A-76135, JULY 3, 1936, 16 COMP. GEN. 5

A-76135: Jul 3, 1936

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

AS FOLLOWS: THE RESETTLEMENT ADMINISTRATION HAS NOTED YOUR DECISIONS TO THE EFFECT THAT FUNDS APPROPRIATED BY THE EMERGENCY RELIEF APPROPRIATION ACT OF 1935 ARE NOT AVAILABLE FOR THE PURCHASE OF PRISON-MADE GOODS. AS FOLLOWS: "I HAVE TO ADVISE. ARE NOT APPLICABLE TO PURCHASES UNDER NATIONAL INDUSTRIAL RECOVERY FUNDS. WHEN PAYMENT FOR THE ARTICLES IS TO BE MADE WITH FUNDS APPROPRIATED TO CARRY OUT THE PURPOSES OF THE NATIONAL INDUSTRIAL RECOVERY T.'. FUNDS APPROPRIATED BY TITLE II OF THE NATIONAL INDUSTRIAL RECOVERY ACT OF 1933 HAVE HERETOFORE BEEN TRANSFERRED TO THE RESETTLEMENT ADMINISTRATION. YOUR OPINION IS THEREFORE REQUESTED. IS THE RESETTLEMENT ADMINISTRATION REQUIRED TO OBTAIN A CERTIFICATE OF CLEARANCE FROM THE FEDERAL PRISON INDUSTRIES.

A-76135, JULY 3, 1936, 16 COMP. GEN. 5

PURCHASES - FEDERAL, STATE, ETC., PRISON-MADE GOODS - RESETTLEMENT ADMINISTRATION PURCHASES OF ARTICLES SUCH AS PRODUCED BY THE RESPECTIVE FEDERAL PENITENTIARIES FROM FUNDS ALLOTTED TO THE RESETTLEMENT ADMINISTRATION FROM THE APPROPRIATION MADE TO CARRY OUT THE PROVISIONS OF THE NATIONAL INDUSTRIAL RECOVERY ACT OF JUNE 16, 1933, 48 STAT. 195, MAY NOT BE MADE FROM COMMERCIAL FIRMS UNDER PRESENT REGULATIONS WITHOUT A CERTIFICATE OF CLEARANCE FROM THE FEDERAL PRISON INDUSTRIES, INC. THE RESETTLEMENT ADMINISTRATION MAY NOT PURCHASE ARTICLES MANUFACTURED BY PRISONERS IN STATE, TERRITORIAL, OR MUNICIPAL PENAL, OR CORRECTIONAL INSTITUTIONS.

ACTING COMPTROLLER GENERAL ELLIOTT TO THE ADMINISTRATOR, RESETTLEMENT ADMINISTRATION, JULY 3, 1936:

THERE HAS BEEN CONSIDERED YOUR LETTER OF MAY 29, 1936, AS FOLLOWS:

THE RESETTLEMENT ADMINISTRATION HAS NOTED YOUR DECISIONS TO THE EFFECT THAT FUNDS APPROPRIATED BY THE EMERGENCY RELIEF APPROPRIATION ACT OF 1935 ARE NOT AVAILABLE FOR THE PURCHASE OF PRISON-MADE GOODS. WITH REFERENCE, HOWEVER, TO THE PURCHASE OF PRISON-MADE GOODS OUT OF FUNDS APPROPRIATED BY TITLE II OF THE NATIONAL INDUSTRIAL RECOVERY ACT OF 1933, YOU STATED IN DECISION TO THE ADMINISTRATOR, FEDERAL EMERGENCY ADMINISTRATION OF PUBLIC WORKS, A-67190 AND A-67191, DATED MARCH 27, 1936, AS FOLLOWS:

"I HAVE TO ADVISE, THEREFORE, THAT THE DECISIONS REFERRED TO IN YOUR LETTER, A-67190 AND A-67191, ARE NOT APPLICABLE TO PURCHASES UNDER NATIONAL INDUSTRIAL RECOVERY FUNDS. HOWEVER, IN VIEW OF THE ABOVE QUOTED PROVISIONS OF THE NATIONAL INDUSTRIAL RECOVERY ACT AND EXECUTIVE ORDERS 6252, AUGUST 19, 1933, AND 6929, DECEMBER 26, 1934, THIS OFFICE WOULD NOT BE REQUIRED TO OBJECT TO AMENDMENT OF THE REGULATIONS HEREINBEFORE REFERRED TO SO AS TO PROVIDE THAT PURCHASES OF ARTICLES SUCH AS PRODUCED BY THE RESPECTIVE FEDERAL PENITENTIARIES MAY BE PURCHASED ELSEWHERE WITHOUT OBTAINING CLEARANCE FROM THE FEDERAL PRISON INDUSTRIES, INC., WHEN PAYMENT FOR THE ARTICLES IS TO BE MADE WITH FUNDS APPROPRIATED TO CARRY OUT THE PURPOSES OF THE NATIONAL INDUSTRIAL RECOVERY T.'

