A-70217, FEBRUARY 24, 1936, 15 COMP. GEN. 717

A-70217: Feb 24, 1936

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THERE IS NO LEGAL AUTHORITY FOR QUALIFYING THE PROVISION REQUIRED IN EVERY GOVERNMENT CONTRACT FOR ANY PUBLIC WORK OR SERVICE THAT THE CONTRACTOR WILL BUY NO BITUMINOUS COAL TO USE ON OR IN CARRYING OUT SUCH CONTRACT FROM ANY PRODUCER EXCEPT SUCH PRODUCER BE A MEMBER OF THE COAL CODE AS SET OUT IN THE BITUMINOUS COAL CONSERVATION ACT OF 1935. OR EQUIPMENT IS NOT A CONTRACT FOR A "PUBLIC WORK OR ERVICE" WITHIN THE MEANING OF SECTION 14 (B) OF THE BITUMINOUS COAL CONSERVATION ACT OF 1935. CONTRACTS PROVIDING SPECIFICALLY FOR THE MANUFACTURE OF EQUIPMENT UNDER GOVERNMENT SPECIFICATIONS AND SUPERVISION ARE CONTRACTS FOR A "PUBLIC WORK OR SERVICE. " AND ANY CONSTRUCTIVE WORK OF A PUBLIC CHARACTER IS A "PUBLIC WORK" WITHIN THE MEANING OF SAID STATUTE.

A-70217, FEBRUARY 24, 1936, 15 COMP. GEN. 717

CONTRACTS - BITUMINOUS COAL CONSERVATION ACT OF 1935 - "PUBLIC WORK OR SERVICE" - PURCHASE LIMITATIONS SECTION 14 (B) OF THE BITUMINOUS COAL CONSERVATION ACT OF 1935, 49 STAT. 1006, DOES NOT PRECLUDE THE PURCHASE OF BITUMINOUS COAL BY A CONTRACTOR FOR ANY PUBLIC WORK OR SERVICE FROM A DEALER AS DISTINGUISHED FROM A PRODUCER, HIS AGENT, SUBSIDIARY, MARKETING AGENCY, ETC., AND IN DEALER PURCHASES IT NEED NOT BE REQUIRED THAT THE COAL BE PRODUCED BY A MEMBER OF THE CODE. THERE IS NO LEGAL AUTHORITY FOR QUALIFYING THE PROVISION REQUIRED IN EVERY GOVERNMENT CONTRACT FOR ANY PUBLIC WORK OR SERVICE THAT THE CONTRACTOR WILL BUY NO BITUMINOUS COAL TO USE ON OR IN CARRYING OUT SUCH CONTRACT FROM ANY PRODUCER EXCEPT SUCH PRODUCER BE A MEMBER OF THE COAL CODE AS SET OUT IN THE BITUMINOUS COAL CONSERVATION ACT OF 1935, 49 STAT. 994. THE PURCHASE OF SUPPLIES, MATERIAL, OR EQUIPMENT IS NOT A CONTRACT FOR A "PUBLIC WORK OR ERVICE" WITHIN THE MEANING OF SECTION 14 (B) OF THE BITUMINOUS COAL CONSERVATION ACT OF 1935, 49 STAT. 1006, BUT CONTRACTS PROVIDING SPECIFICALLY FOR THE MANUFACTURE OF EQUIPMENT UNDER GOVERNMENT SPECIFICATIONS AND SUPERVISION ARE CONTRACTS FOR A "PUBLIC WORK OR SERVICE," AND ANY CONSTRUCTIVE WORK OF A PUBLIC CHARACTER IS A "PUBLIC WORK" WITHIN THE MEANING OF SAID STATUTE.

COMPTROLLER GENERAL MCCARL TO THE SECRETARY OF COMMERCE, FEBRUARY 24, 1936:

THERE HAS BEEN RECEIVED YOUR LETTER OF JANUARY 18, 1936, AS FOLLOWS:

TRANSMITTED HEREWITH FOR YOUR INFORMATION ARE COPIES OF PRESS RELEASES ISSUED BY THE NATIONAL BITUMINOUS COAL COMMISSION DATED NOVEMBER 16, 1935, AND DECEMBER 18, 1935, RELATIVE TO THE APPLICATION OF THE BITUMINOUS COAL CONSERVATION ACT OF 1935 IN GOVERNMENT CONTRACTS.

