A-51738, NOVEMBER 10, 1933, 13 COMP. GEN. 132

A-51738: Nov 10, 1933

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CONTRACTS - CODES OF FAIR COMPETITION - AWARDS IT BEING PRESUMED THAT ALL MEMBERS OF AN INDUSTRY OR TRADE FOR WHICH A CODE OF FAIR COMPETITION HAS BEEN APPROVED BY THE PRESIDENT WILL COMPLY WITH THE PROVISIONS THEREOF. CONTRACT PROVISIONS REQUIRING COMPLIANCE WITH APPLICABLE CODES ARE PROPER. 1933: I HAVE YOUR LETTER OF NOVEMBER 3. IN PERTINENT PART AS FOLLOWS: THE FOLLOWING INFORMATION IS FURNISHED IN RESPONSE TO YOUR LETTER A 51738 OF OCTOBER 30. SEVERAL BIDS WERE RECEIVED. INASMUCH AS THESE CARS ARE TO BE PURCHASED FROM AN ALLOTMENT FROM THE PUBLIC WORKS ADMINISTRATION. IT IS NECESSARY FOR THE DEPARTMENT TO COMPLY WITH THE INSTRUCTIONS ISSUED BY THAT ORGANIZATION. EXCEPT WHEN THE CONTRACTING OFFICER CERTIFIES THAT THIS REQUIREMENT IS NOT IN THE PUBLIC INTEREST.

A-51738, NOVEMBER 10, 1933, 13 COMP. GEN. 132

CONTRACTS - CODES OF FAIR COMPETITION - AWARDS IT BEING PRESUMED THAT ALL MEMBERS OF AN INDUSTRY OR TRADE FOR WHICH A CODE OF FAIR COMPETITION HAS BEEN APPROVED BY THE PRESIDENT WILL COMPLY WITH THE PROVISIONS THEREOF, THE MERE FACT THAT ANY SUCH MEMBER HAS NOT PLEDGED COMPLIANCE WOULD NOT PRECLUDE THE AWARDING OF A CONTRACT TO SUCH MEMBER, IF THE LOWEST BIDDER AND OTHERWISE ACCEPTABLE, BUT CONTRACT PROVISIONS REQUIRING COMPLIANCE WITH APPLICABLE CODES ARE PROPER.

COMPTROLLER GENERAL MCCARL TO THE SECRETARY OF COMMERCE, NOVEMBER 10, 1933:

I HAVE YOUR LETTER OF NOVEMBER 3, 1933, IN PERTINENT PART AS FOLLOWS:

THE FOLLOWING INFORMATION IS FURNISHED IN RESPONSE TO YOUR LETTER A 51738 OF OCTOBER 30, CONCERNING THE PROPOSAL OF THE NORTHWEST MOTOR COMPANY, IN CONNECTION WITH MOTOR EQUIPMENT FOR THIS DEPARTMENT:

THE AIRWAYS DIVISION OF THIS DEPARTMENT ADVERTISED FOR BIDS (PROPOSAL NO. 25641) FOR FURNISHING FOUR PASSENGER CARS AND SIX TRUCKS, IN ACCORDANCE WITH CERTAIN CONDITIONS AND SPECIFICATIONS. SEVERAL BIDS WERE RECEIVED, THE LOWEST BEING SUBMITTED BY THE NORTHWEST MOTOR COMPANY, OF BETHESDA, MARYLAND, WHICH PROPOSED TO FURNISH FORD CARS WITHIN 15 DAYS. THIS BID MEETS THE SPECIFICATIONS AND CONDITIONS IN ALL RESPECTS, EXCEPT THAT THE BIDDER DOES NOT GUARANTEE THAT THE MANUFACTURER OF THESE CARS HAS COMPLIED WITH THE ESTABLISHED CODE OF FAIR COMPETITION. INASMUCH AS THESE CARS ARE TO BE PURCHASED FROM AN ALLOTMENT FROM THE PUBLIC WORKS ADMINISTRATION, IT IS NECESSARY FOR THE DEPARTMENT TO COMPLY WITH THE INSTRUCTIONS ISSUED BY THAT ORGANIZATION. THE SECOND PARAGRAPH OF THE SPECIAL CONTRACT PROVISIONS, DATED OCTOBER 10, 1933, CONTAINS THE FOLLOWING PROVISION TAKEN FROM DIRECTIONS ISSUED BY THE FEDERAL EMERGENCY ADMINISTRATOR OF PUBLIC WORKS, UNDER THE AUTHORITY DELEGATED TO HIM BY THE PRESIDENT BY EXECUTIVE ORDER OF AUGUST 19, 1933, NO. 6252, ISSUED PURSUANT TO SECTION 201 (A) OF THE NATIONAL INDUSTRIAL RECOVERY ACT:

