B-11020, JULY 11, 1940, 20 COMP. GEN. 18

B-11020: Jul 11, 1940

Additional Materials:

Contact:

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

 

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

CONTRACTS - WAGE STIPULATIONS AND PRICE INCREASING PROVISIONS IN THE ABSENCE OF EXPRESS STATUTORY PROVISION THERE IS NO AUTHORITY TO INCLUDE IN CONTRACTS OF THE UNITED STATES ANY PROVISION NOT ESSENTIAL TO THE ACCOMPLISHMENT OF THE PURPOSE OF THE APPROPRIATION UNDER WHICH THE CONTRACT IS MADE. HENCE ARE NOT SUBJECT TO THE MINIMUM WAGE PROVISIONS OF THE BACON-DAVIS ACT AS AMENDED AUGUST 30. ARE FOR DETERMINATION BY THE SECRETARY OF LABOR AS REQUIRED BY THE ACT AND NOT BY ANY OTHER GOVERNMENT DEPARTMENT OR OFFICER. 1940: I HAVE YOUR LETTER OF JUNE 21. BY WHOM THE SPECIFIED WAGE RATES WERE ESTABLISHED. ARE TO BE UTILIZED IN PAYMENTS UNDER SUCH CONTRACTS. NO FUNDS DERIVED FROM SECTION 1 OF THE EMERGENCY RELIEF APPROPRIATION ACT OF 1939 ARE HERE INVOLVED.

B-11020, JULY 11, 1940, 20 COMP. GEN. 18

CONTRACTS - WAGE STIPULATIONS AND PRICE INCREASING PROVISIONS IN THE ABSENCE OF EXPRESS STATUTORY PROVISION THERE IS NO AUTHORITY TO INCLUDE IN CONTRACTS OF THE UNITED STATES ANY PROVISION NOT ESSENTIAL TO THE ACCOMPLISHMENT OF THE PURPOSE OF THE APPROPRIATION UNDER WHICH THE CONTRACT IS MADE, THE NECESSARY OR PROBABLE RESULT OF WHICH MAY BE TO INCREASE THE CONTRACT PRICES WHICH THE UNITED STATES MUST PAY. A PROVISION REQUIRING THAT A CONTRACTOR PAY HIS EMPLOYEES A STIPULATED MINIMUM WAGE SHOULD NOT BE INCLUDED IN SPECIFICATIONS FOR CONSTRUCTION AND REPAIR CONTRACTS WHICH INVOLVE $2000 OR LESS, AND HENCE ARE NOT SUBJECT TO THE MINIMUM WAGE PROVISIONS OF THE BACON-DAVIS ACT AS AMENDED AUGUST 30, 1935, 49 STAT. 1011. FARM SECURITY ADMINISTRATION CONSTRUCTION AND REPAIR CONTRACTS IN AMOUNTS OF $2,000 OR LESS MAY NOT REQUIRE THAT A CONTRACTOR PAY ITS EMPLOYEES AT A STIPULATED MINIMUM WAGE RATE REGARDLESS OF WHETHER THE FUNDS INVOLVED BE THOSE APPROPRIATED UNDER SECTION 3 OF THE EMERGENCY RELIEF APPROPRIATION ACT OF 1939, OR FUNDS TRANSFERRED IN TRUST TO THE UNITED STATES FROM STATE RURAL REHABILITATION CORPORATIONS. THE MINIMUM WAGE RATES REQUIRED BY THE BACON-DAVIS ACT AS AMENDED AUGUST 30, 1935, 49 STAT. 1011, TO BE INCLUDED IN CERTAIN CONTRACTS IN EXCESS OF $2,000, ARE FOR DETERMINATION BY THE SECRETARY OF LABOR AS REQUIRED BY THE ACT AND NOT BY ANY OTHER GOVERNMENT DEPARTMENT OR OFFICER. CONTRACTS INVOLVING THE USE OF "TRUST" FUNDS TRANSFERRED FROM STATE RURAL REHABILITATION CORPORATIONS TO THE UNITED STATES SHOULD BE EXECUTED AND PERFORMED IN CONFORMITY WITH THE LAWS AND PROCEDURES APPLICABLE TO THE EXPENDITURE OF FEDERAL FUNDS.

