[Protest of Army Contract Award for Repair Tool]

B-6009, NOVEMBER 1, 1939, 19 COMP. GEN. 467

CONTRACTS - EQUIPMENT RENTED WITH OPERATORS - NONAPPLICABILITY OF REQUIREMENTS AS TO MINIMUM WAGE AND PERFORMANCE AND PAYMENT BOND PROVISIONS CONTRACTS FOR RENTAL OF EQUIPMENT WITH OPERATING PERSONNEL ARE NOT CONTRACTS "FOR CONSTRUCTION, ALTERATION, AND/OR REPAIR * * * OF PUBLIC BUILDINGS OR PUBLIC WORKS"--- EVEN THOUGH THE EQUIPMENT MAY BE USED IN CONNECTION WITH THE CONSTRUCTION OF "PUBLIC BUILDINGS" OR "PUBLIC WORKS"-- - AND CONSEQUENTLY NEITHER THE MINIMUM WAGE, ETC., REQUIREMENTS OF THE BACON-DAVIS ACT, AS AMENDED, 49 STAT. 1011, NOR THE REQUIREMENTS IN THE MILLER ACT, 49 STAT. 793, AS TO PERFORMANCE AND PAYMENT BONDS, ARE FOR INCLUSION THEREIN.

COMPTROLLER GENERAL BROWN TO THE SECRETARY OF THE INTERIOR, NOVEMBER 1, 1939:

THERE HAVE BEEN BROUGHT TO MY ATTENTION THE FOLLOWING CONTRACTS, AMONG OTHERS, ENTERED INTO BY OFFICIALS OF THE BONNEVILLE PROJECT:

CHART

CONTRACT NO. DATE CONTRACTOR -------- ----------------------------------- ------------------------------ IBP 310 --------------- APR. 12, 1939 GRAHAM BROS. AND MEDLEY. IBP 324 --------------- APR. 22, 1939 PARKER - SCHRAM CO. IBP-325 -- ------------ APR. 22, 1939 JOHN HAVLIK, JR. IBP-326 ------------ -- APR. 22, 1939 J. A. LYONS. IBP-367 --------------- MAY 6, 1939 VERNIE JARL. ---------------------------------------------------- --

THE CONTRACTS ARE FOR THE RENTAL OF TRACTORS, WITH OPERATORS, FOR AN ESTIMATED NUMBER OF HOURS, AND PROVIDE FOR THE PAYMENT OF A STIPULATED SUM FOR EACH HOUR OF OPERATING USE. IN ADDITION TO FURNISHING OPERATORS, THE CONTRACTORS ARE REQUIRED TO BEAR ALL EXPENSES INCIDENT TO THE MAINTENANCE AND CARE OF THE EQUIPMENT, INCLUDING FUEL, OIL, GREASE, TIRES, AND REPAIRS. THE POINT OF DELIVERY OF THE EQUIPMENT IS SHOWN BUT THE CONTRACTS DO NOT SHOW THE PURPOSE FOR WHICH THE EQUIPMENT WAS RENTED. ALSO, THE CONTRACTS ARE MADE SUBJECT TO THE PROVISIONS OF THE BACON-DAVIS ACT, AS AMENDED, 49 STAT. 1011, AND THE MILLER ACT, 49 STAT. 793, PERFORMANCE AND PAYMENT BONDS HAVE BEEN REQUIRED, THE SPECIFICATIONS SET FORTH THE PREVAILING WAGE RATES TO BE PAID OPERATORS, MECHANICS, HELPERS, AND TRUCK DRIVERS, AND THE CONTRACTORS ARE REQUIRED TO REPORT MONTHLY TO THE DEPARTMENT OF LABOR THE NUMBER OF PERSONS ON THEIR RESPECTIVE PAY ROLLS, THE AGGREGATE AMOUNT OF SUCH PAY ROLLS, THE MAN-HOURS WORKED, ETC.

UPON RECEIPT AND EXAMINATION OF THE CONTRACTS IN THIS OFFICE A COMMUNICATION WAS DIRECTED TO THE ADMINISTRATOR OF THE BONNEVILLE PROJECT, UNDER DATE OF JULY 25, 1939, IN PERTINENT PART AS FOLLOWS:

IT IS NOTED THAT THESE CONTRACTS INCORPORATE PROVISIONS RELATIVE TO MINIMUM WAGES, ETC., IN ACCORDANCE WITH THE BACON-DAVIS ACT OF AUGUST 30, 1935 (49 STAT. 1011). AS THIS ACT APPLIES TO CONTRACTS FOR THE CONSTRUCTION, ALTERATION, AND REPAIR OF PUBLIC BUILDINGS AND PUBLIC WORKS, INFORMATION IS REQUESTED AS TO WHY THE PROVISIONS OF SAID ACT WERE INCLUDED IN THE ABOVE CONTRACTS WHICH COVER THE RENTAL OF EQUIPMENT. SEE 18 COMP. GEN. 285; ID. 616.

