B-37000, OCTOBER 7, 1943, 23 COMP. GEN. 262

B-37000: Oct 7, 1943

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" WAS INTENDED AS A DIRECTIVE. SO THAT FAILURE TO INCLUDE SUCH A PROVISION WILL NOT RENDER VOID AN OTHERWISE PROPER CONTRACT OR RENDER OBJECTIONABLE OTHERWISE PROPER PAYMENTS THEREUNDER. 1943: I HAVE A LETTER OF SEPTEMBER 11. IS HEREBY FURTHER AMENDED TO READ AS FOLLOWS: "WHEREAS THE SUCCESSFUL PROSECUTION OF THE WAR DEMANDS THE MAXIMUM EMPLOYMENT OF ALL AVAILABLE WORKERS REGARDLESS OF RACE. "WHEREAS IT IS THE POLICY OF THE UNITED STATES TO ENCOURAGE FULL PARTICIPATION IN THE WAR EFFORT BY ALL PERSONS IN THE UNITED STATES REGARDLESS OF RACE. "WHEREAS THERE IS EVIDENCE THAT AVAILABLE AND NEEDED WORKERS HAVE BEEN BARRED FROM EMPLOYMENT IN INDUSTRIES ENGAGED IN WAR PRODUCTION SOLELY BY REASON OF THEIR RACE.

B-37000, OCTOBER 7, 1943, 23 COMP. GEN. 262

CONTRACTS - ANTI-DISCRIMINATION STIPULATION - EFFECT OF COMMISSION THE PROVISION IN EXECUTIVE ORDER NO. 9346, THAT " ALL CONTRACTING AGENCIES OF THE GOVERNMENT OF THE UNITED STATES SHALL INCLUDE IN ALL CONTRACTS * * * A PROVISION OBLIGATING THE CONTRACTOR NOT TO DISCRIMINATE AGAINST ANY EMPLOYEE OR APPLICANT FOR EMPLOYMENT BECAUSE OF RACE, CREED, COLOR, OR NATIONAL ORIGIN AND REQUIRING HIM TO INCLUDE A SIMILAR PROVISION IN ALL SUBCONTRACTS," WAS INTENDED AS A DIRECTIVE, RATHER THAN A MANDATE, TO THE CONTRACTING AGENCIES OF THE GOVERNMENT, SO THAT FAILURE TO INCLUDE SUCH A PROVISION WILL NOT RENDER VOID AN OTHERWISE PROPER CONTRACT OR RENDER OBJECTIONABLE OTHERWISE PROPER PAYMENTS THEREUNDER.

COMPTROLLER GENERAL WARREN TO THE LIAISON OFFICER, OFFICE FOR EMERGENCY MANAGEMENT, OCTOBER 7, 1943:

I HAVE A LETTER OF SEPTEMBER 11, 1943 FROM THE DIRECTOR, DIVISION OF CENTRAL ADMINISTRATIVE SERVICES, REFERENCE FI-21, REQUESTING DECISION WHETHER CONTRACTS AND LEASES WHICH DO NOT CONTAIN AN ANTIDISCRIMINATION CLAUSE OF THE NATURE PRESCRIBED BY EXECUTIVE ORDER NO. 9346, DATED MAY 27, 1943, MAY BE ENTERED INTO AND PAYMENTS MADE THEREUNDER IN CASES WHERE THE CONTRACTOR REFUSES TO EXECUTE A CONTRACT OR LEASE CONTAINING SUCH A CLAUSE AND SIMILAR SERVICES OR SUITABLE OFFICE SPACE CANNOT BE SECURED FROM OTHER SOURCES.

EXECUTIVE ORDER 9346, SUPRA, PROVIDES, IN PERTINENT PART, AS FOLLOWS:

IN ORDER TO ESTABLISH A NEW COMMITTEE ON FAIR EMPLOYMENT PRACTICE, TO PROMOTE THE FULLEST UTILIZATION OF ALL AVAILABLE MANPOWER AND TO ELIMINATE DISCRIMINATORY EMPLOYMENT PRACTICES, EXECUTIVE ORDER NO. 8802 OF JUNE 25, 1941, AS AMENDED BY EXECUTIVE ORDER NO. 8823 OF JULY 18, 1941, IS HEREBY FURTHER AMENDED TO READ AS FOLLOWS:

"WHEREAS THE SUCCESSFUL PROSECUTION OF THE WAR DEMANDS THE MAXIMUM EMPLOYMENT OF ALL AVAILABLE WORKERS REGARDLESS OF RACE, CREED, COLOR, OR NATIONAL ORIGIN; AND