ACTING COMPTROLLER GENERAL ELLIOTT TO THE SECRETARY OF AGRICULTURE, JULY 11, 1940:

I HAVE YOUR LETTER OF JUNE 21, 1940, AS FOLLOWS:

THE FARM SECURITY ADMINISTRATION OF THIS DEPARTMENT HAS RECEIVED THREE LETTERS DATED APRIL 24, APRIL 25, AND MAY 8, 1940, FROM THE CONTRACT EXAMINING SECTION OF YOUR OFFICE, REQUESTING CERTAIN INFORMATION AS TO FOUR CONTRACTS, ER-A4FSA-847, EARL MCCUISTON AND RAY WILLIAMS; A5FSA-1078, WILLIAM J. BLEAKLEY; A3FSA-1128, J. B. HANCOCK AND COMPANY; AND A5FSA- 1092, HENRY A. IVEY.

EACH OF THESE CONTRACTS CONTAINS A PROVISION REQUIRING THE CONTRACTOR TO PAY CERTAIN MINIMUM WAGES, AS SET FORTH THEREIN, TO EMPLOYEES ENGAGED UPON THE CONTRACT WORK. INFORMATION HAS BEEN REQUESTED AS TO THE DESIGNATION OF THE APPROPRIATION CHARGEABLE WITH PAYMENTS UNDER THESE CONTRACTS, BY WHOM THE SPECIFIED WAGE RATES WERE ESTABLISHED, AND WHETHER ANY FUNDS DERIVED FROM SECTION 1 OF THE EMERGENCY RELIEF APPROPRIATION ACT OF 1939, 53 STAT. 933, ARE TO BE UTILIZED IN PAYMENTS UNDER SUCH CONTRACTS. ATTENTION HAS ALSO BEEN DIRECTED TO THE ACTING COMPTROLLER GENERAL'S DECISION OF SEPTEMBER 30, 1938, A-96689, 18 COMP. GEN. 285, AND TO SECTIONS 3, 15, AND 34 OF THAT ACT.

NO FUNDS DERIVED FROM SECTION 1 OF THE EMERGENCY RELIEF APPROPRIATION ACT OF 1939 ARE HERE INVOLVED, SO THAT THE PROVISIONS OF SECTION 15 OF THAT ACT, WITH RESPECT TO THE MONTHLY EARNING SCHEDULE TO BE FIXED BY THE COMMISSIONER OF WORK PROJECTS FOR PERSONS ENGAGED UPON WORK PROJECTS FINANCED UNDER THE FORMER SECTION, ARE NOT APPLICABLE. CONTRACT ER-AHFSH- 847 IS, HOWEVER, TO BE FINANCED WITH FUNDS MADE AVAILABLE UNDER SECTION 3 OF THAT ACT, APPROPRIATION SYMBOL 201241; CONTRACT A3FSA-1128, "OPERATION AND MAINTENANCE" FUNDS UNDER SECTION 3 OF THE BANKHEAD-BLACK ACT, 49 STAT. 2035, APPROPRIATION SYMBOL 12X8000; CONTRACT A5FSA-1078, TRANSFERRED FUNDS OF THE SOUTH CAROLINA RURAL REHABILITATION CORPORATION, APPROPRIATION SYMBOL 12X8784.038; AND CONTRACT A5FSA-1092, TRANSFERRED FUNDS OF THE GEORGIA RURAL REHABILITATION CORPORATION, APPROPRIATION SYMBOL 12X8784.009.

THE WAGE RATES SPECIFIED IN THESE CONTRACTS WERE FIXED BY THE ADMINISTRATOR OF THE FARM SECURITY ADMINISTRATION (UPON THE ADVICE OF THE LABOR RELATIONS ADVISER AND PURSUANT TO AUTHORITY DELEGATED BY ME) SUBSTANTIALLY IN CONFORMITY WITH THE PREVAILING RATES OF WAGES FOR SIMILAR WORK IN THE SAME LOCALITY. THIS SAME PROCEDURE HAS BEEN FOLLOWED UNDER THE PRECEDING RELIEF ACTS, WITH RESPECT TO SIMILAR CONTRACTS UNDER $2,000, AND WAS APPROVED IN THE ABOVE-CITED DECISION OF YOUR OFFICE. IT IS RECOGNIZED THAT THERE IS NO EXPRESS STATUTORY AUTHORITY FOR THE ESTABLISHMENT OF SUCH WAGE RATES, BUT IT IS BELIEVED THAT THE FIXING OF WAGE RATES TO BE PAID UNDER SUCH CONTRACTS IS CLEARLY NECESSARY AND DESIRABLE FROM AN ADMINISTRATIVE POINT OF VIEW. THE FACT IS THAT CONTRACTS SUCH AS ARE HERE INVOLVED CONTEMPLATE THE PERFORMANCE OF WORK ON PROJECTS WITH RESPECT TO WHICH LARGER CONTRACTS OF A SIMILAR NATURE (IN EXCESS OF $2,000) HAVE BEEN ENTERED INTO, REQUIRING THE PAYMENT OF MINIMUM WAGE RATES DETERMINED PURSUANT TO THE BACON-DAVIS ACT, AS AMENDED BY THE ACT OF AUGUST 30, 1935, 49 STAT. 1011. THE SUCCESSFUL AND EXPEDITIOUS PROSECUTION OF THE WORK DEPENDS, OF COURSE, UPON THE EXISTENCE OF SATISFACTORY LABOR RELATIONS, WHICH PRESUMES THAT THE EMPLOYEES OF ALL CONTRACTORS ENGAGED IN ANY ONE LOCALITY WILL BE TREATED ALIKE.

