B-79508, JANUARY 12, 1949, 28 COMP. GEN. 409

B-79508: Jan 12, 1949

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ARE SUBSTANTIALLY AS FOLLOWS: SUBSEQUENT TO THE CLOSE OF WORLD WAR II. THE GOVERNMENT RESERVATIONS AT THE VARIOUS LOCKS AND DAMS ON THE OHIO RIVER AND ITS TRIBUTARIES WERE OPENED TO THE PUBLIC AS RECREATIONAL AREAS. IT WAS. THE PROGRAM WAS DISCUSSED IN JANUARY 1947 WITH GOVERNOR GATES OF INDIANA. IN WHICH STATE A NUMBER OF THE RESERVATIONS ARE LOCATED. YOU WERE ADVISED BY HIM THAT THE INDIANA INSTITUTIONAL INDUSTRIES ( STATE PRISONS) WERE MANUFACTURING TRASH BURNERS AND HEAVY DURABLE RUSTIC TABLES FOR USE IN THE STATE PARKS OF INDIANA. AN INVESTIGATION WAS MADE DURING THE EARLY MONTHS OF 1947 AS TO THE POSSIBILITY OF SECURING SUCH EQUIPMENT FROM VARIOUS DEALERS. IT WAS FOUND THAT ONLY TABLES OF VERY LIGHT CONSTRUCTION WERE AVAILABLE AND THAT AVAILABLE TRASH BURNERS WERE PROHIBITIVE IN COST AND MORE ELABORATE THAN NECESSARY FOR THE USE INTENDED.

B-79508, JANUARY 12, 1949, 28 COMP. GEN. 409

CONTRACTS - SPECIFICATIONS - CONVICT LABOR NEITHER THE RESTRICTION IN SECTION 1 OF THE ACT OF FEBRUARY 23, 1887, AGAINST THE HIRING OR CONTRACTING OUT OF THE LABOR OF FEDERAL PRISONERS, NOR THE PROVISIONS OF EXECUTIVE ORDER NO. 325A, PROHIBITING THE EMPLOYMENT OF PERSONS UNDERGOING SENTENCES OF IMPRISONMENT AT HARD LABOR IMPOSED BY THE STATES IN THE PERFORMANCE OF CONTRACTS INVOLVING THE EMPLOYMENT OF LABOR, RENDER INVALID A CONTRACT WITH A STATE PRISON INDUSTRY FOR THE FURNISHING OF FINISHED ARTICLES, WHICH CONTRACT DID NOT NECESSARILY INVOLVE THE EMPLOYMENT OF LABOR IN ITS PERFORMANCE.

COMPTROLLER GENERAL WARREN TO COL. B.B. TALLEY, DEPARTMENT OF THE ARMY, JANUARY 12, 1949:

THERE HAS BEEN RECEIVED FROM THE OFFICE OF THE CHIEF OF ENGINEERS YOUR LETTER OF JULY 20, 1948, REQUESTING AN ADVANCE DECISION AS TO THE PROPRIETY OF MAKING PAYMENT ON A VOUCHER TRANSMITTED WITH YOUR LETTER DRAWN IN FAVOR OF INDIANA INSTITUTIONAL INDUSTRIES, INDIANAPOLIS, INDIANA, IN THE AMOUNT OF $4,650.

THE FACTS IN THE MATTER, AS DISCLOSED BY YOUR LETTER, ARE SUBSTANTIALLY AS FOLLOWS:

SUBSEQUENT TO THE CLOSE OF WORLD WAR II, THE GOVERNMENT RESERVATIONS AT THE VARIOUS LOCKS AND DAMS ON THE OHIO RIVER AND ITS TRIBUTARIES WERE OPENED TO THE PUBLIC AS RECREATIONAL AREAS. THE LACK OF TABLES, TOILETS, DRINKING FOUNTAINS, AND EQUIPMENT FOR THE DISPOSITION OF TRASH, GARBAGE, ETC., RESULTED IN UNSIGHTLY AND OFTEN UNSANITARY CONDITIONS. IT WAS, ACCORDINGLY, DETERMINED EARLY IN 1947 TO FURNISH CERTAIN MINIMUM FACILITIES FOR USE BY THE PUBLIC. THE PROGRAM WAS DISCUSSED IN JANUARY 1947 WITH GOVERNOR GATES OF INDIANA, IN WHICH STATE A NUMBER OF THE RESERVATIONS ARE LOCATED, AND YOU WERE ADVISED BY HIM THAT THE INDIANA INSTITUTIONAL INDUSTRIES ( STATE PRISONS) WERE MANUFACTURING TRASH BURNERS AND HEAVY DURABLE RUSTIC TABLES FOR USE IN THE STATE PARKS OF INDIANA, AND COULD FURNISH THEM TO THE CORPS OF ENGINEERS. AN INVESTIGATION WAS MADE DURING THE EARLY MONTHS OF 1947 AS TO THE POSSIBILITY OF SECURING SUCH EQUIPMENT FROM VARIOUS DEALERS, AND IT WAS FOUND THAT ONLY TABLES OF VERY LIGHT CONSTRUCTION WERE AVAILABLE AND THAT AVAILABLE TRASH BURNERS WERE PROHIBITIVE IN COST AND MORE ELABORATE THAN NECESSARY FOR THE USE INTENDED. ESTIMATES AS TO THE PROBABLE COST OF CONSTRUCTION BY THE GOVERNMENT INDICATED A COST OF $40 PER TABLE AND FROM $12 TO $15 PER TRASH BURNER FOR THE TYPE OF EQUIPMENT DESIRED. THESE PRICES, WHEN COMPARED WITH THE PRICES OF $22 PER TABLE AND $8 PER BURNER OFFERED BY THE STATE OF INDIANA, WERE CONSIDERED EXCESSIVE. ACCORDINGLY, ON SEPTEMBER 19, 1947, CONTRACT NO. W-15-029-ENG-1390, CALLING FOR THE FURNISHING OF 175 TABLES AND 100 TRASH BURNERS AT UNIT PRICES OF $22 AND $8, RESPECTIVELY, WAS ENTERED INTO BETWEEN THE CORPS OF ENGINEERS AND INDIANA INSTITUTIONAL INDUSTRIES, PURPORTEDLY UNDER THE AUTHORITY OF EXECUTIVE ORDER 9196, AS PUBLISHED IN PROCUREMENT REGULATION 608-A.THE CONTRACT ARTICLES WERE DELIVERED DURING MARCH AND APRIL 1948, AND THE MAJOR PORTION THEREOF HAVE BEEN PLACED IN USE. YOU STATE THAT IN PROCESSING THE CONTRACTOR'S INVOICES FOR PAYMENT IT WAS DISCOVERED THAT EXECUTIVE ORDER 9196 HAD BEEN RESCINDED BY EXECUTIVE ORDER 9859, DATED MAY 31, 1947--- WHICH WAS PUBLISHED IN PROCUREMENT CIRCULAR NO. 29, DATED JUNE 28, 1947--- BUT THAT, FOR SOME INEXPLICABLE REASON, THE CONTRACTING OFFICER CONCERNED DID NOT RECEIVE A COPY OF SUCH PROCUREMENT CIRCULAR. YOUR DOUBT AS TO THE PROPRIETY OF PAYMENT ON THE VOUCHER ARISES FROM THE STATED POSSIBILITY THAT THE PURCHASE MIGHT BE CONSIDERED AS IN VIOLATION OF THE ACT OF FEBRUARY 23, 1887, 24 STAT. 411. HOWEVER, YOU RECOMMEND THAT PAYMENT BE ALLOWED FOR THE FOLLOWING REASONS: THE NEGOTIATIONS PRECEDING THE PROCUREMENT WERE CARRIED OUT IN GOOD FAITH AND IN ACCORDANCE WITH REGULATIONS THEN EXISTING, THE CONTRACTING OFFICER IN MAKING THE PURCHASE ACTED IN GOOD FAITH AND WITHIN THE SCOPE OF REGULATIONS WHICH WERE AVAILABLE TO HIM, THERE WERE NO OTHER SOURCES OF SUPPLY OFFERING EQUIPMENT STURDY ENOUGH TO MEET THE RIGID USE TO WHICH IT WOULD BE SUBJECTED, AND THE PROCUREMENT WAS MADE AT A DISTINCT MONETARY ADVANTAGE TO THE GOVERNMENT. FAVORABLE CONSIDERATION OF THE VOUCHER IS ALSO RECOMMENDED BY THE OFFICE OF THE CHIEF OF ENGINEERS.

IN ADDITION TO THE BASIS FOR DOUBT EXPRESSED IN YOUR LETTER, THE PROPRIETY OF PAYMENT ON THE VOUCHER SHOULD ALSO INVOLVE CONSIDERATION OF THE POSSIBLE APPLICABILITY TO THE TRANSACTION OF THE PROVISIONS OF EXECUTIVE ORDER 325A, ISSUED MAY 18, 1905.

