A-73779, MAY 4, 1936, 15 COMP. GEN. 956

A-73779: May 4, 1936

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SOME OF THESE PERSONS ARE TAKEN FROM THE RELIEF ROLLS. WHILE OTHERS ARE NOT. YOU STATED THAT YOU WERE NOT REQUIRED TO OBJECT TO THE USE OF FUNDS FOR OTHERWISE PROPER PAYMENTS PURSUANT TO ADMINISTRATIVE ORDER NO. 4 OF THAT ADMINISTRATION. IS APPLICABLE. BOTH THAT DECISION AND ADMINISTRATIVE ORDER NO. 4 APPEARED TO THIS ADMINISTRATION TO EMBODY THE LEGAL POSITION THAT THE HIRING OF OWNER OPERATORS OF EQUIPMENT RESULTS IN AN EMPLOYER-EMPLOYEE RELATIONSHIP BETWEEN THE UNITED STATES AND SUCH PERSONS AND THAT NO CONTRACT FOR IMPERSONAL SERVICES IS NECESSARILY INVOLVED. IT WAS OUR UNDERSTANDING THAT THE SERVICES OF BOTH RELIEF AND NON-RELIEF PERSONS OWNING AND OPERATING THEIR OWN EQUIPMENT MIGHT BE PAID FOR BY THIS ADMINISTRATION IN ACCORDANCE WITH ADMINISTRATIVE ORDER NO. 4 OF THE WORKS PROGRESS ADMINISTRATION.

A-73779, MAY 4, 1936, 15 COMP. GEN. 956

RELIEF WORKERS WITH EQUIPMENT - MANNER OF EMPLOYMENT THE EMPLOYMENT OF RELIEF WORKERS WITH EQUIPMENT NECESSARY TO THE PERFORMANCE OF THE REGULAR DUTIES FOR WHICH EMPLOYED UNDER FUNDS APPROPRIATED BY THE EMERGENCY RELIEF APPROPRIATION ACT OF 1935, 49 STAT. 115, INVOLVES ESSENTIALLY THE PROCUREMENT OF PERSONAL SERVICES, AND SUCH WORKERS NEED NOT BE OBTAINED THROUGH THE PROCUREMENT DIVISION ON THE BASIS OF NONPERSONAL SERVICE CONTRACTS.

COMPTROLLER GENERAL MCCARL TO THE ADMINISTRATOR, RESETTLEMENT ADMINISTRATION, MAY 4, 1936:

CONSIDERATION HAS BEEN GIVEN YOUR LETTER OF APRIL 10, 1936, AS FOLLOWS:

THE RESETTLEMENT ADMINISTRATION EMPLOYS ON MANY PROJECTS PERSONS WHO OWN AND OPERATE THEIR OWN EQUIPMENT, SUCH AS TRUCKS, TEAMS, ETC. SOME OF THESE PERSONS ARE TAKEN FROM THE RELIEF ROLLS, WHILE OTHERS ARE NOT. A PROBLEM HAS ARISEN AS TO THE MANNER IN WHICH THE LATTER CLASS MAY BE EMPLOYED.

IN YOUR DECISION A-64205, DATED SEPTEMBER 14, 1935, TO THE ADMINISTRATOR OF THE WORKS PROGRESS ADMINISTRATION, YOU STATED THAT YOU WERE NOT REQUIRED TO OBJECT TO THE USE OF FUNDS FOR OTHERWISE PROPER PAYMENTS PURSUANT TO ADMINISTRATIVE ORDER NO. 4 OF THAT ADMINISTRATION, WHICH PROVIDES THAT RATES OF PAYMENT TO PERSONS OWNING AND OPERATING THEIR OWN EQUIPMENT, EMPLOYED TO OPERATE THE SAME ON ANY PROJECT WITH RESPECT TO WHICH THE MONTHLY EARNINGS SCHEDULE SET FORTH IN PART I OF EXECUTIVE ORDER NO. 7046 OF MAY 20, 1935, IS APPLICABLE, SHALL BE DETERMINED BY THE DEPARTMENT OR FEDERAL AGENCY, ETC., HAVING GENERAL SUPERVISION OF THE PROJECT, IN ACCORDANCE WITH LOCAL CONDITIONS AND LOCAL RATES FOR SIMILAR SERVICES, INCLUDING BOTH THE USE OF THE EQUIPMENT AND THE SERVICES OF THE OWNER IN OPERATING THE SAME.

