A-86908, JULY 15, 1937, 17 COMP. GEN. 37

A-86908: Jul 15, 1937

Additional Materials:

Contact:

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

 

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

ADVERTISING - BIDS - NONCOMPLIANCE WITH LABOR RELATIONS ACT THERE IS NO AUTHORITY FOR REJECTING BIDS MERELY BECAUSE OF BIDDERS' NONCOMPLIANCE WITH THE REQUIREMENTS OF THE NATIONAL LABOR RELATIONS ACT OF JULY 5. 1937: THERE WAS RECEIVED YOUR LETTER OF JUNE 10. THREE BIDS WERE SUBMITTED. OF WHICH THE LOWEST WAS SUBMITTED BY REMINGTON RAND. HAD ENGAGED IN AND WAS ENGAGING IN UNFAIR LABOR PRACTICES WITHIN THE MEANING OF SECTION 8. HAD ENGAGED INAND WAS ENGAGING IN UNFAIR LABOR PRACTICES WITHIN THE MEANING OF SECTION 8. HAD ENGAGED IN AND WAS ENGAGING IN UNFAIR LABOR PRACTICES WITHIN THE MEANING OF SECTION 8. HAD ENGAGED IN AND WAS ENGAGING IN UNFAIR LABOR PRACTICES WITHIN THE MEANING OF SECTION 8.

A-86908, JULY 15, 1937, 17 COMP. GEN. 37

ADVERTISING - BIDS - NONCOMPLIANCE WITH LABOR RELATIONS ACT THERE IS NO AUTHORITY FOR REJECTING BIDS MERELY BECAUSE OF BIDDERS' NONCOMPLIANCE WITH THE REQUIREMENTS OF THE NATIONAL LABOR RELATIONS ACT OF JULY 5, 1935 (49 STAT. 449), OR FOR THE INCLUSION IN ADVERTISED SPECIFICATIONS OR CONTRACTS OF A REQUIREMENT OF COMPLIANCE WITH THE SAID ACT WITH RIGHT RESERVED TO REJECT ALL BIDS OR CANCEL CONTRACTS UPON FAILURE OF SUCH COMPLIANCE.

ACTING COMPTROLLER GENERAL ELLIOTT TO THE EXECUTIVE DIRECTOR, SOCIAL SECURITY BOARD, JULY 15, 1937:

THERE WAS RECEIVED YOUR LETTER OF JUNE 10, 1937 (FILE NO. TIE:16), AS FOLLOWS:

ON MAY 25, 1937, THE PROCUREMENT DIVISION OF THE TREASURY DEPARTMENT, ACTING ON BEHALF OF THE SOCIAL SECURITY BOARD, SUBMITTED INVITATIONS TO BID ON A CONTRACT TO MAKE PHOTOGRAPHIC REPRODUCTIONS OF CERTAIN OFFICE RECORD CARDS OF THE SOCIAL SECURITY BOARD, KNOWN AS FORMS OA-702 (INVITATION NO. 9171-SP-6-7). THE INVITATION TO BID STIPULATES THAT THE PHOTOGRAPHING OF THESE CARDS MUST BE DONE ON THE PREMISES OF THE SOCIAL SECURITY BOARD IN BALTIMORE, MARYLAND. THREE BIDS WERE SUBMITTED, OF WHICH THE LOWEST WAS SUBMITTED BY REMINGTON RAND, INC.