UNDER THESE CIRCUMSTANCES, IT WAS BELIEVED TO BE NECESSARY AND PROPER TO REQUIRE THE PAYMENT OF MINIMUM WAGE RATES UNDER THESE SMALLER CONTRACTS IN CONFORMITY WITH THOSE REQUIRED UNDER THE LARGER CONTRACTS EXPRESSLY COVERED BY THE BACON-DAVIS ACT. MOREOVER, THE ESTABLISHMENT OF UNIFORM MINIMUM WAGE RATES SEEMED TO BE REASONABLY REQUISITE AND RELATED TO THE ACCOMPLISHMENT OF THE LEGISLATIVE PURPOSES INVOLVED, NAMELY, THE PROVISION OF RELIEF AND WORK RELIEF, IN THE SENSE THAT SUCH OBJECTIVE HAS ALWAYS IMPLIED THE PAYMENT OF AN ADEQUATE MINIMUM WAGE TO ALL PERSONS EMPLOYED (EITHER DIRECTLY OR BY CONTRACT) UNDER THE RELIEF PROGRAM.

YOUR ATTENTION IS INVITED, IN THIS CONNECTION, TO THE POSITION TAKEN BY THE FORMER COMPTROLLER GENERAL (A-67190, A-67191, MARCH 27, 1936) (15 COMP. GEN. 859) TO THE EFFECT THAT FUNDS APPROPRIATED BY THE EMERGENCY RELIEF APPROPRIATION ACT OF 1935 WERE NOT AVAILABLE FOR THE PURCHASE OF PRISON-MADE GOODS, NOTWITHSTANDING THE FACT THAT THAT ACT MADE NO PROVISION WITH REGARD TO SUCH GOODS AND THAT THE ACT OF MAY 27, 1930, 46 STAT. 391, AS AMENDED BY THE ACT OF JUNE 23, 1934, 48 STAT. 1211, PROVIDES SPECIFICALLY THAT ESTABLISHMENTS OF THE GOVERNMENT SHALL PURCHASE SUCH PRODUCTS OF FEDERAL PENAL AND CORRECTIONAL INSTITUTIONS AS MEET THEIR REQUIREMENTS. THE FORMER COMPTROLLER GENERAL POINTED OUT THAT THE MAKING OF PURCHASES FROM FEDERAL PRISONS APPEARED TO BE OUT OF LINE WITH THE PURPOSE FOR WHICH SUCH APPROPRIATION WAS MADE, AND THAT, THEREFORE, SUCH PURCHASES SHOULD NOT BE MADE. IT IS BELIEVED THAT THE ADMINISTRATIVE DETERMINATION HERE INVOLVED WITH RESPECT TO THE RELATIONSHIP BETWEEN MINIMUM WAGES AND THE LEGISLATIVE OBJECTIVE, AND ALSO THE MAINTENANCE OF SATISFACTORY LABOR RELATIONS, IS EQUALLY JUSTIFIABLE AND PROPER, AND THAT SUCH PROCEDURE IS AUTHORIZED BY SECTION 14 OF THE EMERGENCY RELIEF APPROPRIATION ACT OF 1939, PROVIDING THAT AGENCIES RECEIVING APPROPRIATIONS THEREUNDER MAY PRESCRIBE SUCH RULES AND REGULATIONS AS ARE NECESSARY TO CARRY OUT THE PURPOSES FOR WHICH SUCH APPROPRIATIONS ARE MADE. IT WOULD APPEAR REASONABLE TO PRESUME THAT THE AGENCY RECEIVING AND ADMINISTERING AN APPROPRIATION UNDER THE EMERGENCY RELIEF APPROPRIATION ACT OF 1939, AND WHICH ADMINISTERED SIMILAR APPROPRIATIONS UNDER THE PRECEDING RELIEF ACTS, SHOULD BE BEST QUALIFIED TO JUDGE AS TO THE NATURE, NECESSITY, AND SCOPE OF THE RULES AND REGULATIONS WHICH, IT IS ADMINISTRATIVELY BELIEVED, WILL EFFECTUATE THE PURPOSES OF THE APPROPRIATION. THE CONGRESS APPARENTLY RECOGNIZED SUCH FACT BY VESTING EACH SUCH AGENCY WITH AUTHORITY TO PROMULGATE THE NECESSARY REGULATIONS.

