRACTS. SUCH PROVISION DOES NOT APPEAR TO HAVE BEEN INTENDED, HOWEVER, TO REPEAL OR SUPERSEDE THE EXPRESS PROVISIONS OF THE GENERAL LEGISLATION CONTAINED IN THE SAID BACON-DAVIS ACT AS AMENDED WITH RESPECT TO CONTRACTS OVER $2,000, AND AS TO SMALLER CONTRACTS--- RELATIVELY UNIMPORTANT SO FAR AS THE EMPLOYMENT OF LABORERS OR MECHANICS FOR ANY DURATION IS CONCERNED--- IT IS TO BE NOTED THAT SECTION 9 OF THE APPROPRIATION ACT, SUPRA, EXPRESSLY PROVIDES THAT THE RATES OF PAY FOR PERSONS ENGAGED UPON PROJECTS SHALL BE NOT LESS THAN PREVAILING RATES "AS DETERMINED BY THE WORKS PROGRESS ADMINISTRATION.' THE CONGRESS HAVING THUS SPECIFICALLY LEGISLATED CONCERNING THE MATTER, IT IS NOT OPEN TO ADMINISTRATIVE DISCRETION TO PROVIDE FOR POSSIBLE INCREASED PAYMENTS UNDER THE APPROPRIATION ON THE BASIS OF CHANGES BY YOUR DEPARTMENT FROM TIME TO TIME DURING PERFORMANCE, OF THE MINIMUM WAGE RATES REQUIRED BY LAW TO BE SPECIFIED IN THE CONTRACTS. THE PROPOSED STIPULATIONS IN THIS RESPECT CANNOT BE HELD TO BE LEGALLY AUTHORIZED.

4. WHILE THE MATTER IS NOT WHOLLY FREE FROM DOUBT, THE VIEW WOULD APPEAR WARRANTED THAT THE PROPOSED STIPULATIONS REQUIRING CONTRACTORS TO FURNISH PUBLIC LIABILITY INSURANCE AGAINST INJURIES TO MEMBERS OF THE PUBLIC FROM ACCIDENTS WHICH MAY ARISE FROM OPERATIONS PERFORMED UNDER THE CONTRACT, AND FIRE AND TORNADO INSURANCE UPON ALL WORK IN PLACE AND ALL MATERIALS STORED AT THE BUILDING SITE, WOULD COME FAIRLY WITHIN ADMINISTRATIVE DISCRETION. THESE MATTERS ARE NOT COVERED BY LEGISLATION, BUT RELATE DIRECTLY TO THE CONDITIONS FOR PERFORMANCE OF THE WORK WHICH ARE GENERALLY LEFT TO ADMINISTRATIVE CONTROL. THEY ARE MEASURES SUCH AS RESPONSIBLE CONTRACTORS OBSERVE AND CHARGE TO OVERHEAD EXPENSES AS A MATTER OF COURSE. AN EXPRESS CONTRACTUAL STIPULATION REQUIRING THEIR OBSERVANCE DOES NO MORE THAN TO REQUIRE OTHER CONTRACTORS TO MEET USUAL STANDARDS OF RESPONSIBILITY. WHILE CONCEIVABLY SUCH STIPULATIONS MIGHT IN SOME INSTANCES INCREASE THE CONTRACT PRICE OVER WHAT OTHERWISE MIGHT BE BID BY AN IRRESPONSIBLE CONTRACTOR, ANY SUCH INCREASE MAY BE VIEWED AS REASONABLY NECESSARY TO THE PERFORMANCE IN A RESPONSIBLE MANNER OF CONTRACT WORK TO ACCOMPLISH THE PURPOSES OF THE APPROPRIATION. THIS FOLLOWS THE PRINCIPLE OF DECISION OF FEBRUARY 9, 1937, 16 COMP. GEN. 748, RELATING TO EMPLOYEE'S COMPENSATION INSURANCE AND EMPLOYER'S GENERAL LIABILITY INSURANCE, AND YOU ARE INFORMED ACCORDINGLY THAT THIS OFFICE WOULD NOT BE REQUIRED TO OBJECT TO THE INCLUSION OF THE PROPOSED STIPULATIONS IN THIS RESPECT IF ADMINISTRATIVELY DETERMINED TO BE REASONABLY NECESSARY TO THE OBJECTS OF THE APPROPRIATION.

5. THE PROPOSED STIPULATION REQUIRING CONTRACTORS AT ALL TIMES TO EXERCISE REASONABLE PRECAUTIONS FOR THE SAFETY OF EMPLOYEES AND TO COMPLY WITH ALL APPLICABLE PROVISIONS OF FEDERAL, STATE, AND MUNICIPAL SAFETY LAWS, AND BUILDING AND CONSTRUCTION CODES, FALLS WITHIN THE PRINCIPLES JUST STATED WITH RESPECT TO THE RESPONSIBLE CONDUCT OF THE CONTRACT WORK AND DOES NOT APPEAR LEGALLY OBJECTIONABLE IF ADMINISTRATIVELY DETERMINED TO BE REASONABLY REQUISITE TO THE PURPOSES OF THE APPROPRIATION. IN THIS CONNECTION YOUR ATTENTION MAY BE INVITED TO CIRCULAR LETTER NO. 234, PROCUREMENT DIVISION, PUBLIC BUILDINGS BRANCH, DATED MAY 13, 1937, ANNOUNCING THE ADOPTION OF DETAILED SPECIFICATIONS TO PROMOTE THE PERSONAL SAFETY OF WORKMEN AND THE PUBLIC IN CONNECTION WITH THE PROSECUTION OF CONSTRUCTION PROJECTS AND STATING THAT ANY FEDERAL AGENCY INTERESTED IN THE ADOPTION OF SIMILAR REQUIREMENTS MAY OBTAIN A COPY OF SUCH SAFETY SPECIFICATIONS UPON REQUEST. IT IS ASSUMED THAT PROVISION WILL BE MADE IN THE CONTRACT CONDITIONS FOR THE ENFORCEMENT OF SUCH SAFETY STIPULATIONS AS MAY BE INCLUDED IN THE CONTRACTS.

IN VIEW OF THE EXPLANATIONS MADE AS TO THE BASIS FOR THE INCLUSION OF THE QUESTIONED PROVISIONS IN CONTRACTS HERETOFORE MADE BY THE FARM SECURITY ADMINISTRATION THIS OFFICE WILL NOT OBJECT TO PAYMENTS THEREUNDER OTHERWISE PROPER, BUT THE ADMINISTRATIVE CONTRACTING PROCEDURE SHOULD BE CORRECTED TO ELIMINATE THE UNAUTHORIZED STIPULATIONS FROM FUTURE CONTRACTS.