A-87953, JULY 29, 1938, 18 COMP. GEN. 102

A-87953: Jul 29, 1938

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COMMODITIES TO BE PERISHABLE WHICH REGULATIONS PROMULGATED PURSUANT TO AUTHORITY OF LAW HAVE SPECIFICALLY DECLARED TO BE NOT PERISHABLE. OF THE CONTRACT EXAMINING SECTION OF THIS OFFICE TO THE QUARTERMASTER GENERAL WAS REPLIED TO JUNE 22. THESE CONTRACTS WERE BOTH IN AN AMOUNT WHICH EXCEEDED $10. IT IS CONTENDED IN THE INDORSEMENT OF JUNE 22. THAT THESE PURCHASE ARRANGEMENTS AND AGREEMENTS WERE WITHIN THE EXEMPTION TERMS OF SECTION 9 OF THE WALSH-HEALEY ACT IN THAT PERISHABLES WERE INVOLVED. WHICH PROVIDED IN ARTICLE 2 THEREOF THAT: INCLUSION OF THE STIPULATIONS HEREIN ENUMERATED IS NOT REQUIRED IN THE FOLLOWING INSTANCES: (B) WHERE THE CONTRACT RELATES TO PERISHABLES. OF THE NUMEROUS ARTICLES LISTED UNDER CONTRACT W-5916-QM-ECW-149 THE ONLY ONES WHICH APPEAR TO HAVE BEEN POSSIBLE FOR CLASSIFICATION AS PERISHABLES WERE EVAPORATED PRUNES AND APRICOTS (TOTAL CONTRACT PRICE $357.20).

A-87953, JULY 29, 1938, 18 COMP. GEN. 102

CONTRACTS - LABOR, ETC., STIPULATIONS OF WALSH-HEALEY ACT - PERISHABLE ITEMS DETERMINATIONS CONTRACTING OFFICERS MAY NOT DETERMINE IN CONNECTION WITH GOVERNMENT PURCHASES, AND FOR PURPOSES OF WALSH-HEALEY ACT, 49 STAT. 2036, LABOR STIPULATION CONTRACT INCLUSION DETERMINATIONS, COMMODITIES TO BE PERISHABLE WHICH REGULATIONS PROMULGATED PURSUANT TO AUTHORITY OF LAW HAVE SPECIFICALLY DECLARED TO BE NOT PERISHABLE, NOR CAN IT BE SAID THAT WHEN A PURCHASE CONSISTS PARTLY OF PERISHABLE ITEMS THAT THE ENTIRE CONTRACT COMES WITHIN THE EXEMPTIONS TO THE STIPULATIONS OF THE ACT, PARTICULARLY WHERE THE DEPARTMENT CONCERNED HAS REQUIRED THAT INVITATIONS FOR BIDS FOR PERISHABLES AND CONTRACTS BASED THEREON SHOULD BE CONFINED TO SUCH PRODUCTS, EXCLUDING THEREFROM EXEMPT SUPPLIES AND MATERIALS.

ACTING COMPTROLLER GENERAL ELLIOTT TO THE SECRETARY OF WAR, JULY 29, 1938:

A LETTER OF JUNE 7, 1937, OF THE CONTRACT EXAMINING SECTION OF THIS OFFICE TO THE QUARTERMASTER GENERAL WAS REPLIED TO JUNE 22, 1937, RELATIVE TO THE FAILURE TO INSERT STIPULATIONS REQUIRED BY REGULATIONS NO. 504 OF THE DEPARTMENT OF LABOR, DATED SEPTEMBER 14, 1936--- CONCERNING THE WALSH- HEALEY ACT, 49 STAT. 2036--- IN CONTRACTS W-5916 QM-ECW-149 OF JANUARY 15, 1937, AND W-5916-QM-ECW-181 OF MARCH 16, 1937, AS WELL AS IN THE INVITATIONS WHICH PRECEDED THESE CONTRACTS.