INSTRUCTIONS HAVE NOW BEEN ISSUED, HOWEVER, TO THE EFFECT THAT, PENDING YOUR DECISION IN THIS MATTER, SPECIFICATIONS IN CONNECTION WITH CONSTRUCTION CONTRACTS INVOLVING LESS THAN $2,000 SHALL NOT PRESCRIBE MINIMUM WAGE RATES.

AS INDICATED ABOVE, TWO OF THE CONTRACTS HERE INVOLVED CONTEMPLATE THE USE OF FUNDS WHICH HAVE BEEN TRANSFERRED IN TRUST TO THE FARM SECURITY ADMINISTRATION FROM STATE RURAL REHABILITATION CORPORATIONS. AS YOU KNOW, THESE ARE FUNDS WHICH HAVE NOT BEEN APPROPRIATED FOR THE USE OF THE FARM SECURITY ADMINISTRATION, BUT ARE BEING ADMINISTERED BY THAT ADMINISTRATION (TOGETHER WITH OTHER ASSETS OF SUCH CORPORATIONS) IN FURTHERANCE AND AS A PART OF ITS RURAL REHABILITATION PROGRAM IN THE STATES CONCERNED. IT HAS BEEN THE ADMINISTRATIVE POLICY IN THE EXPENDITURE OF SUCH FUNDS TO FOLLOW THE LAWS AND PROCEDURES APPLICABLE TO THE EXPENDITURE OF FEDERAL FUNDS. IT IS NOT BELIEVED, HOWEVER, THAT THERE IS ANY LEGAL BASIS OF OBJECTION TO THE PRESCRIPTION OF MINIMUM WAGE RATES IN SUCH CONTRACTS.

THE APPLICATION PROJECT NUMBERS HERE INVOLVED ARE AS FOLLOWS:

CONTRACT ER-A4FSA-87, OP. NO. 901-7-14;

CONTRACT A3FSA-1128, OP. NO. RR-MO-17;

CONTRACT A5FSA-1078, ALLOTMENT ( WORKS PROJECT) NO. 46-54-40-303 3;

AND

CONTRACT A5FSA-1092, ALLOTMENT ( WORKS PROJECT) NO. 10-58-40-303 3.

CONTRACT A3FSA-1128, APRIL 9, 1940, WITH J. B. HANCOCK AND CO., SEDALIA, MO., COVERED FURNISHING ALL LABOR, TOOLS, MATERIALS, EQUIPMENT, AND OTHER SERVICES, AND PERFORMING ALL WORK NECESSARY AND REQUIRED FOR PERFORMING ALL THE ITEMS OF GENERAL REPAIR WORK ON ENUMERATED UNITS LOCATED ON OSAGE FARMS PROJECT, NEAR HUGHESVILLE, MO., FOR THE AGGREGATE CONTRACT PRICE OF $1,498.

CONTRACT ER-A4FSA-847, MARCH 2, 1940, WITH EARL MCCUISTON AND ROY WILLIAMS, CROSSVILLE, TENN., WAS FOR FURNISHING LABOR, MATERIALS, AND EQUIPMENT, EXCEPT AS SPECIFIED IN SAID CONTRACT TO BE FURNISHED BY THE GOVERNMENT, FOR THE INSTALLATION OF A HAND PUMP, INSTALLATION OF PIPE LINES AND HYDRANTS, AND THE CONSTRUCTION OF THREE FROST-PROOF PUMP HOUSES ON CUMBERLAND HOMESTEADS PROJECT, ADJACENT TO CROSSVILLE, TENN., FOR THE AMOUNT OF $459.