"N.R.A. MATERIALS.--- ONLY ARTICLES, MATERIALS, AND SUPPLIES PRODUCED UNDER CODES OF FAIR COMPETITION APPROVED UNDER TITLE I OF THE NATIONAL INDUSTRIAL RECOVERY ACT, OR UNDER THE PRESIDENT'S REEMPLOYMENT AGREEMENT, SHALL BE USED IN THE PERFORMANCE OF THIS CONTRACT, EXCEPT WHEN THE CONTRACTING OFFICER CERTIFIES THAT THIS REQUIREMENT IS NOT IN THE PUBLIC INTEREST, OR THAT THE CONSEQUENT COST IS UNREASONABLE.'

THE AIRWAYS DIVISION OF THIS DEPARTMENT RECOMMENDS IN SUBSTANCE THAT IN VIEW OF THE FACT THAT THE NORTHWEST MOTOR COMPANY PROPOSES TO FURNISH CARS MANUFACTURED BY THE FORD MOTOR COMPANY, AND THE FORD MOTOR COMPANY HAS NOT COMPLIED WITH THE CODE OF FAIR COMPETITION ESTABLISHED FOR THE AUTOMOBILE INDUSTRY, ITS BID (THE NORTHWEST MOTOR COMPANY-S) BE REJECTED AND THE NEXT LOWEST BID BE ACCEPTED. UPON LEARNING OF THIS PROPOSED ACTION, THE NORTHWEST MOTOR COMPANY FILED A PROTEST WITH THIS DEPARTMENT AGAINST AWARDING THE CONTRACT TO ANY OTHER BIDDER. IN ITS LETTER OF OCTOBER 25, 1933, IT STATES THAT IT HAS IN EVERY RESPECT COMPLIED WITH THE REQUIREMENTS OF THE N.R.A., THAT ITS PRESIDENT IS A LOCAL OFFICER OF THE N.R.A. IN MONTGOMERY COUNTY, MARYLAND, AND THAT THE MANUFACTURER (THE FORD MOTOR COMPANY) OF THE CARS IT PROPOSES TO FURNISH IS NOT A PARTY TO THE CONTRACT.

ON OCTOBER 27, 1933, MR. MALCOLM KERLIN, ADMINISTRATIVE ASSISTANT TO THE SECRETARY OF COMMERCE, REQUESTED THE NORTHWEST MOTOR COMPANY TO FURNISH THIS DEPARTMENT WITH THE AGREEMENT OR CONTRACT IT HAS WITH THE FORD MOTOR COMPANY. THIS REQUEST WAS MADE IN ORDER THAT THIS DEPARTMENT MIGHT ASCERTAIN WHETHER THE NORTHWEST MOTOR COMPANY IS MERELY AN "AGENT" OF THE FORD MOTOR COMPANY OR WHETHER IT IS AN INDEPENDENT DEALER. IN RESPONSE THERETO, THE NORTHWEST MOTOR COMPANY SUBMITTED A LETTER DATED OCTOBER 28, 1933, STATING THAT IT IS A DEALER AND NOT AN AGENT OF THE FORD MOTOR COMPANY, AND QUOTED CERTAIN CLAUSES WHICH IT STATES ARE FROM THE SALES AGREEMENT BETWEEN THE FORD MOTOR COMPANY AND THE NORTHWEST MOTOR COMPANY.