ON MARCH 13, 1937, THE NATIONAL LABOR RELATIONS BOARD ISSUED A DECISION FINDING THAT REMINGTON-RAND, INC., BY REFUSING AND CONTINUING TO REFUSE TO BARGAIN COLLECTIVELY WITH REMINGTON-RAND JOINT PROTECTIVE BOARD OF THE DISTRICT COUNCIL OFFICE EQUIPMENT WORKERS AS THE EXCLUSIVE REPRESENTATIVE OF THE EMPLOYEES IN AN APPROPRIATE UNIT, HAD ENGAGED IN AND WAS ENGAGING IN UNFAIR LABOR PRACTICES WITHIN THE MEANING OF SECTION 8, SUBDIVISION 5, OF THE NATIONAL LABOR RELATIONS ACT; THAT THE COMPANY, BY ITS DOMINATION AND INTERFERENCE WITH THE FORMATION AND ADMINISTRATION OF CERTAIN ASSOCIATIONS OF ITS EMPLOYEES AND BY ITS CONTRIBUTIONS OF FINANCIAL AND OTHER SUPPORT THERETO, HAD ENGAGED INAND WAS ENGAGING IN UNFAIR LABOR PRACTICES WITHIN THE MEANING OF SECTION 8, SUBDIVISION 2, OF THE NATIONAL LABOR RELATIONS ACT; THAT THE COMPANY, BY DISCRIMINATION IN REGARD TO THE HIRE AND TENURE OF EMPLOYMENT OF CERTAIN ENUMERATED EMPLOYEES, HAD ENGAGED IN AND WAS ENGAGING IN UNFAIR LABOR PRACTICES WITHIN THE MEANING OF SECTION 8, SUBDIVISION 3, OF THE NATIONAL LABOR RELATIONS ACT; THAT THE COMPANY, BY ITS ACTIVITIES TO DEFEAT A STRIKE OF ITS EMPLOYEES, INCLUDING ITS EMPLOYMENT OF STRIKEBREAKING AGENCIES, ITS USE OF SPIES, "MISSIONARIES," AND ARMED GUARDS, ITS THREAT TO MOVE ITS VARIOUS PLANTS, ITS ATTEMPTS TO TURN CIVIL AUTHORITIES AND BUSINESS AND OTHER INTERESTS IN THE VARIOUS CITIES INVOLVED IN THE STRIKE AGAINST THE BARGAINING, ITS INTENSIVE PUBLICITY AND PROPAGANDA CAMPAIGN BASED ON DELIBERATE FALSEHOODS, ITS USE OF AGENCIES TO COMMIT ACTS OF DISORDER AND PROVOKE OTHERS TO COMMIT SUCH ACTS, AND BY VARIOUS OTHER ACTS DESCRIBED IN THE DECISION, HAD INTERFERED WITH, RESTRAINED, AND COERCED ITS EMPLOYEES IN THE EXERCISE OF RIGHTS GUARANTEED IN SECTION 7 OF THE NATIONAL LABOR RELATIONS ACT, AND HAD ENGAGED IN AND WAS ENGAGING IN UNFAIR LABOR PRACTICES WITHIN THE MEANING OF SECTION 8, SUBDIVISION 1, OF THE NATIONAL LABOR RELATIONS ACT. (IN THE MATTER OF REMINGTON-RAND, INC., AND REMINGTON-RAND JOINT PROTECTIVE BOARD OF THE DISTRICT COUNCIL OFFICE EQUIPMENT WORKERS, CASE NO. C-145). THE NATIONAL LABOR RELATIONS BOARD LIKEWISE ISSUED AN ORDER REQUIRING REMINGTON-RAND, INC., TO CEASE AND DESIST FROM THE FOREGOING UNFAIR LABOR PRACTICES AND TO TAKE CERTAIN AFFIRMATIVE ACTION. (IBID.)

WE ARE ADVISED BY THE NATIONAL LABOR RELATIONS BOARD THAT REMINGTON RAND, INC., IS NOT COMPLYING WITH THE ABOVE ORDER AND THAT THE NATIONAL LABOR RELATIONS BOARD HAS INSTITUTED PROCEEDINGS IN THE CIRCUIT COURT OF APPEALS FOR THE SECOND CIRCUIT TO COMPEL REMINGTON RAND, NC., TO COMPLY THEREWITH.

IT IS THE POLICY OF THE SOCIAL SECURITY BOARD THAT, SO FAR AS THE LAW ALLOWS, THE BOARD WILL NOT MAKE PURCHASES FROM OR AWARD CONTRACTS TO INDIVIDUALS OR FIRMS WHO ARE ENGAGING IN UNFAIR LABOR PRACTICES IN VIOLATION OF THE NATIONAL LABOR RELATIONS ACT OR ARE NOT COMPLYING WITH ORDERS ISSUED BY THE NATIONAL LABOR RELATIONS BOARD.

WE THEREFORE RESPECTFULLY REQUEST YOUR OPINION UPON THE FOLLOWING QUESTIONS:

1. MAY THE SOCIAL SECURITY BOARD LAWFULLY REJECT THE BID OF REMINGTON- RAND, INC., AND ACCEPT THE NEXT LOWEST BID ON THE GROUND THAT REMINGTON- RAND, INC., BY REASON OF THE FACT THAT IT IS ENGAGING IN UNFAIR LABOR PRACTICES WHICH HAVE LED AND ARE LIKELY TO LEAD TO INDUSTRIAL UNREST, IS NOT THE LOWEST RESPONSIBLE BIDDER?