CONTRACT A5FSA-1078, APRIL 1, 1940, WITH WILLIAM J. BLEAKLEY, ORANGEBURG, S.C., COVERED CONSTRUCTION OF FOUR CANNING KITCHENS ON DESIGNATED UNITS OF ALLENDALE FARMS PROJECT, ALLENDALE COUNTY, S.C., AT $356 EACH, OR AN AGGREGATE CONTRACT PRICE OF $1,424.

CONTRACT A5FSA-1092, APRIL 30, 1940, WITH HENRY A. IVEY, MONTEZUMA, GA., WAS FOR THE CONSTRUCTION OF AN EIGHT-BAY EQUIPMENT SHED AND FENCES ON THE FLINT RIVER FARMS PROJECT, MACON COUNTY, GA., FOR THE LUMP SUM PRICE OF $1,492.

THE ABOVE CONTRACTS WERE EXECUTED ON GOVERNMENT STANDARD FORM NO. 33, SHORT FORM CONTRACT, AND EACH INCLUDED A PROVISION IN SUBSTANTIALLY THE SAME WORDS, AS FOLLOWS: " IN THE PERFORMANCE OF ANY CONTRACT RESULTING FROM THIS INVITATION, THE CONTRACTOR SHALL PAY ALL LABORERS OR MECHANICS, EMPLOYED AT THE SITE OF THE WORK, NOT LESS THAN THE APPROPRIATE MINIMUM WAGE RATES AS SPECIFIED BELOW," AND THERE FOLLOWED IN EACH INSTANCE A LIST COMPRISING THE DIFFERENT TYPES OF LABORERS AND MECHANICS TO BE EMPLOYED IN THE PERFORMANCE OF THE WORK AND THE MINIMUM HOURLY WAGE TO BE PAID EACH CLASS.

IT IS IMMEDIATELY APPARENT THAT THE CONTRACTS ARE MERELY ORDINARY CONTRACTS, AWARDED TO THE LOWEST BIDDER AFTER ADVERTISING FOR BIDS IN CONFORMITY WITH SECTION 3709, REVISED STATUTES, INVOLVING CONSTRUCTION, REPAIR, OR ALTERATION OF PROPERTY FOR THE UNITED STATES, AND THAT EACH CONTRACT IS LESS THAN $2,000 IN AMOUNT, AND HENCE NOT WITHIN THE TERMS OF THE BACON-DAVIS ACT AS AMENDED AUGUST 30, 1935, 49 STAT. 1011. THERE APPEARS NOTHING IN, OR IN CONNECTION WITH, THESE CONTRACTS TO EXEMPT THEM FROM STATUTORY REQUIREMENTS AND ESTABLISHED RULES GOVERNING PURCHASES AND CONTRACTS FOR GOVERNMENT NEEDS. THE RULE IS WELL ESTABLISHED AND HAS LONG BEEN RECOGNIZED BY THE COURTS AS A PRIMARY INTENDMENT OF SECTION 3709, REVISED STATUTES, AND RELATED ENACTMENTS, THAT GOVERNMENT NEEDS ARE TO BE SUPPLIED AT THE MOST REASONABLE PRICE OBTAINABLE WHETHER SUCH NEEDS ARE FOR MATERIALS, EQUIPMENT, OR SUPPLIES, OR FOR CONSTRUCTION, REPAIR, OR ALTERATION OF PUBLIC WORKS. EQUALLY WELL RECOGNIZED AND ESTABLISHED IS THE RULE THAT IN THE ABSENCE OF EXPRESS STATUTORY PROVISION THEREFOR, THERE IS NO AUTHORITY IN ANY ADMINISTRATIVE PURCHASING OR CONTRACTING AGENCY OF THE GOVERNMENT TO INCLUDE IN CONTRACTS OF THE UNITED STATES ANY PROVISION NOT ESSENTIAL TO THE ACCOMPLISHMENT OF THE PURPOSE OF THE APPROPRIATION UNDER WHICH THE CONTRACT IS MADE, THE NECESSARY OR PROBABLE RESULT OF WHICH MAY BE TO ENHANCE THE CONTRACT PRICES WHICH THE UNITED STATES MUST PAY. THAT ANY PROVISION IN ADVERTISED SPECIFICATIONS STIPULATING THAT A CONTRACTOR MUST PAY HIS EMPLOYEES A MINIMUM WAGE POSSIBLY OR PROBABLY WILL HAVE THE EFFECT OF INCREASING CONTRACT PRICES TO THE GOVERNMENT WOULD APPEAR NOT OPEN TO QUESTION. SEE 19 COMP. GEN. 673.