IT IS ALSO NOTED THAT ARTICLE G, SUBPARAGRAPH (D) OF EACH OF THE ABOVE- MENTIONED CONTRACTS PROVIDES THAT THE CONTRACTOR SHALL FURNISH REPORTS TO THE DEPARTMENT OF LABOR REGARDING THE NUMBER OF PERSONS ON THEIR RESPECTIVE PAY ROLLS, THE MAN-HOURS WORKED, ETC.

IN DECISION REPORTED IN 17 COMP. GEN. 700, IT WAS HELD THAT INASMUCH AS THE INCLUSION IN THE ADVERTISED SPECIFICATIONS OF PROVISIONS RELATING TO PAY ROLL STATISTICS, COST OF MATERIALS, ETC., NECESSARILY TENDS TO RESULT IN THE SUBMISSION OF HIGHER BIDS, OR TO RESTRICT COMPETITION, THEIR INCLUSION IS NOT AUTHORIZED IN THE ABSENCE OF STATUTORY AUTHORITY THEREFOR. THIS DECISION ALSO STATES THAT SUCH INFORMATION MAY BE REQUESTED BUT NOT REQUIRED OF THE CONTRACTOR.

THE PURCHASING OFFICER OF THE BONNEVILLE PROJECT REPLIED THERETO UNDER DATE OF AUGUST 4, 1939, STATING---

THE PROVISIONS OF THE BACON-DAVIS ACT OF AUGUST 30, 1935 (49 STAT. 1011) WERE INCLUDED IN THE SUBJECT CONTRACTS DUE TO THE FACT THAT THE WORK WHICH THEY WERE TO PERFORM WAS CONSTRUCTION OF PUBLIC WORKS, VIZ., CLEARING RIGHT-OF-WAY FOR TRANSMISSION LINES.

ARTICLE G, SUBPARAGRAPH (D) COVERING REPORTS TO THE DEPARTMENT OF LABOR WAS INCLUDED IN THE BONNEVILLE PROJECT'S UNIFORM RENTAL CONTRACT FORM BECAUSE IT WAS CONTEMPLATED AT THE TIME SUCH FORMS WERE SET UP THAT FUNDS WERE TO BE ALLOCATED FROM THE PUBLIC WORKS ADMINISTRATION TO THE BONNEVILLE PROJECT. IT WAS DEEMED ADVISABLE TO INCLUDE THE APPLICABLE PROVISIONS FROM THE PWA STANDARD FORM AND IT WAS BELIEVED THAT THE MANDATORY REPORT PROVISION WAS AUTHORIZED BY THE FEDERAL EMERGENCY ADMINISTRATOR OF PUBLIC WORKS PURSUANT TO AUTHORITY GRANTED BY LAW. AFTER THE PWA ALLOCATION WAS MADE TO THE BONNEVILLE PROJECT UNDER TITLE II OF THE EMERGENCY RELIEF ACT OF 1938, THIS PROVISION WAS INADVERTENTLY LEFT IN THE BONNEVILLE PROJECT'S STANDARD FORM. IT WAS NOT KNOWN AT THE TIME THE FORM WAS DRAWN UP THAT FUNDS ALLOCATED UNDER TITLE II OF SAID ACT WOULD NOT BE SUBJECT TO REGULATIONS OTHER THAN THOSE APPLYING TO DIRECT CONGRESSIONAL APPROPRIATIONS TO THE BONNEVILLE PROJECT.

IMMEDIATELY UPON RECEIPT OF YOUR LETTER OF JUNE 14, 1939, COVERING A SIMILAR SITUATION (RE: FILE NO. A-JS-CE), STEPS WERE TAKEN TO REMOVE THE OBJECTIONABLE PROVISION FROM THE STANDARD FORM OF SPECIFICATIONS ISSUED BY THE BONNEVILLE PROJECT AND IT HAS NOT APPEARED IN SUBSEQUENT CONTRACTS.