2. MAY THE SOCIAL SECURITY BOARD, AFTER WITHDRAWING PRESENT INVITATIONS TO BID, (A) SUBMIT NEW INVITATIONS IN WHICH IT IS STIPULATED THAT NO BID WILL BE CONSIDERED OR ACCEPTED UNLESS ACCOMPANIED BY A CERTIFICATE OF THE BIDDER THAT HE IS COMPLYING WITH AND WILL CONTINUE TO COMPLY WITH THE NATIONAL LABOR RELATIONS ACT; (B) REFUSE TO CONSIDER OR ACCEPT BIDS NOT COMPLYING WITH SUCH REQUIREMENT; AND (C) INSERT A PROVISION IN THE CONTRACT REQUIRING COMPLIANCE WITH THE NATIONAL LABOR RELATIONS ACT AND GIVING THE SOCIAL SECURITY BOARD THE RIGHT TO CANCEL THE CONTRACT FOR FAILURE TO COMPLY WITH SUCH ACT AND, IN THE EVENT OF SUCH CANCELLATION, TO MAKE OPEN MARKET PURCHASES OR HAVE THE WORK OTHERWISE PERFORMED AT THE EXPENSE OF THE CONTRACTOR?

ATTACHED HERETO IS A MEMORANDUM PREPARED BY OUR GENERAL COUNSEL SUMMARIZING THE LAW WHICH, IN OUR OPINION, INDICATES THAT AN AFFIRMATIVE ANSWER SHOULD BE MADE TO THE FOREGOING QUESTIONS.

SECTION 8 OF THE ACT OF JULY 5, 1935, 49 STAT. 452, DEFINES UNFAIR LABOR PRACTICES. UNDER SECTION 10 OF THE ACT THE NATIONAL LABOR RELATIONS BOARD IS EMPOWERED TO PREVENT THE DESCRIBED UNFAIR LABOR PRACTICES AND THE ACT PRESCRIBES THE PROCEDURE TO THAT END. THE BOARD IS AUTHORIZED TO PETITION DESIGNATED COURTS TO SECURE THE ENFORCEMENT OF ITS ORDERS; SUBSECTION (E) OF SECTION 10 PROVIDING, IN PERTINENT PART, AS FOLLOWS:

THE BOARD SHALL HAVE POWER TO PETITION ANY CIRCUIT COURT OF APPEALS OF THE UNITED STATES (INCLUDING THE COURT OF APPEALS OF THE DISTRICT OF COLUMBIA), OR IF ALL THE CIRCUIT COURTS OF APPEALS TO WHICH APPLICATION MAY BE MADE ARE IN VACATION, ANY DISTRICT COURT OF THE UNITED STATES (INCLUDING THE SUPREME COURT OF THE DISTRICT OF COLUMBIA), WITHIN ANY CIRCUIT OR DISTRICT, RESPECTIVELY, WHEREIN THE UNFAIR LABOR PRACTICE IN QUESTION OCCURRED OR WHEREIN SUCH PERSON RESIDES OR TRANSACTS BUSINESS, FOR THE ENFORCEMENT OF SUCH ORDER AND FOR APPROPRIATE TEMPORARY RELIEF OR RESTRAINING ORDER, AND SHALL CERTIFY AND FILE IN THE COURT A TRANSCRIPT OF THE ENTIRE RECORD IN THE PROCEEDING, INCLUDING THE PLEADINGS AND TESTIMONY UPON WHICH SUCH ORDER WAS ENTERED AND THE FINDINGS AND ORDER OF THE BOARD. UPON SUCH FILING THE COURT SHALL CAUSE NOTICE THEREOF TO BE SERVED UPON SUCH PERSON, AND THEREUPON SHALL HAVE JURISDICTION OF THE PROCEEDING AND OF THE QUESTION DETERMINED THEREIN, AND SHALL HAVE POWER TO GRANT SUCH TEMPORARY RELIEF OR RESTRAINING ORDER AS IT DEEMS JUST AND PROPER, AND TO MAKE AND ENTER UPON THE PLEADINGS, TESTIMONY, AND PROCEEDINGS SET FORTH IN SUCH TRANSCRIPT A DECREE ENFORCING, MODIFYING, AND ENFORCING AS SO MODIFIED, OR SETTING ASIDE IN WHOLE OR IN PART THE ORDER OF THE BOARD.