THE QUESTION PRESENTED IN YOUR SUBMISSION IS CLOSELY ANALOGOUS TO THAT CONSIDERED IN THE CITED DECISION; AND WHILE THE MATTER THERE INVOLVED WAS THE CONTRACT FIXING OF MINIMUM WAGES TO BE PAID OPERATORS OF RENTED MOTOR EQUIPMENT, THE CONCLUSION THERE REACHED IS APPOSITE AND FOR APPLICATION HERE--- THAT INCLUSION IN GOVERNMENT CONTRACTS OF PROVISIONS NOT EXPRESSLY AUTHORIZED BY STATUTE AND NOT ESSENTIAL FOR THE ACCOMPLISHMENT OF THE PURPOSE OF THE APPROPRIATION UNDER WHICH THE CONTRACT IS MADE, THE NECESSARY OR PROBABLE RESULT OF WHICH MAY BE TO INCREASE CONTRACT PRICES TO THE UNITED STATES, IS UNAUTHORIZED.

TO EPITOMIZE YOUR SUBMISSION, YOU CONCEDE THAT THERE IS NO EXPRESS STATUTORY AUTHORITY FOR THE ESTABLISHMENT OF WAGE RATES AS WAS DONE IN THESE INSTANCES, BUT YOU STATE (1) THAT THE FIXING OF WAGE RATES TO BE PAID UNDER SUCH CONTRACTS "IS CLEARLY NECESSARY AND DESIRABLE FROM AN ADMINISTRATIVE POINT OF VIEW; " (2) THAT SUCH CONTRACTS CONTEMPLATE WORK ON PROJECTS WITH RESPECT TO WHICH LARGER CONTRACTS OF A SIMILAR NATURE (IN EXCESS OF $2,000) HAVE BEEN ENTERED INTO, REQUIRING THE PAYMENT OF MINIMUM WAGE RATES PURSUANT TO THE BACON-DAVIS ACT AS AMENDED AUGUST 30, 1935, 49 STAT. 1011; AND (3) THAT THE SUCCESSFUL AND EXPEDITIOUS PROSECUTION OF THE WORK DEPENDS UPON "THE EXISTENCE OF SATISFACTORY LABOR RELATIONS, WHICH PRESUMES THAT THE EMPLOYEES OF ALL CONTRACTORS ENGAGED IN ANY ONE LOCALITY WILL BE TREATED ALIKE.' YOU EXPRESS THE VIEW THAT "THE ESTABLISHMENT OF UNIFORM MINIMUM WAGE RATES SEEMED TO BE REASONABLY REQUISITE AND RELATED TO THE ACCOMPLISHMENT OF THE LEGISLATIVE PURPOSES INVOLVED, NAMELY, THE PROVISION OF RELIEF AND WORK RELIEF, IN THE SENSE THAT SUCH OBJECTIVE HAS ALWAYS IMPLIED THE PAYMENT OF AN ADEQUATE MINIMUM WAGE TO ALL PERSONS EMPLOYED (EITHER DIRECTLY OR BY CONTRACT) UNDER THE RELIEF PROGRAM.' AND YOU STATE THE BELIEF THAT THE ADMINISTRATIVE DETERMINATION WITH RESPECT TO THE RELATIONSHIP BETWEEN MINIMUM WAGES AND THE LEGISLATIVE OBJECTIVE,"AND ALSO THE MAINTENANCE OF SATISFACTORY LABOR RELATIONS" IS JUSTIFIABLE AND PROPER, AND THAT SUCH PROCEDURE IS AUTHORIZED BY SECTION 14 OF THE EMERGENCY RELIEF APPROPRIATION ACT OF 1939, WHICH PROVIDES THAT: " AGENCIES RECEIVING APPROPRIATIONS UNDER THIS JOINT RESOLUTION ARE AUTHORIZED TO PRESCRIBE SUCH RULES AND REGULATIONS AS MAY BE NECESSARY TO CARRY OUT THE PURPOSES FOR WHICH SUCH APPROPRIATIONS ARE MADE.' ( ITALICS SUPPLIED.) IT WAS POINTED OUT IN THE CITED DECISION OF THIS OFFICE, 18 COMP. GEN. 285, THAT, WHILE THE CONGRESS IN MAKING APPROPRIATIONS LEAVES LARGELY TO ADMINISTRATIVE DISCRETION THE CHOICE OF WAYS AND MEANS TO ACCOMPLISH THE OBJECTS OF THE APPROPRIATION, ADMINISTRATIVE DISCRETION MAY NOT TRANSCEND THE STATUTES NOR BE EXERCISED IN CONFLICT WITH LAW. IT IS WELL SETTLED THAT ADMINISTRATIVE RULES AND REGULATIONS MUST FOLLOW AND MAY NOT TRANSCEND THE LAW UPON WHICH THEIR VALIDITY DEPENDS, 17 COMP. GEN. 992, 998, CITING UNITED STATES V. GRIMAUD, 220 U.S. 506; PANAMA REFINING COMPANY V. RYAN, 293 U.S. 388, AND QUOTING FROM MORRILL V. JONES, 106 U.S. 466. NO CONSIDERATION OF ADMINISTRATIVE CONVENIENCE OR DESIRABILITY SUFFICES TO JUSTIFY A DEPARTURE FROM THAT RULE, OR TO CLOTHE WITH VALIDITY ADMINISTRATIVE RULES OR REGULATIONS NOT OTHERWISE REASONABLY WITHIN THE COMPASS OF THE PARENT STATUTE.