THE ACT OF FEBRUARY 23, 1887, SUPRA, PROVIDES, IN SECTION 1 THEREOF, AS FOLLOWS:

THAT IT SHALL NOT BE LAWFUL FOR ANY OFFICER, AGENT, OR SERVANT OF THE GOVERNMENT OF THE UNITED STATES TO CONTRACT WITH ANY PERSON OR CORPORATION, OR PERMIT ANY WARDEN, AGENT, OR OFFICIAL OF ANY STATE PRISON, PENITENTIARY, JAIL, OR HOUSE OF CORRECTION WHERE CRIMINALS OF THE UNITED STATES MAY BE INCARCERATED TO HIRE OR CONTRACT OUT THE LABOR OF SAID CRIMINALS, OR ANY OF THEM, WHO MAY HEREAFTER BE CONFINED IN ANY PRISON, JAIL, OR OTHER PLACE OF INCARCERATION FOR VIOLATION OF ANY LAWS OF THE GOVERNMENT OF THE UNITED STATES OF AMERICA.

APART FROM THE FACT THAT IT WOULD APPEAR UNLIKELY THAT THE INSTANT TRANSACTION INVOLVED FEDERAL, AS DISTINGUISHED FROM STATE, PRISONERS, THE CONTRACT ITSELF WAS NOT ONE WHEREBY THE LABOR OF PRISONERS WAS HIRED OR CONTRACTED OUT, BUT WAS ONE FOR THE FURNISHING OF CERTAIN ARTICLES. HENCE, SUCH CONTRACT WOULD NOT APPEAR TO BE IN VIOLATION OF THE CITED STATUTE.

EXECUTIVE ORDER 325A, MENTIONED ABOVE, PROVIDES IN PART AS FOLLOWS:

IT IS HEREBY ORDERED, THAT ALL CONTRACTS WHICH SHALL HEREAFTER BE ENTERED INTO BY OFFICERS OR AGENTS OF THE UNITED STATES INVOLVING THE EMPLOYMENT OF LABOR IN THE STATES COMPOSING THE UNION * * * SHALL, UNLESS OTHERWISE PROVIDED BY LAW, CONTAIN A STIPULATION FORBIDDING, IN THE PERFORMANCE OF SUCH CONTRACTS, THE EMPLOYMENT OF PERSONS UNDERGOING SENTENCES OF IMPRISONMENT AT HARD LABOR WHICH HAVE BEEN IMPOSED BY COURTS OF THE SEVERAL STATES, TERRITORIES OR MUNICIPALITIES HAVING CRIMINAL JURISDICTION.

EXECUTIVE ORDER 325A WAS SUSPENDED FOR THE DURATION OF WORLD WAR II BY EXECUTIVE ORDER 9196, ISSUED JULY 9, 1942, BUT, AS STATED IN YOUR LETTER, EXECUTIVE ORDER 9196 WAS REVOKED PRIOR TO THE EXECUTION OF THE INSTANT CONTRACT BY EXECUTIVE ORDER 9859, DATED MAY 31, 1947.

SINCE THE INSTANT CONTRACT IS FOR LESS THAN $10,000, IT IS NOT SUBJECT TO THE PROVISIONS OF SECTION 1 (D) OF THE WALSH-HEALEY ACT, 49 STAT. 2037, WHICH REQUIRE THE INCLUSION, IN ALL CONTRACTS IN EXCESS OF $10,000 FOR THE MANUFACTURING OR FURNISHING OF MATERIALS, SUPPLIES, ARTICLES, OR EQUIPMENT TO THE GOVERNMENT, OF A CLAUSE FORBIDDING THE CONTRACTOR TO EMPLOY CONVICT LABOR IN THE MANUFACTURE, PRODUCTION, OR FURNISHING OF SUCH MATERIALS. AND, UNLESS IT BE DEEMED IMPROPER BECAUSE OF THE ABOVE-QUOTED PROVISIONS OF EXECUTIVE ORDER 325A, I KNOW OF NO OTHER LEGAL OBJECTION TO SUCH A PURCHASE.