FUNDS APPROPRIATED BY TITLE II OF THE NATIONAL INDUSTRIAL RECOVERY ACT OF 1933 HAVE HERETOFORE BEEN TRANSFERRED TO THE RESETTLEMENT ADMINISTRATION. YOUR OPINION IS THEREFORE REQUESTED, WITH REFERENCE TO THE EXPENDITURE OF SUCH FUNDS, ON THE FOLLOWING POINTS:

1. IS THE RESETTLEMENT ADMINISTRATION REQUIRED TO OBTAIN A CERTIFICATE OF CLEARANCE FROM THE FEDERAL PRISON INDUSTRIES, PRIOR TO MAKING PURCHASES FROM COMMERCIAL FIRMS OF ITEMS WHICH CAN BE PROCURED FROM THE FEDERAL PRISON INDUSTRIES?

2. MAY THE RESETTLEMENT ADMINISTRATION PURCHASE ARTICLES, GOODS, SUPPLIES, ETC., MANUFACTURED BY PRISONERS IN FEDERAL, STATE, TERRITORIAL, OR MUNICIPAL PENAL OR CORRECTIONAL INSTITUTIONS?

3. MAY CONTRACTS AND PURCHASE ORDERS OF THIS ADMINISTRATION STIPULATE THAT PRISON MADE ARTICLES MUST BE SO DESIGNATED AND WILL NOT BE ACCEPTED IF SUCH ARTICLES CAN BE OBTAINED FROM PRIVATE INDUSTRY AT REASONABLE PRICES AND IN SUFFICIENT QUANTITIES?

THE DECISION OF MARCH 27, 1936, 15 COMP. GEN. 859, POINTED OUT THAT THE DECLARATION OF POLICY CONTAINED IN SECTION 1 OF THE NATIONAL INDUSTRIAL RECOVERY ACT OF JUNE 16, 1933, 48 STAT. 195, IS IN PART AS FOLLOWS:

* * * IT IS HEREBY DECLARED TO BE THE POLICY OF CONGRESS * * * TO PROMOTE THE FULLEST POSSIBLE UTILIZATION OF THE PRESENT PRODUCTIVE CAPACITY OF INDUSTRIES, * * * TO REDUCE AND RELIEVE UNEMPLOYMENT, TO IMPROVE STANDARDS OF LABOR, AND OTHERWISE TO REHABILITATE INDUSTRY * * *.

TITLE II OF SAID ACT AUTHORIZED THE PRESIDENT TO CREATE THE FEDERAL EMERGENCY ADMINISTRATION OF PUBLIC WORKS. SECTION 203 (A) AUTHORIZED HIM TO CONSTRUCT OR AID IN THE CONSTRUCTION OF CERTAIN PUBLIC WORKS PROJECTS "WITH A VIEW TO INCREASING EMPLOYMENT QUICKLY," AND SECTION 206 PROVIDED THAT ALL CONTRACTS LET FOR CONSTRUCTION PROJECTS AND ALL LOANS AND GRANTS PURSUANT TO SAID TITLE II SHOULD CONTAIN SUCH PROVISIONS AS NECESSARY TO INSURE, AMONG OTHER THINGS,")1) THAT NO CONVICT LABOR SHALL BE EMPLOYED ON ANY SUCH PROJECT.' SECTION 209 AUTHORIZED THE PRESIDENT TO PRESCRIBE SUCH RULES AND REGULATIONS AS MIGHT BE NECESSARY TO CARRY OUT THE PURPOSES OF SAID TITLE II.