THERE APPEARS TO BE NO PROVISION IN THE EMERGENCY RELIEF APPROPRIATION ACT OF 1939, 53 STAT. 927, ET SEQ., WHICH EXPRESSLY AUTHORIZES, OR BY REASONABLE IMPLICATION MAY BE CONSTRUED TO AUTHORIZE, INCLUSION IN CONTRACTS SUCH AS HERE IN QUESTION OF A PROVISION REQUIRING THAT A CONTRACTOR PAY HIS OR ITS EMPLOYEES ANY STIPULATED MINIMUM WAGE RATE, FIXED BY YOU AS SECRETARY OF AGRICULTURE OR BY THE ADMINISTRATOR OF THE FARM SECURITY ADMINISTRATION PURSUANT TO AUTHORITY PURPORTED TO BE DELEGATED BY YOU, WHETHER UPON THE ADVICE OF THE LABOR RELATIONS ADVISER OR OTHERWISE, IT BEING FUNDAMENTAL THAT THE AUTHORITY UNDERTAKEN TO BE DELEGATED BY YOU CAN BE NO GREATER THAN THE AUTHORITY VESTED IN YOU BY THE STATUTE.

WHILE THE SUBJECT CONTRACTS INVOLVED CONSTRUCTION AND REPAIR, THEIR SIMILARITY TO THE "LARGER CONTRACTS OF A SIMILAR CHARACTER" REFERRED TO IN YOUR SUBMISSION CEASES THERE, FOR THE LINE OF ,SIMILARITY" IS SHARPLY DRAWN AT THE AMOUNT OF $2,000 LEGISLATIVELY FIXED IN THE BACON DAVIS ACT AS AMENDED AUGUST 30, 1935, 49 STAT. 1011, AS THE MINIMUM LIMIT OF THE STATUTE'S OPERATION, FOR UNDER THE RECOGNIZED RULE OF EXPRESSIO UNIUS EST EXCLUSIO ALTERIUS, CONSTRUCTION, ALTERATION, AND REPAIR CONTRACTS LESS THAN $2,000 IN AMOUNT ARE AS EFFECTIVELY SHUT OFF FROM ANY AUTHORIZED WAGE -FIXING PROVISIONS AS IF THEY HAD BEEN EXPRESSLY EXCEPTED BY THE STATUTE. THAT IS TO SAY, THE CONGRESS, IN THE PASSAGE OF THE BACON-DAVIS ACT AS AMENDED, HAS PROVIDED THAT ADVERTISED SPECIFICATIONS FOR CONSTRUCTION, ALTERATION, OR REPAIR CONTRACTS IN EXCESS OF $2,000 SHALL CONTAIN A PROVISION STATING THE MINIMUM WAGES TO BE PAID VARIOUS CLASSES OF LABORERS AND MECHANICS, ETC., AND, IPSO FACTO, OTHERWISE SIMILAR CONTRACTS LESS THAN $2,000 IN AMOUNT ARE EXCLUDED. EVEN IN THE CASE OF SUCH CONTRACTS IN EXCESS OF $2,000, THE BACON-DAVIS ACT REQUIRES THAT THE MINIMUM WAGE RATES ARE TO BE DETERMINED BY THE SECRETARY OF LABOR, AND THERE HAS BEEN FOUND NO PROVISION OF LAW AUTHORIZING ANY OTHER DEPARTMENT OR OFFICER OF THE GOVERNMENT TO ACCROACH THE AUTHORITY AND JURISDICTION THUS CONFIDED EXCLUSIVELY TO THE DEPARTMENT OF LABOR. WHEN A STATUTE LIMITS A THING TO BE DONE IN A PARTICULAR MODE IT INCLUDES THE NEGATIVE OF ANY OTHER MODE. BOTANY WORSTED MILLS V. UNITED STATES, 278 U.S. 282, 289, 15 COMP. GEN. 9, 11. AND, AS SAID IN DECISION OF THIS OFFICE, 18 COMP. GEN. 285, 295, WHERE CONGRESS HAS LEGISLATED ON A SUBJECT IT IS NOT OPEN TO ADMINISTRATIVE DISCRETION TO STIPULATE CONTRACT CONDITIONS BEYOND OR AT VARIANCE WITH THOSE AUTHORIZED OR DIRECTED BY STATUTE. A FORTIORI WOULD THIS APPEAR TO BE TRUE WHEN THE AUTHORITY ASSUMED IS AN AUTHORITY NOT CONFERRED BY LAW UPON ANY OFFICER OF THE GOVERNMENT.