WITH RESPECT TO THE INCLUSION IN SUCH CONTRACTS OF A PROVISION REQUIRING THE CONTRACTOR TO FURNISH MONTHLY REPORTS TO THE SECRETARY OF LABOR CONCERNING THE NUMBER OF PERSONS ON PAY ROLLS, THE AGGREGATE AMOUNT OF SUCH PAY ROLLS, THE MAN-HOURS WORKED, ETC., YOUR ATTENTION IS INVITED TO 17 COMP. GEN. 700; 18 ID. 285; AND CIRCULAR NO. P.W. 81603, ISSUED JULY 2, 1938, BY THE FEDERAL EMERGENCY ADMINISTRATION OF PUBLIC WORKS. SINCE THE PURCHASING OFFICER OF THE BONNEVILLE PROJECT HAS STATED THAT THIS PROVISION WAS INADVERTENTLY INCLUDED IN THE CONTRACTS AND THAT ITS USE HAS SINCE BEEN ABANDONED, NO FURTHER DISCUSSION APPEARS NECESSARY IN THAT CONNECTION.

AS TO THE INCLUSION OF THE REQUIREMENTS OF THE BACON-DAVIS AND MILLER ACTS IN THE CONTRACTS, THE PURCHASING OFFICER HAS STATED, SIMPLY, THAT "THE WORK WHICH THEY WERE TO PERFORM WAS CONSTRUCTION OF PUBLIC WORKS, VIZ., CLEARING RIGHT-OF-WAY FOR TRANSMISSION LINES.' IN CONNECTION WITH SOMEWHAT SIMILAR CONTRACTS THE SENIOR ACCOUNTANT OF THE BONNEVILLE PROJECT, IN LETTER OF JULY 28, 1939, STATED---

BEGINNING WITH CONTRACT NO. 111, DATED JANUARY 23, 1939, THIS OFFICE HAD DETERMINED THAT THE PROVISIONS OF THE BACON-DAVIS ACT WERE APPLICABLE TO CONTRACTS COVERING RENTAL OF EQUIPMENT WITH OPERATING PERSONNEL, AND THE EIGHT-HOUR LAW AND CONVICT LABOR PROVISIONS HAVE BEEN INCLUDED.

THE PREVAILING WAGE PROVISION HAS BEEN REPLACED BY THE PREDETERMINED WAGE PROVISION IN ACCORDANCE WITH PUBLIC ACT NO. 403, 74TH CONGRESS.

BY ITS TERMS THE BACON-DAVIS ACT ( PUBLIC, NO. 403, 74TH CONG.) RELATES ONLY TO CONTRACTS "FOR CONSTRUCTION, ALTERATION, AND/OR REPAIR, INCLUDING PAINTING AND DECORATING, OF PUBLIC BUILDINGS OR PUBLIC WORKS OF THE UNITED STATES," ETC. THE MILLER ACT RELATES TO CONTRACTS "FOR THE CONSTRUCTION, ALTERATION, OR REPAIR OF ANY PUBLIC BUILDING OR PUBLIC WORK OF THE UNITED STATES.'

AS STATED HEREINBEFORE, THE CONTRACTS DO NOT SHOW THE PURPOSE FOR WHICH THE EQUIPMENT WAS RENTED. ON THEIR FACE THEY ARE MERELY CONTRACTS FOR RENTAL OF EQUIPMENT, WITH OPERATING PERSONNEL, AND PRESUMABLY THE EQUIPMENT MIGHT BE USED FOR ANY REASONABLE PURPOSE. IT IS NOW REPORTED, HOWEVER, THAT THE TRACTORS WERE USED IN CONNECTION WITH THE CLEARING OF RIGHTS-OF-WAY FOR TRANSMISSION LINES. CONSEQUENTLY, IT HAS BEEN STATED THE CONTRACTS ARE, IN EFFECT, CONTRACTS FOR CONSTRUCTION OF "PUBLIC WORKS.' IT IS NOT CONTENDED THAT THE CONTRACTS ARE CONTRACTS FOR "PUBLIC BUILDINGS" BUT PRESUMABLY SUCH CONTENTION WOULD BE MADE HAD THE TRACTORS BEEN USED IN CONNECTION WITH THE CONSTRUCTION OF A "PUBLIC BUILDING.' NEVERTHELESS, THE CONTRACTS ARE CONTRACTS FOR RENTAL OF EQUIPMENT, WITH OPERATING PERSONNEL; AND EVEN THOUGH THE EQUIPMENT MAY HAVE BEEN USED IN CONNECTION WITH THE CONSTRUCTION OF "PUBLIC BUILDINGS" OR "PUBLIC WORKS" THE CONTRACTS THEMSELVES CANNOT BE CONSIDERED AS CONTRACTS FOR THE CONSTRUCTION, ALTERATION, OR REPAIR OF PUBLIC BUILDINGS AND PUBLIC WORKS.

