A-83169, JANUARY 28, 1937, 16 COMP. GEN. 700

A-83169: Jan 28, 1937

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DEALS WAS NOT REQUIRED. AS TO OTHER SUPPLEMENTAL CODES IN CONNECTION WITH WHICH THERE WAS NO SUCH SPECIFIC EXCEPTION. WHEREIN IT IS STATED: * * * YOUR ATTENTION IS CALLED IN THIS CONNECTION TO THE FACT THAT ARTICLE 1 OF THE CONSTRUCTION INDUSTRY CODE OF FAIR COMPETITION PROVIDED THAT "THE PROVISIONS OF THIS CODE SHALL APPLY TO THE ENTIRE INDUSTRY * * * EXCLUDING * * * CONTRACTS ENTERED INTO PRIOR TO THE EFFECTIVE DATE.'. IT WOULD THEREFORE APPEAR THAT CLAIMANT WAS NOT COMPELLED TO COMPLY WITH THE PROVISIONS OF THE SUPPLEMENTARY CODES. IT IS CONSIDERED FAIR AND EQUITABLE THAT IT BE REIMBURSED THEREFOR. THAT IS. WHETHER INCREASED COSTS INCURRED BY REASON OF COMPLIANCE WITH THE SUPPLEMENTARY CODES OF FAIR COMPETITION FOR THE CONSTRUCTION INDUSTRY IN THE PERFORMANCE OF CONTRACTS ENTERED INTO PRIOR TO THE EFFECTIVE DATE OF THE PARENT CODE ARE PROPER FOR ALLOWANCE UNDER PUBLIC ACT 369.

A-83169, JANUARY 28, 1937, 16 COMP. GEN. 700

CONTRACTORS - RELIEF - INCREASED COSTS - COMPLIANCE WITH CONSTRUCTION INDUSTRY CODES OF FAIR COMPETITION THE ORIGINAL CODE OF FAIR COMPETITION FOR THE CONSTRUCTION INDUSTRY AND SUPPLEMENTAL CODES FOR CHAPTER XXII AND SUB-CHAPTERS II-B AND II-C, HAVING EXCEPTED FROM THEIR PROVISIONS ALL CONTRACTS ENTERED INTO PRIOR TO THEIR RESPECTIVE EFFECTIVE DATES, COMPLIANCE THEREWITH IN PERFORMING THE CLASS OF CONTRACTS WITH WHICH THE ACT OF JUNE 16, 1934, 48 STAT. 974, DEALS WAS NOT REQUIRED, AND INCREASED COSTS BECAUSE OF SUCH COMPLIANCE WOULD NOT BE ALLOWABLE, BUT AS TO OTHER SUPPLEMENTAL CODES IN CONNECTION WITH WHICH THERE WAS NO SUCH SPECIFIC EXCEPTION, CLAIMS FOR INCREASED COSTS UNDER SAID ACT BY REASON OF COMPLIANCE WITH SUCH CODES SHOULD BE ADMINISTRATIVELY DEVELOPED AND TRANSMITTED TO THE GENERAL ACCOUNTING OFFICE WITH ADMINISTRATIVE REPORT AND RECOMMENDATION.

ACTING COMPTROLLER GENERAL ELLIOTT TO THE SECRETARY OF THE TREASURY, JANUARY 28, 1937:

THERE HAS BEEN RECEIVED IN REFERENCE TO A CLAIM UNDER THE ACT OF JUNE 16, 1934, 48 STAT. 974, YOUR LETTER OF NOVEMBER 16, 1936, WHEREIN IT IS STATED:

* * * YOUR ATTENTION IS CALLED IN THIS CONNECTION TO THE FACT THAT ARTICLE 1 OF THE CONSTRUCTION INDUSTRY CODE OF FAIR COMPETITION PROVIDED THAT "THE PROVISIONS OF THIS CODE SHALL APPLY TO THE ENTIRE INDUSTRY * * * EXCLUDING * * * CONTRACTS ENTERED INTO PRIOR TO THE EFFECTIVE DATE.' SECTION 10 OF ARTICLE 2 OF THE CODE STATED THAT "THE TERM "THIS CODE" AS USED HEREIN SHALL MEAN AND INCLUDE * * * ALL CHAPTERS FROM TIME TO TIME INCLUDED HEREIN * * *.' THE PLUMBING CONTRACTING AND THE HEATING, PIPING, AND AIR CONDITIONING CODES CONSTITUTED CHAPTERS 10 AND 16, RESPECTIVELY, OF THE CONSTRUCTION CODE. IT WOULD THEREFORE APPEAR THAT CLAIMANT WAS NOT COMPELLED TO COMPLY WITH THE PROVISIONS OF THE SUPPLEMENTARY CODES. HOWEVER, IN VIEW OF THE FACT THAT IT DID SO COMPLY, IT IS CONSIDERED FAIR AND EQUITABLE THAT IT BE REIMBURSED THEREFOR. A CONTRARY HOLDING WOULD RESULT IN PENALIZING CLAIMANT FOR REFUSING TO TAKE ADVANTAGE OF AN EXCEPTION IN ITS FAVOR IN ORDER THAT IT MIGHT FULLY COOPERATE WITH THE NATIONAL INDUSTRIAL RECOVERY ACT AND, MORE PARTICULARLY, WITH THE CODES ESTABLISHED PURSUANT THERETO.

(IN VIEW OF THE FACT THAT THIS DEPARTMENT HAS FOR CONSIDERATION SEVERAL CLAIMS INVOLVING THIS VERY POINT, THAT IS, WHETHER INCREASED COSTS INCURRED BY REASON OF COMPLIANCE WITH THE SUPPLEMENTARY CODES OF FAIR COMPETITION FOR THE CONSTRUCTION INDUSTRY IN THE PERFORMANCE OF CONTRACTS ENTERED INTO PRIOR TO THE EFFECTIVE DATE OF THE PARENT CODE ARE PROPER FOR ALLOWANCE UNDER PUBLIC ACT 369, YOUR EARLY DECISION THEREON (PRIOR TO THE SETTLEMENT OF THE INSTANT CLAIM) IS RESPECTFULLY REQUESTED.)

TO COME WITHIN THE TERMS OF THE CITED ACT OF JUNE 16, 1934, THE CONTRACT WOULD HAVE TO BE ENTERED INTO PRIOR TO AUGUST 10, 1933, AND THE OTHER CONDITIONS OF THE STATUTE SATISFIED. THE RECORDS SHOW THAT THE CODE OF FAIR COMPETITION FOR THE CONSTRUCTION INDUSTRY, KNOWN AS CHAPTER 1, APPROVED JANUARY 31, 1934, AND EFFECTIVE MARCH 2, 1934, ESTABLISHED CERTAIN GENERAL PROVISIONS FOR THE CONSTRUCTION INDUSTRY, AS THEREIN DEFINED, WITH PROVISION FOR SUBSEQUENT INCORPORATION OF SUPPLEMENTARY CHAPTERS, WITH MORE SPECIFIC PROVISIONS FOR THE SEVERAL FUNCTIONAL DIVISIONS OF THE INDUSTRY.

THE ORIGINAL CODE, CHAPTER I, PROVIDED IN PART UNDER ARTICLE I AS FOLLOWS:

THE PROVISIONS OF THIS CODE SHALL APPLY TO THE ENTIRE INDUSTRY AS HEREINAFTER DEFINED, EXCLUDING OPERATIONS THEREIN UNDERTAKEN IN ACCORDANCE WITH BONA FIDE BIDS MADE NOT MORE THAN SIXTY (60) DAYS PRIOR TO THE EFFECTIVE DATE, OR CONTRACTS ENTERED INTO PRIOR TO THE EFFECTIVE DATE; * *

THIS PROVISION IS CLEAR AND UNAMBIGUOUS; IT NEEDS NO INTERPRETATION OR ELABORATION. THE CODE CLEARLY EXPRESSLY EXCEPTS FROM ITS PROVISIONS ALL CONTRACTS ENTERED INTO PRIOR TO ITS EFFECTIVE DATE, WHICH OF COURSE INCLUDES THAT CLASS OF CONTRACTS AS TO WHICH THE ACT OF JUNE 16, 1934, AUTHORIZES RELIEF. OBVIOUSLY, THEREFORE, THERE CAN BE NO ALLOWABLE INCREASED COST AS A RESULT OF COMPLYING WITH THE ORIGINAL CONSTRUCTION CODE.