"WHEREAS IT IS THE POLICY OF THE UNITED STATES TO ENCOURAGE FULL PARTICIPATION IN THE WAR EFFORT BY ALL PERSONS IN THE UNITED STATES REGARDLESS OF RACE, CREED, COLOR, OR NATIONAL ORIGIN, IN THE FIRM BELIEF THAT THE DEMOCRATIC WAY OF LIFE WITHIN THE NATION CAN BE DEFENDED SUCCESSFULLY ONLY WITH THE HELP AND SUPPORT OF ALL GROUPS WITHIN ITS BORDERS; AND

"WHEREAS THERE IS EVIDENCE THAT AVAILABLE AND NEEDED WORKERS HAVE BEEN BARRED FROM EMPLOYMENT IN INDUSTRIES ENGAGED IN WAR PRODUCTION SOLELY BY REASON OF THEIR RACE, CREED, COLOR, OR NATIONAL ORIGIN, TO THE DETRIMENT OF THE PROSECUTION OF THE WAR, THE WORKERS' MORALE, AND NATIONAL UNITY:

"NOW, THEREFORE, BY VIRTUE OF THE AUTHORITY VESTED IN ME BY THE CONSTITUTION AND STATUTES, AND AS PRESIDENT OF THE UNITED STATES AND COMMANDER IN CHIEF OF THE ARMY AND NAVY, I DO HEREBY REAFFIRM THE POLICY OF THE UNITED STATES THAT THERE SHALL BE NO DISCRIMINATION IN THE EMPLOYMENT OF ANY PERSON IN WAR INDUSTRIES OR IN GOVERNMENT BY REASON OF RACE, CREED, COLOR, OR NATIONAL ORIGIN, AND I DO HEREBY DECLARE THAT IT IS THE DUTY OF ALL EMPLOYERS, INCLUDING THE SEVERAL FEDERAL DEPARTMENTS AND AGENCIES, AND ALL LABOR ORGANIZATIONS, IN FURTHERANCE OF THIS POLICY AND OF THIS ORDER, TO ELIMINATE DISCRIMINATION IN REGARD TO HIRE, TENURE, TERMS OR CONDITIONS OF EMPLOYMENT, OR UNION MEMBERSHIP BECAUSE OF RACE, CREED, COLOR, OR NATURAL ORIGIN.

"IT IS HEREBY ORDERED AS FOLLOWS:

"1. ALL CONTRACTING AGENCIES OF THE GOVERNMENT OF THE UNITED STATES SHALL INCLUDE IN ALL CONTRACTS HEREAFTER NEGOTIATED OR RENEGOTIATED BY THEM A PROVISION OBLIGATING THE CONTRACTOR NOT TO DISCRIMINATE AGAINST ANY EMPLOYEE OR APPLICANT FOR EMPLOYMENT BECAUSE OF RACE, CREED, COLOR, OR NATIONAL ORIGIN AND REQUIRING HIM TO INCLUDE A SIMILAR PROVISION IN ALL SUBCONTRACTS.'

THE DIFFICULTIES UPON WHICH THE REQUEST FOR DECISION IS BASED ARE DESCRIBED IN THE SUBMISSION, AS FOLLOWS:

IN COMPLIANCE WITH THE FOREGOING, THIS OFFICE HAS ISSUED INSTRUCTIONS REQUIRING THE INCORPORATION OF THE FOLLOWING CLAUSE IN ALL FUTURE CONTRACTS:

" ANTI-DISCRIMINATION

"A. THE CONTRACTOR, IN PERFORMING THE WORK REQUIRED BY THIS CONTRACT, SHALL NOT DISCRIMINATE AGAINST ANY WORKER BECAUSE OF RACE, CREED, COLOR, OR NATIONAL ORIGIN.

"B. THE CONTRACTOR AGREES THAT THE PROVISIONS OF PARAGRAPH (A) ABOVE WILL ALSO BE INSERTED IN ALL OF ITS SUBCONTRACTS. FOR THE PURPOSE OF THIS ARTICLE, A SUBCONTRACT IS DEFINED AS ANY CONTRACT ENTERED INTO BY BY THE CONTRACTOR WITH ANY INDIVIDUAL, PARTNERSHIP, ASSOCIATION, CORPORATION, ESTATE, OR TRUST, OR OTHER BUSINESS ENTERPRISE OR OTHER LEGAL ENTITY, FOR A SPECIFIC PART OF THE WORK TO BE PERFORMED IN CONNECTION WITH THE SUPPLIES OR SERVICES FURNISHED UNDER THIS CONTRACT; PROVIDED, HOWEVER, THAT A CONTRACT FOR THE FURNISHING OF STANDARD OR COMMERCIAL ARTICLES OR RAW MATERIAL SHALL NOT BE CONSIDERED AS A SUBCONTRACT.'