SECTION 14 (B) REQUIRES THAT EACH "CONTRACT MADE BY THE UNITED STATES * * * WITH A CONTRACTOR FOR ANY PUBLIC WORK OR SERVICE, SHALL CONTAIN A PROVISION THAT THE CONTRACTOR WILL BUY NO BITUMINOUS COAL TO USE ON OR IN THE CARRYING OUT OF SUCH CONTRACT, FROM ANY "PRODUCER" EXCEPT SUCH PRODUCER BE A MEMBER OF THE CODE SET OUT IN SECTION 4 OF THIS ACT * * *.' IN YOUR DECISION OF JANUARY 2, A-67002, YOU CALLED ATTENTION TO THE FACT THAT A "PRODUCER" IS DEFINED IN SECTION 19 OF THE ACT AS BEING ANY PERSON, FIRM, CORPORATION, ETC., ENGAGED IN MINING BITUMINOUS COAL. YOUR DECISION IS REQUESTED AS TO---

(A) WHETHER THE CONTRACTOR MAY PURCHASE BITUMINOUS COAL OF A DEALER WHO IS NOT A "PRODUCER.'

(B) IF SUCH PURCHASE MAY BE MADE, WILL IT BE NECESSARY FOR THE GOVERNMENT TO REQUIRE THAT THE COAL BE PRODUCED BY A "PRODUCER" WHO IS A MEMBER OF THE CODE?

YOUR DECISION TO THE TREASURY DEPARTMENT DATED DECEMBER 19, 1935, A 68690, STATES THAT THE PROVISION PRESCRIBED BY TREASURY CIRCULAR NO. 123 IS NOT REQUIRED IN CONTRACTS FOR THE PURCHASE OF BUTTER AND CHEESE, OR OTHER PROVISIONS. THIS DEPARTMENT IS OF THE OPINION THAT THIS PROVISION IS LIKEWISE NOT APPLICABLE TO THE PURCHASE OF ANY SUPPLIES, MATERIAL, OR EQUIPMENT. IT IS, THEREFORE, REQUESTED THAT YOU INFORM THIS DEPARTMENT OF YOUR DECISION ON THIS QUESTION.

PURSUANT TO SECTION 14 (B) OF THE ACT, THE TREASURY DEPARTMENT DESIGNED THE FOLLOWING PARAGRAPH TO BE INCORPORATED IN ALL CONTRACTS FOR PUBLIC WORK OR SERVICE:

"IN ACCORDANCE WITH THE PROVISIONS OF SECTION 14 (B) OF THE BITUMINOUS COAL CONSERVATION ACT OF 1935 (PUBLIC, NO. 402, 74TH CONGRESS, APPROVED AUGUST 30, 1935), THE CONTRACTOR AGREES THAT HE WILL BUY NO BITUMINOUS COAL TO USE ON OR IN THE CARRYING OUT OF THIS CONTRACT FROM ANY PRODUCER EXCEPT SUCH PRODUCER BE A MEMBER OF THE BITUMINOUS COAL CODE SET OUT IN ACCORDANCE WITH SECTION 4 OF SAID ACT AS CERTIFIED TO BY THE NATIONAL BITUMINOUS COAL COMMISSION.'

IN SOME CASES, WHEN WE ATTEMPT TO MAKE A CONTRACT FOR FURNISHING ELECTRIC POWER FOR THE OPERATION OF AIDS TO AIR NAVIGATION, THE CONTRACTOR STATES THAT HE WILL NOT SIGN A CONTRACT CONTAINING THIS PROVISION UNLESS THERE IS ADDED TO IT THE FOLLOWING: "TO THE BEST OF OUR KNOWLEDGE AND BELIEF.' UPON INQUIRY OF THE COAL COMMISSION AS TO WHETHER SUCH AN AMENDED PROVISION WOULD BE ACCEPTABLE, THE COMMISSION MAKES THE FOLLOWING STATEMENT:

"WHILE AUTHORIZATION FOR ANY VARIATION FROM THIS PROVISION, IT WOULD SEEM, SHOULD COME FROM THE TREASURY DEPARTMENT, NEVERTHELESS IT APPEARS TO THE COMMISSION THAT SUCH VARIATION SHOULD NOT BE PERMITTED FOR THE REASON THAT SUCH A CHANGE IN THE PROVISIONS OF THE CONTRACT IS UNNECESSARY, AS WELL AS INADVISABLE. IT SEEMS TO THE COMMISSION THAT THE CONTRACTOR SHOULD BE REQUIRED TO AGREE TO THE REQUIREMENTS OF SECTION 14 (B), IN THE FORM REQUIRED BY CIRCULAR LETTER NO. 123, BUT THAT HE SHOULD BE PERMITTED THEREAFTER TO CERTIFY THAT HE HAS MET WITH SUCH REQUIREMENTS "TO THE BEST OF HIS KNOWLEDGE AND BELIEF.'