SUBSECTION (F) OF SAID SECTION PROVIDES THAT ANY PERSON AGGRIEVED BY A FINAL ORDER OF THE BOARD MAY OBTAIN A REVIEW IN THE DESIGNATED COURTS WITH THE SAME PROCEDURE AS IN THE CASE OF APPLICATION BY THE BOARD FOR THE ENFORCEMENT OF ITS ORDER. THE CONSTITUTIONALITY OF THE ACT OF JULY 5, 1935, WAS SUSTAINED BY THE SUPREME COURT OF THE UNITED STATES IN A DECISION DATED APRIL 12, 1937, IN NATIONAL LABOR RELATIONS BOARD V. JONES AND LAUGHLIN STEEL CORPORATION, NO. 419, AND IN OTHER CASES DECIDED THE SAME DAY.

YOU STATE THAT THE NATIONAL LABOR RELATIONS BOARD HAS ISSUED A DECISION FINDING THAT REMINGTON-RAND, INC., HAD ENGAGED IN AND WAS ENGAGING IN UNFAIR LABOR PRACTICES WITHIN THE MEANING OF SECTION 8 OF THE ACT, AND THAT THE BOARD HAS ISSUED AN ORDER REQUIRING SAID CORPORATION TO CEASE AND DESIST FROM SUCH UNFAIR LABOR PRACTICES. YOU FURTHER STATE THAT THE CORPORATION IS NOT COMPLYING WITH THE ORDER AND THAT THE BOARD HAS INSTITUTED PROCEEDINGS IN THE PROPER COURT TO COMPEL COMPLIANCE THEREWITH. IT IS ON THE BASIS OF SUCH VIOLATION THAT YOU NOW QUESTION WHETHER THE CORPORATION MAY BE CONSIDERED THE LOWEST RESPONSIBLE BIDDER AND, IF NOT, WHETHER CERTAIN REQUIREMENTS WITH RESPECT TO COMPLIANCE WITH THE ACT SHOULD BE INCLUDED IN THE INVITATION FOR BIDS UPON READVERTISEMENT. IT IS ASSUMED THAT THE COURT HAS NOT FINALLY RULED ON THE PETITION OF THE BOARD AND IT IS NOT TO BE PRESUMED THAT THE CORPORATION WILL NOT ABIDE BY THE RULING OF THE COURT SHOULD SUCH RULING SUSTAIN THE FINDING OF THE BOARD IN THE MATTER. BUT BE THAT AS IT MAY, NEITHER THE FINDINGS OF THE BOARD NOR THE ULTIMATE COURT ACTION WITH RESPECT THERETO CAN HAVE ANY BEARING ON THE QUESTIONS HERE FOR CONSIDERATION.

WHILE AS STATED IN THE MEMORANDUM OF YOUR GENERAL COUNSEL, THE CONGRESS HAS, IN THE STATUTES THEREIN REFERRED TO, ENACTED CERTAIN REQUIREMENTS WITH RESPECT TO GOVERNMENT CONTRACTS, NO SUCH REQUIREMENTS ARE FOUND IN THE NATIONAL LABOR RELATIONS ACT. THE CONGRESS HAS PROVIDED THE MEANS OF ENFORCING COMPLIANCE WITH THE REQUIREMENTS OF SAID ACT, BUT THE WITHHOLDING OF GOVERNMENT CONTRACTS FROM A VIOLATOR OF SUCH REQUIREMENTS IS NOT ONE OF THE MEANS SO PROVIDED.

THERE IS NOTHING IN THE SOCIAL SECURITY ACT TO REQUIRE THAT PERSONS OR FIRMS BIDDING ON GOVERNMENT BUSINESS SHALL CERTIFY OR OTHERWISE AFFIRMATIVELY SIGNIFY THAT THEY ARE COMPLYING WITH AND WILL CONTINUE TO COMPLY WITH THE NATIONAL LABOR RELATIONS ACT. AND THE FACT THAT A BIDDER WHO SUBMITS A BID HAS PREVIOUSLY VIOLATED SAID ACT IS NOT FOR CONSIDERATION BY THE PURCHASING OR CONTRACTING OFFICER IN THE ENFORCING COMPLIANCE WITH THE NATIONAL LABOR RELATIONS ACT IS PLACED BY THE ACT IN THE NATIONAL LABOR RELATIONS BOARD AND THE COURTS.