WHETHER THE NORTHWEST MOTOR COMPANY IS AN AGENT OR DEALER IS A QUESTION OF LAW TO BE DETERMINED BY ALL THE FACTS AND NOT MERELY FROM THE CONCLUSION OF THE BIDDER AS SET FORTH IN ITS LETTER, OR SOLELY FROM THE FACT THAT IT IS REFERRED TO AS A DEALER. * * *

FOR REASONS STATED IN MY DECISION TO THE SECRETARY OF AGRICULTURE, 13 COMP. GEN. 127, IN A CASE SOMEWHAT SIMILAR TO THIS, THE QUESTION AS TO WHETHER THE NORTHWEST MOTOR COMPANY IS OR IS NOT AN AGENT OF THE FORD MOTOR COMPANY WOULD NOT APPEAR TO BE NECESSARILY CONTROLLING.

WITH REFERENCE TO THE STATEMENT IN THE AIRWAYS DIVISION'S REPORT TO THE EFFECT THAT THE FORD MOTOR CO. HAS NOT COMPLIED WITH THE CODE OF FAIR COMPETITION ESTABLISHED FOR THE AUTOMOBILE INDUSTRY, IT IS NOTED THAT YOU DO NOT STATE IN WHAT RESPECT SAID COMPANY HAS NOT COMPLIED WITH THE CODE APPROVED BY THE PRESIDENT FOR THE AUTOMOBILE MANUFACTURING INDUSTRY, AND IN THIS CONNECTION THE ADMINISTRATOR FOR INDUSTRIAL RECOVERY HAS REPORTED TO THIS OFFICE IN LETTER OF NOVEMBER 1, 1933, THAT HE HAS NOT BEEN ADVISED OF ANY PROVED VIOLATION OF SAID CODE.

THE REGULATIONS PRESCRIBED BY THE PRESIDENT IN EXECUTIVE ORDER NO. 6252 OF AUGUST 19, 1933, REFERRED TO IN YOUR LETTER, PROVIDE THAT:

2. NO CONTRACTOR OR SUBCONTRACTOR ON ANY SUCH PROJECT WHO IS SUBJECT TO A CODE ADOPTED PURSUANT TO TITLE I OF SAID ACT SHALL PERMIT ANY EMPLOYEE TO WORK IN EXCESS OF THE HOURS OF LABOR PRESCRIBED IN SAID CODE. * * *

AND WHILE I DO NOT FIND IN SAID EXECUTIVE ORDER ANY SPECIFIC DELEGATION OF AUTHORITY TO THE FEDERAL EMERGENCY ADMINISTRATOR OF PUBLIC WORKS TO PRESCRIBE THE FORM OF CONTRACTS TO BE MADE BY DEPARTMENTS OR ESTABLISHMENTS TO WHICH NATIONAL INDUSTRIAL RECOVERY FUNDS MAY HAVE BEEN ALLOTTED, IT WOULD SEEM PROPER TO INCORPORATE IN SUCH CONTRACTS ANY REASONABLE PROVISIONS THAT MAY BE NECESSARY TO FURTHER THE PURPOSES OF THE NATIONAL INDUSTRIAL RECOVERY ACT. IT IS TO BE PRESUMED, HOWEVER, THAT ALL MEMBERS OF AN INDUSTRY OR TRADE FOR WHICH A CODE OF FAIR COMPETITION HAS BEEN APPROVED BY THE PRESIDENT WILL COMPLY WITH THE PROVISIONS THEREOF, AND THE MERE FACT THAT ANY SUCH MEMBER HAS NOT PLEDGED COMPLIANCE SHOULD NOT PRECLUDE THE AWARDING OF A CONTRACT TO SUCH MEMBER, IF THE LOWEST BIDDER AND OTHERWISE ACCEPTABLE.