"IT WOULD SEEM THAT THE RESERVATION BEING RESTRICTED TO THE CERTIFICATE OF COMPLIANCE TO BE MADE BY THE ELECTRIC COMPANY WOULD BE A REASONABLE AND SATISFACTORY SOLUTION OF THE QUESTION PRESENTED. IF SUCH IS NOT THE CASE, THE COMMISSION WILL BE PLEASED TO CONSIDER THE MATTER THER.'

SUCH CONTRACTS FREQUENTLY REQUIRE THE BUILDING OF POLE LINES AT CONSIDERABLE EXPENSE AND WITH THE UNDERSTANDING THAT THE GOVERNMENT WILL SHARE A PORTION OF THE CONSTRUCTION COST AND THAT PAYMENT THEREFOR WILL BE MADE UPON COMPLETION OF THE LINE. THE STATEMENT OF THE COAL COMMISSION QUOTED ABOVE INDICATES THAT THE STANDARD COAL PARAGRAPH SHOULD BE USED, BUT THAT A CERTIFICATE IN ADDITION THERETO MAY BE FURNISHED TO WHICH MAY BE ADDED THE PROVISION "TO THE BEST OF OUR KNOWLEDGE AND BELIEF.' THAT ARRANGEMENT APPARENTLY IS NOT ACCEPTABLE TO CERTAIN POWER COMPANIES AND THE EXCEPTION QUOTED MUST BE ADDED TO THE STANDARD PARAGRAPH BEFORE THE CONTRACTOR WILL SIGN.

YOUR ADVICE IS RESPECTFULLY REQUESTED AS TO WHETHER, IF SUCH AN AMENDED PROVISION IS INCLUDED IN THE CONTRACT, YOU WILL RAISE ANY OBJECTION TO THE PAYMENT. YOUR COOPERATION IN FURNISHING US AN EARLY DECISION WILL BE APPRECIATED INASMUCH AS WE DESIRE TO PLACE CERTAIN STATIONS IN OPERATION AS SOON AS THE CONTRACTS FOR ELECTRIC POWER HAVE BEEN ENTERED INTO.

YOUR DECISION A-67002 DEFINES SUFFICIENTLY FOR THE NEEDS OF THIS DEPARTMENT THE WORD "SERVICE," BUT DOES NOT IN SUCH DETAIL DEFINE "PUBLIC WORK.' IN ORDER THAT THE DEPARTMENT MAY COMPLY STRICTLY WITH YOUR INTERPRETATION OF PUBLIC WORK, THE FURTHER AMPLIFICATION OF ITS DEFINITION BY YOU WILL BE APPRECIATED.

SECTION 14 OF THE BITUMINOUS COAL CONSERVATION ACT OF 1935, APPROVED AUGUST 30, 1935, 49 STAT. 1006, PROVIDES:

14. (A) NO BITUMINOUS COAL SHALL BE PURCHASED BY THE UNITED STATES, OR ANY DEPARTMENT OR AGENCY THEREOF, PRODUCED AT ANY MINE, WHERE THE PRODUCER HAS NOT COMPLIED WITH THE PROVISIONS OF THE CODE SET OUT IN SECTION 4 OF THIS ACT.

(B) EACH CONTRACT MADE BY THE UNITED STATES, OR ANY DEPARTMENT OR AGENCY THEREOF, WITH A CONTRACTOR FOR ANY PUBLIC WORK, OR SERVICE, SHALL CONTAIN A PROVISION THAT THE CONTRACTOR WILL BUY NO BITUMINOUS COAL TO USE ON OR IN THE CARRYING OUT OF SUCH CONTRACT FROM ANY PRODUCER EXCEPT SUCH PRODUCER BE A MEMBER OF THE CODE SET OUT IN SECTION 4 OF THIS ACT AS CERTIFIED TO BY THE NATIONAL BITUMINOUS COAL COMMISSION.

MY DECISION OF JANUARY 2, 1936, A-67002, 15 COMP. GEN. 577, CONCLUDED AS FOLLOWS:

IT IS NOTED THAT SECTION 14 (B) DIFFERS MATERIALLY FROM SECTION 14 (A) OF THE ACT. SECTION 14 (A) PROHIBITS THE PURCHASE OF BITUMINOUS COAL BY THE UNITED STATES, OR ANY DEPARTMENT OR AGENCY THEREOF, UNLESS SUCH COAL WAS PRODUCED AT A MINE WHERE THE PRODUCER HAS COMPLIED WITH THE CODE AS SET OUT IN THE ACT, WHEREAS SECTION 14 (B) PROHIBITS CONTRACTORS FOR ANY PUBLIC WORK, OR SERVICE, FROM BUYING BITUMINOUS COAL TO USE ON OR IN THE CARRYING OUT OF SUCH CONTRACT FROM A PRODUCER WHO IS NOT A MEMBER OF SUCH CODE. A "PRODUCER" IS DEFINED IN SECTION 19 OF THE ACT AS BEING ANY PERSON, FIRM, CORPORATION, ETC., "ENGAGED IN MINING BITUMINOUS COAL.'