PURSUANT TO THE AUTHORITY VESTED IN HIM BY SECTION 209 OF THE SAID ACT OF JUNE 16, 1933, THE PRESIDENT ISSUED EXECUTIVE ORDER NO. 6252, DATED AUGUST 19, 1933, PRESCRIBING CERTAIN REGULATIONS, SECTION 1 OF WHICH PROVIDED THAT---

NO CONVICT LABOR SHALL BE EMPLOYED ON ANY PROJECT CONSTRUCTED IN WHOLE OR IN PART UNDER THE PROVISIONS OF TITLE II OF SAID ACT. NO MATERIALS MANUFACTURED OR PRODUCED BY CONVICT LABOR SHALL BE USED ON ANY SUCH PROJECT. BUT BY PARAGRAPH 2 OF EXECUTIVE ORDER NO. 6929, ISSUED UNDER DATE OF DECEMBER 26, 1934, THERE WAS DELEGATED TO THE FEDERAL EMERGENCY ADMINISTRATOR OF PUBLIC WORKS THE POWER "TO ALTER, AMEND, OR WAIVE ANY OR ALL RULES AND REGULATIONS SET FORTH IN EXECUTIVE ORDER NO. 6252 OF AUGUST 19, 1933," AND ACTING PURSUANT TO THE AUTHORITY THUS VESTED IN HIM, THE FEDERAL EMERGENCY ADMINISTRATOR OF PUBLIC WORKS ISSUED REGULATION P.W. 26649, APPROVED BY THE PRESIDENT DECEMBER 26, 1934, PARAGRAPH 1 OF WHICH PROVIDES:

CONVICT LABOR.--- NO CONVICT LABOR SHALL BE EMPLOYED ON ANY PROJECT CONSTRUCTED IN WHOLE OR IN PART UNDER THE PROVISION OF TITLE II OF SAID ACT. NO MATERIALS MANUFACTURED OR PRODUCED IN WHOLE OR IN PART BY CONVICT LABOR SHALL BE DIRECTLY INCORPORATED INTO ANY SUCH PROJECT EXCEPT IN THOSE CASES IN WHICH THE USE OF SUCH MATERIALS IS REQUIRED BY APPLICABLE STATUTES.

BY DECISION OF THIS OFFICE DATED JULY 5, 1935, A-62901, THE SECRETARY OF WAR WAS ADVISED THAT IN VIEW OF THE EXCEPTION MADE IN THE ABOVE QUOTED REGULATION AND THE PROVISIONS OF SECTION 7 OF THE ACT OF MAY 27, 1930, 46 STAT. 392, FUNDS AVAILABLE UNDER ALLOTMENTS MADE BY THE FEDERAL EMERGENCY ADMINISTRATION OF PUBLIC WORKS COULD BE USED IN REIMBURSING THE FEDERAL PRISON INDUSTRIES, INC., FOR PURCHASES OF ARTICLES MADE IN FEDERAL PRISONS. IN THIS CONNECTION IT IS TO BE OBSERVED THAT P.W.A. FORM NO. 188, RULES AND REGULATIONS APPLICABLE TO LOANS AND GRANTS UNDER TITLE II OF THE ACT OF JUNE 16, 1933, SUPRA, AND FORM NO. P.W.A. 200 APPLICABLE TO GRANTS, ISSUED AUGUST 12, 1935, PROVIDE AS FOLLOWS:

1. (A) CONVICT LABOR.--- NO CONVICT LABOR SHALL BE EMPLOYED ON THE PROJECT, AND NO MATERIALS MANUFACTURED OR PRODUCED BY CONVICT LABOR SHALL BE USED ON THE PROJECT UNLESS REQUIRED BY LAW.

WITH RESPECT TO THE APPROPRIATION MADE BY THE EMERGENCY RELIEF APPROPRIATION ACT OF APRIL 8, 1935, YOUR ATTENTION IS INVITED TO DECISION OF DECEMBER 19, 1935, 15 COMP. GEN. 542, WHEREIN IT WAS STATED:

THE APPROPRIATION MADE BY THE EMERGENCY RELIEF APPROPRIATION ACT OF APRIL 8, 1935, PROVIDED FUNDS "TO PROVIDE RELIEF, WORK RELIEF, AND TO INCREASE EMPLOYMENT BY PROVIDING FOR USEFUL JECTS.' IT IS PROVIDED IN SECTION 8 OF SAID ACT THAT "WHENEVER PRACTICABLE IN THE CARRYING OUT OF THE PROVISIONS OF THIS JOINT RESOLUTION, FULL ADVANTAGE SHALL BE TAKEN OF THE FACILITIES OF PRIVATE ENTERPRISE.' THERE WOULD, OF COURSE, BE NO AUTHORITY IN THE SECRETARY OF TREASURY, THE DIRECTOR OF PROCUREMENT, OR ANY OTHER OFFICER OF THE GOVERNMENT TO ESTABLISH PURSUANT TO THE ACT OF APRIL 8, 1935, A SYSTEM OF PURCHASE THAT IN ITS APPLICATION WOULD NULLIFY EXISTING LAWS AND REGULATIONS GOVERNING MATTERS SUCH AS SECTION 3709, SECTION 3744 AND OTHER SECTIONS OF THE REVISED STATUTES. HOWEVER, THE FUNDS IN QUESTION ARE FUNDS WHICH HAVE BEEN ALLOCATED OR ARE TO BE ALLOCATED FROM THE APPROPRIATION MADE IN THE EMERGENCY RELIEF APPROPRIATION ACT OF 1935 "TO PROVIDE RELIEF, WORK RELIEF, AND TO INCREASE EMPLOYMENT BY PROVIDING FOR USEFUL PROJECTS" AND TO REQUIRE PURCHASE OF ARTICLES AND SUPPLIES MANUFACTURED IN FEDERAL PRISONS WOULD PROVIDE EMPLOYMENT FOR THE INMATES THEREOF, BUT WOULD NEITHER PROVIDE WORK RELIEF NOR INCREASE EMPLOYMENT--- THE MAJOR PURPOSE OF THE STATUTE--- NOR BE IN HARMONY WITH THE PROVISIONS OF SECTION 8 OF THE SAID ACT AS TO TAKING ADVANTAGE OF THE FACILITIES OF PRIVATE ENTERPRISE. THEREFORE, THE MAKING OF SUCH PURCHASES WOULD APPEAR TO BE OUT OF LINE WITH THE PURPOSES FOR WHICH THE SAID APPROPRIATION WAS MADE. ACCORDINGLY, IT WILL NOT BE NECESSARY TO OBTAIN A CERTIFICATE OF CLEARANCE FROM THE FEDERAL PRISON INDUSTRIES, INCORPORATED, PRIOR TO MAKING PURCHASES OF ARTICLES SUCH AS PRODUCED BY THE RESPECTIVE FEDERAL PENITENTIARIES. THIS APPLIES NOT ONLY TO PURCHASES MADE BY AND UNDER THE SYSTEM ESTABLISHED BY THE DIRECTOR OF PROCUREMENT PURSUANT TO SECTION 11 (A), EXECUTIVE ORDER NO. 7034, MAY 6, 1935, BUT TO ALL PURCHASES MADE BY THE RESPECTIVE DEPARTMENTS AND ESTABLISHMENTS OF THE GOVERNMENT, PAYMENT FOR WHICH IS TO BE MADE FROM FUNDS ALLOCATED FROM THE APPROPRIATION MADE IN THE SAID EMERGENCY RELIEF APPROPRIATION ACT OF 1935, SUPRA.

HOWEVER, IT IS UNDERSTOOD THAT THE FUNDS REFERRED TO IN YOUR LETTER ARE NOT FUNDS APPROPRIATED BY THE EMERGENCY RELIEF APPROPRIATION ACT OF APRIL 8, 1935, BUT ARE FUNDS MADE AVAILABLE BY THE ACT OF JUNE 16, 1933, 48 STAT. 275, FOR CARRYING OUT THE PROVISIONS OF THE NATIONAL INDUSTRIAL RECOVERY ACT OF JUNE 16, 1933, 48 STAT. 195, AND ALLOTTED TO THE RESETTLEMENT ADMINISTRATION. THEREFORE, SO LONG AS THE SAID REGULATIONS, SUPRA, REMAIN IN FORCE AND EFFECT--- AND IT MAY BE STATED FOR YOUR INFORMATION THAT IT HAS BEEN INFORMALLY ASCERTAINED THAT THERE HAS BEEN NO CHANGE IN THE SAID REGULATIONS--- THE DECISION OF DECEMBER 19, 1935,SUPRA, WITH REFERENCE TO PURCHASES FROM FUNDS APPROPRIATED UNDER THE SAID ACT OF APRIL 8, 1935, IS NOT APPLICABLE TO PURCHASES MADE FROM FUNDS APPROPRIATED UNDER THE SAID ACT OF JUNE 16, 1933.

ACCORDINGLY, YOUR FIRST QUESTION IS ANSWERED IN THE AFFIRMATIVE AND YOUR THIRD QUESTION IS ANSWERED IN THE NEGATIVE. YOUR SECOND QUESTION IS ANSWERED IN THE AFFIRMATIVE AS TO FEDERAL INSTITUTIONS AND IN THE NEGATIVE AS TO OTHER INSTITUTIONS.