BOTH THAT DECISION AND ADMINISTRATIVE ORDER NO. 4 APPEARED TO THIS ADMINISTRATION TO EMBODY THE LEGAL POSITION THAT THE HIRING OF OWNER OPERATORS OF EQUIPMENT RESULTS IN AN EMPLOYER-EMPLOYEE RELATIONSHIP BETWEEN THE UNITED STATES AND SUCH PERSONS AND THAT NO CONTRACT FOR IMPERSONAL SERVICES IS NECESSARILY INVOLVED. THE ORDER BY ITS TERMS PURPORTED TO EXEMPT A CLASS OF WORKERS FROM THE WAGE RATES SET FORTH IN PART I OF EXECUTIVE ORDER NO. 7046 OF MAY 20, 1935, AND TO PROVIDE, PURSUANT TO SECTION (E) OF PART I OF THE SAME EXECUTIVE ORDER, THAT WAGE RATES FOR SUCH PERSONS BE CALCULATED IN ACCORDANCE WITH LOCAL WAGE CONDITIONS. ACCORDINGLY, IT WAS OUR UNDERSTANDING THAT THE SERVICES OF BOTH RELIEF AND NON-RELIEF PERSONS OWNING AND OPERATING THEIR OWN EQUIPMENT MIGHT BE PAID FOR BY THIS ADMINISTRATION IN ACCORDANCE WITH ADMINISTRATIVE ORDER NO. 4 OF THE WORKS PROGRESS ADMINISTRATION, SUBJECT, OF COURSE, TO THE LIMITATIONS CONTAINED IN SECTION (C), PART III OF EXECUTIVE ORDER NO. 7046. IF OWNER-OPERATORS OF EQUIPMENT ARE EMPLOYEES, AS SEEMED NECESSARILY IMPLIED BY YOUR ABOVE-CITED DECISION, IT APPEARED THAT THE USUAL ADMINISTRATIVE PROCEDURE FOR THE HIRING AND PAYING OF SUCH PERSONS SHOULD BE FOLLOWED WHETHER OR NOT THEY WERE TAKEN FROM THE PUBLIC RELIEF ROLLS. THERE WAS NO LEGAL NECESSITY APPARENT FOR OBTAINING THE SERVICES OF SUCH PERSONS THROUGH THE PROCUREMENT DIVISION OF THE TREASURY DEPARTMENT IN THE INSTANCES IN WHICH THE INDIVIDUAL PERSONS HAPPENED TO BE NON RELIEF EMPLOYEES.

WHILE THIS ADMINISTRATION WAS AWARE THAT THE WORKS PROGRESS ADMINISTRATION HAD BEEN OBTAINING ITS NON-RELIEF OWNER-OPERATORS OF EQUIPMENT THROUGH THE PROCUREMENT DIVISION, IT WAS OUR UNDERSTANDING THAT THIS COURSE OF ACTION WAS DICTATED BY CONSIDERATIONS INVOLVING ADMINISTRATIVE POLICY AND WAS NOT REQUIRED BY ANY APPLICABLE STATUTE, ORDER, OR REGULATION. THE LETTER OF THE ADMINISTRATOR OF THE WORKS PROGRESS ADMINISTRATION TO YOU (DATED DECEMBER 10, 1935) AND YOUR REPLY THERETO (A-51627 OF JANUARY 8, 1936) WERE HENCE INTERPRETED AS SETTING FORTH THE APPROPRIATE PROCEDURE IN THE EVENT THAT SUCH NON-RELIEF OWNER- OPERATORS WERE AS A MATTER OF FACT OBTAINED THROUGH THE PROCUREMENT DIVISION RATHER THAN AS ESTABLISHING A LEGAL REQUIREMENT THAT THEY BE OBTAINED THROUGH THE PROCUREMENT DIVISION.