THE REQUIREMENT OF SECTION 14 (B) IS ONLY FOR A PROVISION TO THE EFFECT THAT THE CONTRACTOR FOR ANY PUBLIC WORK, OR SERVICE, WILL BUY NO BITUMINOUS COAL FOR USE ON OR IN THE CARRYING OUT OF HIS CONTRACT FROM ANY PRODUCER EXCEPT A CODE MEMBER. ACCORDINGLY, SAID PROVISION WOULD NOT PRECLUDE PURCHASES OF BITUMINOUS COAL BY THE CONTRACTOR FROM A DEALER, THAT IS, A BONA FIDE BROKER, JOBBER, COMMISSION MERCHANT, WHOLESALER, OR RETAILER, AS DISTINGUISHED FROM A PRODUCER OR PRODUCER'S AGENT OR SUBSIDIARY, MARKETING AGENCY OF PRODUCERS AS PROVIDED FOR UNDER PART I (A) OF SECTION 4, OR OTHER INTERMEDIARY OR INSTRUMENTALITY OF A PRODUCER. THE CASE OF SUCH PURCHASES BY CONTRACTORS FROM DEALERS, IT WILL NOT BE NECESSARY FOR THE GOVERNMENT TO REQUIRE THAT THE COAL BE PRODUCED BY MEMBER OF THE CODE.

"PUBLIC WORKS" ARE DEFINED IN WEBSTER'S NEW INTERNATIONAL DICTIONARY AS "ALL FIXED WORKS CONSTRUCTED OR BUILT FOR PUBLIC USE OR ENJOYMENT, AS RAILWAYS, DOCKS, CANALS, ETC., OR CONSTRUCTED WITH PUBLIC FUNDS AND OWNED BY THE PUBLIC.' THE SUPREME COURT OF THE UNITED STATES, HOWEVER, HAS HELD THAT---

WHETHER A WORK IS PUBLIC OR NOT DOES NOT DEPEND UPON ITS BEING ATTACHED TO THE SOIL; IF IT BELONGS TO THE REPRESENTATIVE OF THE PUBLIC IT IS PUBLIC. TITLE GUARANTY AND TRUST CO. V. CRANE CO., 219 U.S. 24, 33.

ANY CONSTRUCTIVE WORK OF A PUBLIC CHARACTER IS A PUBLIC WORK WITHIN THE MEANING OF THE STATUTE. SEE UNITED STATES V. PERTH AMBOY SHIPBUILDING AND ENGINEERING CO., 137 FED. 689, 693.

THE PROVISION IN EVERY GOVERNMENT CONTRACT FOR ANY PUBLIC WORK OR SERVICE TO THE EFFECT THAT THE CONTRACTOR WILL BUY NO BITUMINOUS COAL TO USE ON OR IN CARRYING OUT SUCH CONTRACT FROM ANY PRODUCER EXCEPT SUCH PRODUCER BE A MEMBER OF THE COAL CODE AS SET OUT IN THE ACT IS A REQUIREMENT OF LAW. MAY NOT BE MADE CONDITIONAL AND THERE ARE NO EXCEPTIONS PROVIDED IN THE STATUTE. THERE IS NO LEGAL AUTHORITY FOR QUALIFYING THE REQUIRED PROVISION. APPROPRIATED FUNDS ARE NOT AVAILABLE FOR MAKING PAYMENTS UNDER CONTRACTS FOR ANY PUBLIC WORK OR SERVICE WHICH DO NOT CONTAIN THE PROVISION REQUIRED BY SECTION 14 (B) OF THE ACT. THE PROVISION MAY NOT BE MODIFIED TO SATISFY THE DESIRES OR DEMANDS OF PROSPECTIVE CONTRACTORS.

THE PURCHASE OF SUPPLIES, MATERIAL, OR EQUIPMENT IS NOT A CONTRACT FOR A PUBLIC WORK OR SERVICE WITHIN THE MEANING OF SECTION 14 (B) OF THE ACT BUT A CONTRACT PROVIDING SPECIFICALLY FOR THE MANUFACTURE OR PRODUCTION OF EQUIPMENT WHERE THE WORK IS TO BE PERFORMED IN ACCORDANCE WITH GOVERNMENT SPECIFICATIONS AND UNDER GOVERNMENT SUPERVISION WOULD BE A CONTRACT FOR A "PUBLIC WORK OR SERVICE" WITHIN THE MEANING OF THE SECTION.