THE CONSTRUCTION CODE, CHAPTER I, ALSO PROVIDED UNDER ARTICLE II, SECTION 10, AS FOLLOWS:

SEC. 10. THE TERM "THIS CODE" AS USED HEREIN SHALL MEAN AND INCLUDE, UNLESS THE CONTEXT CLEARLY INDICATES OTHERWISE, ALL CHAPTERS FROM TIME TO TIME INCLUDED HEREIN, TOGETHER WITH ANY MODIFICATIONS OR AMENDMENTS THERETO.

IT WAS FURTHER PROVIDED, IN PART, UNDER CHAPTER I, ARTICLE VIII, SECTION 5, IN CONNECTION WITH ADDITIONAL CHAPTERS OF THE CODE, AS FOLLOWS:

UPON APPROVAL BY THE PRESIDENT, SUCH CHAPTER SHALL BECOME AN INTEGRAL PART OF THIS CODE THE SAME AS IF ORIGINALLY INCLUDED HEREIN, BUT ANY EXCEPTIONS THEREIN TO THE GENERAL PROVISIONS OF THIS CODE SHALL APPLY ONLY TO THE MEMBERS OF THE DIVISION, OR SUBDIVISIONS OF THE INDUSTRY TO WHICH SUCH CHAPTER PERTAINS.

IT APPEARS THEREFORE THAT, UPON APPROVAL BY THE PRESIDENT, ADDITIONAL CHAPTERS OF THE CONSTRUCTION CODE WERE INCORPORATED IN THE ORIGINAL CODE AND MADE A PART THEREOF AND THAT THE PROVISIONS OF THE GENERAL CODE, CHAPTER I, WERE APPLICABLE TO SUCH ADDITIONAL CHAPTERS IN THE ABSENCE OF CONFLICT AS TO ANY OF THE PROVISIONS. IT IS NECESSARY TO DETERMINE THEREFORE WHETHER THE SUPPLEMENTARY CODES FOR THE CHAPTERS SUBSEQUENTLY ADDED CONFLICTED WITH THE ORIGINAL CODE, CHAPTER I, INSOFAR AS CONCERNS THE APPLICATION OF THE PROVISIONS THEREOF TO CONTRACTS ENTERED INTO PRIOR TO THE EFFECTIVE DATE OF THE ORIGINAL CODE.

SUPPLEMENT NO. 1 TO THE CONSTRUCTION CODE WHICH SET UP A CODE FOR CHAPTER II COVERING THE GENERAL CONTRACTORS' DIVISION OF THE CONSTRUCTION INDUSTRY, APPROVED FEBRUARY 17, 1934, AND EFFECTIVE ON THE THIRTIETH DAY THEREAFTER. NO MENTION IS MADE THEREIN AS TO ITS APPLICATION TO CONTRACTS ENTERED INTO PRIOR TO THE EFFECTIVE DATE OF THE PARENT CODE. IN THIS RESPECT IT DOES NOT THEREFORE APPEAR TO CONFLICT WITH THE PARENT CODE. ARTICLE VI OF THE CODE FOR CHAPTER II DOES, HOWEVER, MAKE REFERENCE TO THE ORIGINAL CODE, CHAPTER I, AS FOLLOWS:

THE MANDATORY PROVISIONS REQUIRED BY THE ACT, AND ALL OTHER OF THE PROVISIONS CONTAINED IN CHAPTER I OF THIS CODE (APPROVED JANUARY 31, 1934) EXCEPT AS OTHERWISE PROVIDED IN THIS CHAPTER II, APPLY WITH LIKE FORCE AND EFFECT WITHIN THIS DIVISION OF THE CONSTRUCTION INDUSTRY, AS IF INCORPORATED HEREIN.