PURSUANT TO THESE INSTRUCTIONS, THE ANTI-DISCRIMINATION CLAUSE WAS INCORPORATED IN PROPOSED CONTRACTS WITH THE SOUTHWESTERN BELL TELEPHONE COMPANY, KANSAS CITY, MISSOURI. THESE CONTRACTS COVER TELEPHONE SERVICE TO BE FURNISHED THE NATIONAL WAR AGENCIES THROUGH THE CENTRAL ADMINISTRATIVE SERVICE SWITCHBOARD AT KANSAS CITY, MISSOURI, AND PAY TELEPHONE BOOTHS INSTALLED IN A LEASED BUILDING FROM WHICH THE GOVERNMENT WAS TO RECEIVE 20 PERCENT OF THE COLLECTIONS MADE ON CALLS.

DUE TO THE INCLUSION OF THE ANTI-DISCRIMINATION CLAUSE REQUIRED BY EXECUTIVE ORDER NO. 9346, THE TELEPHONE COMPANY HAS REFUSED TO EXECUTE THE NECESSARY AGREEMENTS. THE SAME SITUATION HAS ARISEN WITH RESPECT TO VARIOUS LEASES IN WHICH THIS CLAUSE HAS BEEN INCORPORATED.

SINCE TELEPHONE SERVICE IN KANSAS CITY, MISSOURI, CAN BE OBTAINED ONLY THROUGH THE SOUTHWESTERN BELL TELEPHONE COMPANY AND AVAILABLE OFFICE SPACE IN CERTAIN SECTIONS OF THE COUNTRY IS AT A MINIMUM, THE REFUSAL OF CONTRACTORS TO ACCEPT CONTRACTS CONTAINING THE ANTI DISCRIMINATION CLAUSE HAS CAUSED CONSIDERABLE ADMINISTRATIVE DIFFICULTIES.

ADMITTEDLY, THE MATTER OF THE INCLUSION IN GOVERNMENT CONTRACTS OF ANTIDISCRIMINATION CLAUSES HAS NOT BEEN THE SUBJECT OF SPECIFIC STATUTORY ENACTMENT. HENCE, PAST DECISIONS OF THE ACCOUNTING OFFICERS WITH REFERENCE TO CONTRACT PROVISIONS OR STIPULATIONS EXPRESSLY REQUIRED BY ACT OF CONGRESS ARE--- AT MOST--- ONLY INDIRECTLY APPLICABLE TO THE INSTANT CASE. SEE 16 COMP. GEN. 583, RE. WALSH HEALEY ACT OF JUNE 30, 1936, 49 STAT. 2036; 17 ID. 937, 18 ID. 646, AND 20 ID. 890, RE EIGHT-HOUR LAW OF JUNE 19, 1912, 37 STAT 137; 15 ID. 577, RE BITUMINOUS COAL CONSERVATION ACT OF 1935, 49 STAT. 991; 4 ID. 208, AND 5 ID. 376, RE HEARD ACT OF AUGUST 13, 1894, AS AMENDED, 33 STAT. 811; 12 ID. 122, RE STATUTORY PROHIBITIONS AGAINST PURCHASE OF FOREIGN PRODUCTS; 19 ID. 516, RE CONGRESSIONAL INTEREST STIPULATIONS; AND 17 ID. 37, RE NATIONAL LABOR RELATIONS ACT, 49 STAT. 449. HOWEVER, FOR PRESENT PURPOSES, IT WILL BE ASSUMED THAT THE INVOLVED PORTION OF EXECUTIVE ORDER NO. 9346 SHOULD BE GIVEN THE SAME EFFECT AS A STATUTE ENACTED IN LIKE TERMS, UNDER LIKE CONDITIONS, AND FOR A LIKE PURPOSE.

THE PORTION OF THE ORDER RELATING TO THE INCLUSION OF SUCH PROVISIONS IN GOVERNMENT CONTRACTS IS ADDRESSED PRIMARILY TO THE CONTRACTING AGENCIES OF THE GOVERNMENT RATHER THAN TO CONTRACTORS. BUT SUCH FACT WOULD NOT BE MATERIAL IF IT BE CONCLUDED THAT THE ORDER IS OF A MANDATORY NATURE; FOR, IN THAT EVENT, IT WOULD BE BEYOND THE AUTHORITY OF A GOVERNMENT OFFICER TO EXECUTE A CONTRACT OR LEASE NOT CONTAINING SUCH PROVISIONS. NOR WOULD THERE BE AUTHORITY IN THIS OFFICE IN THE AUDIT OF CONTRACT PAYMENTS TO MAKE EXCEPTION TO THE ORDER UPON THE FACTS AND CIRCUMSTANCES OF PARTICULAR CASES. SEE, IN THIS CONNECTION, 20 COMP. GEN. 890.