ACCORDINGLY, IT MUST BE HELD THAT THERE WAS AND IS NO AUTHORITY FOR THE INCLUSION, IN ADVERTISED SPECIFICATIONS OR CONTRACTS OF THE CHARACTER HERE INVOLVED, OF ANY STIPULATION REQUIRING PAYMENT BY CONTRACTORS TO THEIR EMPLOYEES OF MINIMUM WAGES FIXED BY THE ADMINISTRATOR OF THE FARM SECURITY ADMINISTRATION OR OTHERWISE.

RELATIVE TO YOUR STATEMENT THAT TWO OF THE SUBJECT CONTRACTS INVOLVE THE USE OF "TRUST" FUNDS TRANSFERRED FROM STATE RURAL REHABILITATION CORPORATIONS RATHER THAN APPROPRIATED FUNDS OF THE UNITED STATES AND YOUR SUGGESTION THAT THERE IS NO LEGAL BASIS OF OBJECTION TO THE PRESCRIPTION OF MINIMUM WAGE RATES IN SUCH CONTRACTS, THE FACT REMAINS THAT SUCH CONTRACTS ARE ENTERED INTO BY REPRESENTATIVES AND AGENTS OF THE UNITED STATES AND, OSTENSIBLY, ON ITS BEHALF; AND IT WOULD NOT APPEAR THAT SUCH AGENTS ARE CLOTHED WITH ANY BROADER AUTHORITY IN ENTERING INTO SUCH CONTRACTS THAN IS CONFERRED UPON THEM BY STATUTE, AND THERE APPEARS NO SOUND REASON WHY THE SAID CONTRACTS SHOULD NOT, AS YOU SAY, BE HANDLED IN CONFORMITY WITH "THE LAWS AND PROCEDURES APPLICABLE TO THE EXPENDITURE OF FEDERAL FUNDS.'

AS TO THE VIEW EXPRESSED THAT A MINIMUM WAGE FIXING CONTRACT PROVISION IS "REASONABLY REQUISITE AND RELATED TO THE ACCOMPLISHMENT OF THE LEGISLATIVE PURPOSES INVOLVED, NAMELY, THE PROVISION OF RELIEF AND WORK RELIEF," THE LEGISLATIVE PURPOSE INVOLVED IS "TO CONTINUE TO PROVIDE WORK FOR NEEDY PERSONS ON USEFUL PUBLIC PROJECTS IN THE UNITED STATES" ETC., AND IT DOES NOT APPEAR AND IS NOT UNDERSTOOD HOW A CONTRACT PROVISION REQUIRING A CONTRACTOR TO PAY A MINIMUM WAGE TO HIS EMPLOYEES WOULD OPERATE FOR THE RELIEF OR EMPLOYMENT OR REDOUND TO THE BENEFIT OF ANY PERSON OTHER THAN THE EMPLOYEES OF THE CONTRACTOR, WHO WOULD BE EMPLOYED ON THE PROJECT IN ANY EVENT, OR WOULD IN ANY APPRECIABLE MEASURE FURTHER THE ACCOMPLISHMENT OF THE LEGISLATIVE PURPOSE AS STATED IN THE STATUTE.

ACCORDINGLY, FUTURE SIMILAR CONTRACTS OF THE FARM SECURITY ADMINISTRATION SHOULD OMIT ANY REQUIREMENT FOR THE PAYMENT OF MINIMUM WAGES.