THESE CONTRACTS WERE BOTH IN AN AMOUNT WHICH EXCEEDED $10,000, BUT IT IS CONTENDED IN THE INDORSEMENT OF JUNE 22, 1937, THAT THESE PURCHASE ARRANGEMENTS AND AGREEMENTS WERE WITHIN THE EXEMPTION TERMS OF SECTION 9 OF THE WALSH-HEALEY ACT IN THAT PERISHABLES WERE INVOLVED. SECTION 9 OF THIS ACT PROVIDES THAT:

THIS ACT SHALL NOT APPLY TO PURCHASES OF SUCH MATERIALS, SUPPLIES, ARTICLES, OR EQUIPMENT AS MAY USUALLY BE BOUGHT IN THE OPEN MARKET; NOR SHALL THIS ACT APPLY TO PERISHABLES, INCLUDING DAIRY, LIVESTOCK, AND NURSERY PRODUCTS, OR TO AGRICULTURAL OR FARM PRODUCTS PROCESSED FOR FIRST SALE BY THE ORIGINAL PRODUCERS; * * *.

THE SECRETARY OF LABOR ISSUED DEPARTMENT OF LABOR REGULATIONS NO. 504 ON SEPTEMBER 14, 1936, WHICH PROVIDED IN ARTICLE 2 THEREOF THAT:

INCLUSION OF THE STIPULATIONS HEREIN ENUMERATED IS NOT REQUIRED IN THE FOLLOWING INSTANCES:

(B) WHERE THE CONTRACT RELATES TO PERISHABLES, INCLUDING DAIRY, LIVESTOCK, AND NURSERY PRODUCTS; ("PERISHABLES" COVER PRODUCTS SUBJECT TO DECAY OR SPOILAGE AND NOT PRODUCTS CANNED, SALTED, SMOKED, OR OTHERWISE PRESERVED).

BOTH OF THE CONTRACTS HERE IN QUESTION INVOLVED FOR THE MOST PART CANNED GOODS OR MERCHANDISE OTHERWISE PRESERVED, SUCH AS RAISINS, ROLLED OATS, RICE, DRIED BEANS, ETC. AS A MATTER OF FACT, OF THE NUMEROUS ARTICLES LISTED UNDER CONTRACT W-5916-QM-ECW-149 THE ONLY ONES WHICH APPEAR TO HAVE BEEN POSSIBLE FOR CLASSIFICATION AS PERISHABLES WERE EVAPORATED PRUNES AND APRICOTS (TOTAL CONTRACT PRICE $357.20), AND THE ONLY SUCH PERISHABLE ARTICLE UNDER CONTRACT W-5916-QM-ECW-181 WAS EVAPORATED PRUNES (TOTAL CONTRACT PRICE $54). THESE ITEMS WERE CLASSIFIED AS PERISHABLES IN SECTION 13 (3) (C) OF RULINGS AND INTERPRETATIONS ISSUED BY THE DEPARTMENT OF LABOR ON JULY 6, 1937.

IT IS WELL SETTLED THAT REGULATIONS PROMULGATED PURSUANT TO AUTHORITY OF LAW AND WHICH ARE NOT IN CONFLICT WITH EXPRESS STATUTORY PROVISIONS HAVE THE FORCE AND EFFECT OF LAW. MARYLAND CASUALTY COMPANY V. UNITED STATES, 251 U.S. 342, 349. IT FOLLOWS, THEREFORE, THAT THE REGULATIONS OF THE SECRETARY OF LABOR SPECIFICALLY STIPULATING THAT CANNED GOODS, ETC., SHOULD NOT BE REGARDED AS WITHIN AN EXEMPT CLASSIFICATION WAS AS MUCH A PART OF THE LAW AS THOUGH WRITTEN INTO THE ACT BY CONGRESS. THE CONTENTION IS ADVANCED IN THE QUARTERMASTER GENERAL'S INDORSEMENT OF JUNE 22, 1937, THAT "THE CONTRACTING OFFICER IS THE FINAL JUDGE AS TO WHETHER OR NOT THE COMMODITY FOR WHICH HE PROPOSES TO ADVERTISE FOR BIDS IS A PERISHABLE ARTICLE AND THE PURCHASE IS EXEMPT FROM THE STATUTORY PROVISION REFERRED TO.' IT APPEARS THAT UNDER SECTION 13 (3) (C) IN THE RULINGS AND INTERPRETATIONS OF JULY 6, 1937, MENTIONED ABOVE, IT WAS STIPULATED THAT IN CALLING FOR BIDS FOR MEATS OR OTHER FOOD PRODUCTS THE CONTRACTING OFFICER SHOULD BE GUIDED BY AN ADVISORY OPINION OF THE PROVISIONS COMMITTEE OF THE FEDERAL SPECIFICATIONS EXECUTIVE COMMITTEE, AND THERE WAS LISTED IN THIS SUBSECTION ITEMS WHICH THE COMMITTEE HAD AT THAT TIME CLASSIFIED AS PERISHABLES. BY WAY OF EXPLANATION, HOWEVER, IT WAS STATED:

* * * THIS LIST OF COMMODITIES, HOWEVER, IS NOT INTENDED TO BE A COMPLETE LIST OF PERISHABLE ITEMS, FOR THERE ARE MANY ITEMS PURCHASED BY THE GOVERNMENT WHICH WERE NOT CONSIDERED BY THE COMMITTEE. THE CONTRACTING OFFICER SHOULD DECIDE WHETHER OR NOT A COMMODITY IS A PERISHABLE BEFORE PUBLISHING HIS INVITATION FOR BIDS. IF HE DECIDES THAT THE COMMODITY IS A PERISHABLE HE WILL OMIT THE STIPULATIONS REQUIRED IN CONTRACTS SUBJECT TO THE ACT. * * *

BUT OBVIOUSLY THIS DID NOT MEAN THAT THE CONTRACTING OFFICER COULD DETERMINE A COMMODITY TO BE PERISHABLE WHICH REGULATIONS OF THE SECRETARY OF LABOR SPECIFICALLY SAID WAS NOT PERISHABLE. IN OTHER WORDS, IT DID NOT, AND COULD NOT, GIVE THE CONTRACTING OFFICER LEGISLATIVE AUTHORITY TO CHANGE THE LAW. THE CONCLUSION SEEMS INESCAPABLE THAT THE GREAT MAJORITY OF THE ITEMS PURCHASED UNDER THESE CONTRACTS WAS PROPERLY WITHIN THE TERMS OF THE WALSH-HEALEY ACT AND COULD NOT BE EXCLUDED THEREFROM BY FIAT OF THE CONTRACTING OFFICER.

NOR CAN IT BE SAID THAT WHEN A PURCHASE CONSISTS PARTLY OF PERISHABLE ITEMS THAT THE ENTIRE CONTRACT COMES WITHIN THE EXEMPTION. IT WAS SPECIFICALLY PROVIDED IN SECTION 4 (B) OF PROCUREMENT CIRCULAR NO. 17, WAR DEPARTMENT, OCTOBER 1, 1936, THAT INVITATIONS ON BIDS FOR PERISHABLES AND CONTRACTS BASED THEREON SHOULD BE CONFINED TO SUCH PRODUCTS, EXCLUDING THEREFROM ALL SUPPLIES AND MATERIALS SUBJECT TO THE STIPULATIONS OF THE ACT.

IN VIEW OF THE FACT THAT THERE IS INVOLVED THE QUESTION OF THE PROPER USE OF APPROPRIATED MONEY, AND IN VIEW OF THE FURTHER FACT THAT ACCURATE ADMINISTRATION OF THE ACT IS ESSENTIAL TO THE PROPER PERFORMANCE BY THIS OFFICE OF DUTIES ASSIGNED TO IT BY SECTION 3 THEREOF, I HAVE TO ASK THAT ADMINISTRATIVE ACTION BE TAKEN TO ASSURE IN THE FUTURE FULL ADHERENCE TO THE TERMS OF THE STATUTE.