SIMILAR PROVISIONS APPEAR IN ALL OF THE SUPPLEMENTARY CODES FOR THE ADDITIONAL CHAPTERS INCLUDED IN THE CONSTRUCTION CODE. NONE OF THE SUPPLEMENTARY CODES FOR THE ADDITIONAL CHAPTERS INCLUDED IN THE PARENT CODE MENTION THEIR APPLICATION TO EXISTING CONTRACTS WITH THE EXCEPTION OF THOSE FOR CHAPTER XXII AND SUBCHAPTERS II-B AND II-C WHICH SPECIFICALLY EXCLUDE CONTRACTS ENTERED INTO OR OPERATIONS UNDERTAKEN PRIOR TO THE EFFECTIVE DATE OF THE RESPECTIVE SUPPLEMENTARY CODES. THESE LATTER SPECIFIC EXCLUSIONS DO NOT APPEAR SUFFICIENT TO JUSTIFY A CONCLUSION THAT IN THE ABSENCE OF SUCH SPECIFIC EXCLUSION NO CONTRACTS OR OPERATIONS ARE EXCLUDED. OBVIOUSLY, INSOFAR AS CHAPTER XXII AND SUBCHAPTERS II-B AND II- C ARE CONCERNED, COMPLIANCE THEREWITH IN PERFORMING THE CLASS OF CONTRACTS WITH WHICH THE ACT OF JUNE 16, 1934, DEALS WAS NOT REQUIRED AND INCREASED COSTS WOULD NOT BE ALLOWABLE. NOR IS IT BELIEVED, IN VIEW OF THE PROVISIONS HEREINBEFORE CITED, THAT COMPLIANCE WITH THE SUPPLEMENTARY CODES FOR THE OTHER CHAPTERS WAS REQUIRED IN THE PERFORMANCE OF CONTRACTS ENTERED INTO PRIOR TO THE EFFECTIVE DATE OF THE ORIGINAL CODE.

SINCE THE ORIGINAL CODE EXCLUDED CONTRACTS ENTERED INTO PRIOR TO ITS EFFECTIVE DATE, THERE APPEARS NO REASON WHY THOSE PARTIES WHO SPONSORED THAT CODE, AND WERE SUBJECT THERETO, WOULD INCLUDE ALL CONTRACTS IN THE SUPPLEMENTARY CODES THEREAFTER APPROVED. IN THIS CONNECTION ATTENTION IS INVITED TO THE FACT THAT CHAPTER II FOR THE GENERAL CONTRACTORS' DIVISION WAS APPROVED ON FEBRUARY 17, 1934. IT IS ESPECIALLY UNLIKELY THAT THIS SUPPLEMENTARY CODE WOULD INCLUDE ALL CONTRACTS SINCE THE GENERAL CODE, APPROVED BUT SEVENTEEN DAYS PRIOR THERETO, EXCLUDED CONTRACTS ENTERED INTO PRIOR TO MARCH 2, 1934. WHILE OTHER SUPPLEMENTARY CODES WERE APPROVED AT A MUCH LATER DATE THE LANGUAGE USED THEREIN IS ALMOST IDENTICAL WITH THAT USED IN CHAPTER II INSOFAR AS THE APPLICATION OF THE PROVISIONS OF CHAPTER I IS CONCERNED, WITH THE EXCEPTION OF THE ONE CHAPTER AND TWO SUBCHAPTERS MENTIONED ABOVE.

THAT IS TO SAY, THE CODE OF FAIR COMPETITION FOR THE CONSTRUCTION INDUSTRY AS APPROVED AND ITS SEVERAL CHAPTERS AS AFTERWARDS APPROVED DID NOT REQUIRE COMPLIANCE ON THE PART OF CONTRACTORS WITH SUCH CODES AS TO CONTRACTS ENTERED INTO PRIOR TO THE EFFECTIVE DATE THEREOF OR OPERATIONS UNDERTAKEN IN ACCORDANCE WITH BONA FIDE BIDS MADE MORE THAN 60 DAYS PRIOR TO SUCH EFFECTIVE DATE. HOWEVER, IN THOSE INSTANCES WHERE THE CONTRACTORS OR SUBCONTRACTORS WERE AT THAT TIME COMPLYING WITH THE PRESIDENT'S REEMPLOYMENT AGREEMENT AND THE CLAIM IS FOR INCREASED COSTS BY REASON OF SUCH COMPLIANCE UNDER THE ACT OF JUNE 16, 1934, SUCH CLAIM SHOULD BE ADMINISTRATIVELY DEVELOPED AND SUBMITTED TO THIS OFFICE WITH ADMINISTRATIVE REPORT AND RECOMMENDATION WITH RESPECT TO THE INCREASED COSTS RESULTING FROM COMPLIANCE WITH THE PRESIDENT'S REEMPLOYMENT AGREEMENT.