SOME DOUBT APPEARS, HOWEVER, TO HAVE ARISEN AS TO THE CORRECT INTERPRETATION OF YOUR DECISIONS. IN NUMEROUS INSTANCES THROUGHOUT THE COUNTRY OFFICIALS OF THE TREASURY DEPARTMENT ARE REFUSING TO PASS PAYROLLS OF THIS ADMINISTRATION, FURNISHING AS THE REASON FOR THEIR ACTION THAT THE DECISIONS OF YOUR OFFICE REQUIRE THAT NON-RELIEF OWNER OPERATORS OF EQUIPMENT BE OBTAINED FROM THE PROCUREMENT DIVISION.

YOUR OPINION IS ACCORDINGLY REQUESTED AS TO WHETHER THIS ADMINISTRATION MAY CONTINUE TO HIRE NON-RELIEF OWNER-OPERATORS OF EQUIPMENT (SUBJECT TO THE LIMITATIONS CONTAINED IN SECTION (C), PART III OF EXECUTIVE ORDER NO. 7046) WITHOUT OBTAINING SUCH PERSONS THROUGH THE PROCUREMENT DIVISION AND MAY MAKE PAYMENTS TO SUCH PERSONS IN ACCORDANCE WITH ADMINISTRATIVE ORDER NO. 4 OF THE WORKS PROGRESS ADMINISTRATION.

PENDING YOUR DECISION, THE TREASURY DEPARTMENT WILL DOUBTLESS CONTINUE TO WITHHOLD PAYMENT ON NUMEROUS PAYROLLS THROUGHOUT THE COUNTRY INVOLVING PERSONS WHO ARE IN DIRE NEED. FURTHER, THE EMPLOYMENT POLICY OF THIS ADMINISTRATION WITH REFERENCE TO THE CLASS OF PERSONS INVOLVED CANNOT DEFINITIVELY BE SETTLED UNTIL YOUR DECISION IS RECEIVED. YOUR VERY EARLY CONSIDERATION OF THE PROBLEM IS HENCE RESPECTFULLY REQUESTED. REQUESTED.

RECEIPT IS ACKNOWLEDGED, ALSO, OF YOUR LETTER OF APRIL 24, 1936, ADVISING THAT FURTHER REPORTS FROM THE FIELD SHOW CONTINUED WITHHOLDINGS OF COMPENSATION PAYMENTS DUE TO THE UNCERTAINTY IN THE MATTER.

THE CITED DECISIONS OF THIS OFFICE ARE TO THE EFFECT THAT IN THE EXPENDITURE OF FUNDS APPROPRIATED BY THE EMERGENCY RELIEF APPROPRIATION ACT OF 1935 (49 STAT. 115), RELIEF WORKERS MAY BE EMPLOYED WITH EQUIPMENT, SUCH AS TEAMS, TRUCKS, AND OTHER SIMILAR EQUIPMENT, NECESSARY IN THE PERFORMANCE OF THE REGULAR DUTIES FOR WHICH EMPLOYED, AND MAY BE PAID A COMPENSATION RATE OTHER THAN THE PRESCRIBED "SECURITY WAGE" OR REGULAR RATE FOR PERSONAL SERVICE ONLY.