HENCE, THERE IS FOR CONSIDERATION THE QUESTION WHETHER THE SECTION OF THE EXECUTIVE ORDER HERE INVOLVED IS MANDATORY, IN THE SENSE THAT FAILURE TO COMPLY THEREWITH VITIATES THE ACTION TAKEN, OR WHETHER IT IS DIRECTORY ONLY, LEAVING SOME DISCRETION IN THE VARIOUS CONTRACTING AGENCIES OF THE GOVERNMENT TO MITIGATE LITERAL APPLICATION OF THE ORDER IN PARTICULAR CASES. SEE VAUGHAN V. JOHN C. WINSTON CO., 83 F.2D 370; BALLOU V. KEMP, 92 F.2D 556; IN RE HODGES, 4 F.1SUPP. 804. WHEN USED IN STATUTES, THE WORD "SHALL" ORDINARILY IS CONSTRUED IN THE IMPERATIVE OR MANDATORY SENSE; BUT COURTS REFUSE TO ADOPT THAT MEANING WHEN TO DO SO WOULD DO VIOLENCE TO THE OBJECTS AND PURPOSES OF THE STATUTE AS A WHOLE. SEE WORDS AND PHRASES, PERMANENT EDITION, VOLUME 39, PAGE 91 ET SEQ.

THE SPECIFIC PURPOSES SOUGHT TO BE ACCOMPLISHED BY EXECUTIVE ORDER NO. 9346 ARE CLEARLY STATED IN ITS TEXT, NAMELY: TO PROMOTE THE FULLEST UTILIZATION OF ALL AVAILABLE MANPOWER AND TO ELIMINATE DISCRIMINATORY EMPLOYMENT PRACTICES. THESE AIMS, IT IS STATED, ARE BASED UPON THE FIRM BELIEF OF THE PRESIDENT "THAT THE DEMOCRATIC WAY OF LIFE WITHIN THE NATION CAN BE DEFENDED SUCCESSFULLY ONLY WITH THE HELP AND SUPPORT OF ALL GROUPS WITHIN ITS BORDERS.' OBVIOUSLY, THE PRIME OBJECTIVE IS THE SUCCESSFUL AND UNIMPEDED PROSECUTION OF THE WAR. AND IT IS IN THAT LIGHT THAT THE NATURE OF THE SECTION ADDRESSED TO THE CONTRACTING AGENCIES OF THE GOVERNMENT MUST BE REGARDED; THAT IS, WHETHER INTENDED AS A MANDATE OR AS A DIRECTIVE.

IT IS TO BE ASSUMED THAT THE INSTANCES WILL BE FEW IN WHICH CONTRACTORS WILL REFUSE TO EXECUTE CONTRACTS WITH THE GOVERNMENT SOLELY BY REASON OF THE INCLUSION OF AN ANTIDISCRIMINATION PROVISION. BUT, IN SUCH INSTANCES, NO USEFUL PURPOSE COULD POSSIBLY BE SERVED BY A REQUIREMENT THAT THE GOVERNMENT AGENCY INVOLVED COULD NOT CONSUMMATE A CONTRACT WITH SUCH INDIVIDUALS OR FIRMS WITHOUT THE PROVISIONS IN QUESTION, ESPECIALLY IF THE DESIRED SERVICE COULD NOT BE PROCURED FROM ANY OTHER SOURCE. IT SEEMS THAT THE MOST THAT CAN BE ACCOMPLISHED BY GOVERNMENT CONTRACTING AGENCIES IN CARRYING OUT THE NATIONAL POLICY OF NON-DISCRIMINATION IN THE EMPLOYMENT OF WORKERS AS DECLARED BY THE PRESIDENT IS TO SECURE THE ASSENT OF CONTRACTORS TO SUCH PROVISIONS WHEREVER AND WHENEVER POSSIBLE. OTHERWISE, THE NET EFFECT OF THE REQUIREMENT WOULD BE TO OBSTRUCT THE ACTIVITIES OF THE SEVERAL AGENCIES OF THE GOVERNMENT WITH NO APPARENT COMPENSATING BENEFIT.

ACCORDINGLY, IT IS CONCLUDED THAT THE PARAGRAPH OF EXECUTIVE ORDER NO. 9346 INVOLVING THE INCLUSION IN GOVERNMENT CONTRACTS OF A PROVISION OBLIGATING THE CONTRACTOR NOT TO DISCRIMINATE AGAINST ANY EMPLOYEES OR OR APPLICANT FOR EMPLOYMENT BECAUSE OF RACE, CREED, COLOR, OR NATIONAL ORIGIN, AND REQUIRING HIM TO INCLUDE A LIKE PROVISION IN SUBCONTRACTS, WAS INTENDED ONLY AS A DIRECTIVE TO THE CONTRACTING AGENCIES OF THE GOVERNMENT SO THAT FAILURE TO INCLUDE SUCH A PROVISION WILL NOT RENDER VOID AN OTHERWISE PROPER CONTRACT OR RENDER OBJECTIONABLE OTHERWISE PROPER PAYMENTS THEREUNDER.