IT WILL BE NOTED THAT THE PROVISIONS OF EXECUTIVE ORDER 325A APPLY ONLY TO CONTRACTS INVOLVING ,THE EMPLOYMENT OF LABOR," AND THE REQUIRED STIPULATION FORBIDS THE EMPLOYMENT OF PERSONS UNDERGOING SENTENCES OF IMPRISONMENT AT HARD LABOR IN THE PERFORMANCE OF SUCH CONTRACTS. WHILE, IN ONE SENSE, CONTRACTS OF NEARLY ALL TYPES SAVE THOSE TO FORBEAR MAY BE SAID TO INVOLVE THE EMPLOYMENT OF LABOR, IT SEEMS EVIDENT THAT SOME LESS INCLUSIVE CATEGORY OF CONTRACTS WAS INTENDED TO BE COVERED BY THE EXECUTIVE ORDER. THE FIRST AND USUAL IMPRESSION CREATED BY THE WORDS ,INVOLVING THE EMPLOYMENT OF LABOR" IS ONE INVOLVING THE PERFORMANCE OF WORK. THUS, CONTRACTS WHICH CALL FOR THE CONSTRUCTION OF THINGS, FOR THE FURNISHING OF SERVICES, OR FOR THE SPECIAL FABRICATION OF ARTICLES CLEARLY INVOLVE THE EMPLOYMENT OF LABOR. ON THE OTHER HAND, CONTRACTS WHICH MERELY REQUIRE THE FURNISHING OF FINISHED ARTICLES DO NOT NECESSARILY INVOLVE THE EMPLOYMENT OF LABOR IN THEIR PERFORMANCE, SINCE THE CONTRACTORS MAY SECURE THE CONTRACT ARTICLES IN THE OPEN MARKET OR FROM EXISTING STOCKS. IT WOULD APPEAR, THEREFORE, THAT CONTRACTS OF THE LATTER CLASS SHOULD NOT BE CONSIDERED AS CONTRACTS "INVOLVING THE EMPLOYMENT OF LABOR" WITHIN THE PURVIEW OF EXECUTIVE ORDER 325A.

ADDITIONAL SUPPORT FOR THIS CONSTRUCTION OF THE EXECUTIVE ORDER IS FOUND IN THE FACT THAT THE STANDARD FORM OF CONSTRUCTION CONTRACT, STANDARD FORM NO. 23, WHICH WAS APPROVED BY THE PRESIDENT NOVEMBER 19, 1926, CONTAINED A REQUIREMENT THAT THE CONTRACTOR SHOULD NOT EMPLOY ANY PERSON UNDERGOING SENTENCE OF IMPRISONMENT AT HARD LABOR, BUT THE STANDARD FORM OF SUPPLY CONTRACT, STANDARD FORM NO. 32, WHICH WAS APPROVED BY THE PRESIDENT JUNE 10, 1927, DID NOT PROHIBIT THE EMPLOYMENT OF CONVICT LABOR BY THE CONTRACTOR. THERE MIGHT ALSO BE MENTIONED THE FACT THAT WHEN EXECUTIVE ORDER 325A WAS SUSPENDED BY EXECUTIVE ORDER 9196, SUPRA, TO PERMIT THE FEDERAL PURCHASE OF ARTICLES OF ANY KIND PRODUCED IN ANY FEDERAL, STATE, OR TERRITORIAL PRISON, IT WAS STATED IN EXECUTIVE ORDER 9196 THAT SUCH ORDER WAS ISSUED, INTER ALIA,"* * * IN ORDER TO REMOVE ANY DOUBTS WHICH MIGHT OTHERWISE EXIST * * *"--- PRESUMABLY AS TO THE APPLICABILITY OF EXECUTIVE ORDER 325A TO SUCH PURCHASES.

FOR THE FOREGOING REASONS, I AM OF THE OPINION THAT PURCHASES OF SUPPLIES FOR THE GOVERNMENT UNDER CONTRACTS WHICH DO NOT BY THEIR TERMS SHOW THE NECESSITY FOR THE EMPLOYMENT OF LABOR IN THEIR PERFORMANCE, AND WHICH DO NOT EXCEED $10,000 IN AMOUNT, ARE NOT RENDERED INVALID BY REASON OF THE FACT THAT THE ARTICLES FURNISHED MAY HAVE BEEN PRODUCED IN STATE PENAL INSTITUTIONS.

ACCORDINGLY, YOU ARE ADVISED THAT PAYMENT ON THE VOUCHER SUBMITTED IS AUTHORIZED, IF OTHERWISE CORRECT.

IT IS NOTED THAT SECTION 4 OF THE ACT OF DECEMBER 22, 1944, 58 STAT. 889, AS AMENDED BY SECTION 4 OF THE ACT OF JULY 24, 1946, 60 STAT. 642, AUTHORIZES THE CHIEF OF ENGINEERS TO CONSTRUCT, MAINTAIN, AND OPERATE PUBLIC PARK AND RECREATIONAL FACILITIES IN RESERVOIR AREAS UNDER THE CONTROL OF THE WAR DEPARTMENT (NO DEPARTMENT OF THE ARMY), AND IT IS ASSUMED THAT THE USE OF THE ARTICLES HERE INVOLVED WILL BE IN ACCORDANCE WITH THE ABOVE-MENTIONED PROVISIONS OF LAW.