IN VIEW OF THE PRIMARY PURPOSE OF THE STATUTE TO PROVIDE WORK RELIEF FOR UNEMPLOYED PERSONS, SUCH EMPLOYMENTS ARE TO BE REGARDED AS ESSENTIALLY PERSONAL SERVICES RATHER THAN NONPERSONAL AND ARE NOT REQUIRED TO BE OBTAINED THROUGH THE PROCUREMENT DIVISION ON THE BASIS OF NONPERSONAL SERVICE CONTRACTS. SUCH SHOULD BE REGARDED AS THE GENERAL RULE BY ALL CONCERNED--- SUBJECT, OF COURSE, TO EXCEPTIONS INVOLVING CONTRACTS FOR USE PRIMARILY OF EQUIPMENT, SUCH AS STEAM SHOVELS, HEAVY TRUCKS, ETC., WHEREIN THE ELEMENT OF PERSONAL SERVICE IS MERELY INCIDENTAL, BECAUSE OF OTHER SPECIAL FACTS AND CIRCUMSTANCES.

WITH RESPECT TO THIS LATTER CLASS OF PROCUREMENTS, THE FOLLOWING WAS STATED IN DECISION A-51627, DATED JANUARY 8, 1936, TO THE ADMINISTRATOR, WORKS PROGRESS ADMINISTRATION:

THE THIRD PARAGRAPH OF YOUR LETTER, SUPRA, STATES:

"WE, ALSO, HAVE MANY PERSONS, OTHER THAN THOSE TAKEN FROM RELIEF ROLLS, WHO OWN AND OPERATE THEIR OWN TRUCKS AND OTHER EQUIPMENT AND WHO ARE GREATLY IN NEED OF WORK. TO SUBJECT THIS GROUP TO THE COMPETITIVE BIDDING WHICH IS NECESSARY UNDER PROCUREMENT PROCEDURE, SEEMS AN UNFAIR PRACTICE AND CREATES A HARDSHIP.'

IT IS ASSUMED THAT THE PROCUREMENT PROCEDURE REFERRED TO IS PROCUREMENT DIVISION BULLETIN S.P.O. NO. 27, DATED SEPTEMBER 7, 1935, ISSUED FOR THE GUIDANCE OF STATE PROCUREMENT OFFICERS. THE PURPOSE OF SUCH PROCEDURE IS TO ESTABLISH FIXED RATES FOR EACH TYPE OF EQUIPMENT EXPECTED TO BE USED ON PROJECTS UNDER THE WORKS PROGRESS ADMINISTRATION PRIOR TO THE ISSUING OF INVITATIONS TO BID (STANDARD FORM NO. 33). THE FIXED RATES SO DETERMINED ARE ATTACHED TO THE INVITATION TO ALL KNOWN TRUCK AND OTHER EQUIPMENT OWNERS TO SUBMIT BIDS, OR RATHER TO OFFER TO RENT THEIR TRUCKS OR OTHER EQUIPMENT AT THE ESTABLISHED RATES.

IT WILL BE SEEN THAT THE CONTRACTS ARE NOT ON A COMPETITIVE-RATE BASIS BUT ARE SIMPLY AN OFFER TO RENT, AT THE FIXED RATE, SUCH EQUIPMENT AS THE CONTRACTOR MAY HAVE, AND WILL BE INDEFINITE AS TO THE EXTENT OF USE THAT MAY BE EXPECTED, BUT WILL PROVIDE FOR RENTAL DURING SUCH PERIOD AS MAY BE REQUIRED.

WHEN SUCH SERVICES ARE REQUIRED THEY MAY BE PAID FOR ON W.P.A. FORM NO. 506, PROVIDED THERE HAS BEEN FURNISHED TO THIS OFFICE FOR USE IN THE AUDIT OF SUCH PAY ROLLS A LIST OF THE FIXED RENTAL RATES FOR THE DISTRICT IN WHICH THE SERVICE WAS RENDERED, AND, PROVIDED FURTHER, THAT PAYMENTS FOR SUCH SERVICES WILL BE VOUCHERED ON A SEPARATE ROLL FROM THAT CARRYING EMPLOYEES TAKEN FROM RELIEF ROLLS WHO OPERATE THEIR OWN EQUIPMENT.

THE USE OF W.P.A. FORM 506, PAY ROLL FOR PERSONAL SERVICES AND OWNER- OPERATED EQUIPMENT--- WORK PROJECTS, IS MODIFIED ACCORDINGLY.