THE TERM "PUBLIC WORKS" HAS BEEN VARIOUSLY DEFINED, DEPENDING UPON THE SENSE IN WHICH IT WAS USED. IT HAS BEEN DEFINED AS "ALL FIXED WORKS CONTRACTED FOR PUBLIC USE," SOUTHERN SURETY CO. V. STANDARD SLAG CO., 159 N.E. 559, 560, 117 OHIO ST. 512; AS "ALL FIXED WORKS, CONSTRUCTED FOR PUBLIC USE, AS RAILWAYS, DOCKS, CANALS, WATER-WORKS, ROADS, ETC., " DEMETER LAND CO. V. FLORIDA PUBLIC SERVICE CO. 128 SO. 402, 406, 99 FLA. 954, AND 38 OP. ATTY. GEN. 418; AS "PERMANENT WORKS OR IMPROVEMENTS MADE FOR PUBLIC USE OR BENEFIT, AS ROADS, CANALS, OR HARBORS," FUNK AND WAGNALLS NEW STANDARD DICTIONARY AND WEBSTER'S NEW INTERNATIONAL DICTIONARY. IN TITLE GUARANTY AND TRUST CO. V. CRANE CO., 219 U.S. 24, IT WAS HELD THAT A VESSEL, MOVABLE PROPERTY, WAS A "PUBLIC WORK" BECAUSE TITLE PASSED TO THE UNITED STATES AS THE WORK WAS BEING PERFORMED AND SINCE THE VESSEL THEREUPON BECAME THE PROPERTY OF THE UNITED STATES THE WORK PERFORMED ON IT WAS A "PUBLIC WORK," THE DETERMINING FACTOR NOT BEING WHETHER THE "WORK" WAS ATTACHED TO THE SOIL, BUT WHETHER IT BELONGED TO THE PUBLIC. SEE, ALSO, MAIATICO CONST. CO. V. UNITED STATES, 79 F./2D) 418.

FROM THE FOREGOING IT WILL BE SEEN THAT "PUBLIC WORKS" OF THE UNITED STATES, GENERALLY, ARE FIXED WORKS OR MOVABLE PROPERTY IN WHICH THE TITLE IS VESTED IN THE UNITED STATES. NO CASE HAS BEEN FOUND IN WHICH A CONTRACT FOR RENTAL OF EQUIPMENT, WITH OPERATOR, HAS BEEN HELD TO BE A CONTRACT FOR "PUBLIC WORKS" AND OBVIOUSLY SUCH A CONTRACT IS NOT A CONTRACT TO CONSTRUCT A FIXED WORK OR ONE FOR CONSTRUCTING MOVABLE PROPERTY THE TITLE TO WHICH PASSES TO THE UNITED STATES DURING PERFORMANCE. ON THE CONTRARY, IT HAS BEEN HELD THAT THE FURNISHING OF MACHINERY AND THE LIKE TO A COUNTY IS NOT A "PUBLIC WORK.' PEOPLE'S BANK OF WEIR V. ATTALA COUNTY, 126 SO. 192, 193, 156 MISS. 560.

IN DECISION OF OCTOBER 7, 1938, A-97514, TO THE CHAIRMAN, TENNESSEE VALLEY AUTHORITY, IT WAS STATED WITH RESPECT TO A SIMILAR MATTER, AS FOLLOWS:

ALSO, CONTRACTS SUCH AS HERE INVOLVED COVERING RENTAL OF EQUIPMENT (WITH OPERATOR) ARE NOT CONTRACTS "FOR THE CONSTRUCTION, ALTERATION OR REPAIR OF ANY PUBLIC WORK OF THE UNITED STATES" WITHIN THE PURVIEW OF THE ACT OF AUGUST 24, 1935, 49 STAT. 793, THE SO-CALLED DUAL BOND ACT. THAT IS TO SAY, THE OWNER OF THE TRUCKS IS NOT AWARDED A CONTRACT FOR THE CONSTRUCTION, ALTERATION, OR REPAIR OF ANY PUBLIC BUILDING OR PUBLIC WORK OF THE UNITED STATES AND THE FACT THAT THE RENTED TRUCKS OR EQUIPMENT MAY BE USED "IN CONNECTION WITH THE CONSTRUCTION OF A PUBLIC WORK" AS SUGGESTED IN THE ABOVE-QUOTED LETTER DOES NOT ALTER THE SITUATION. THEREFORE, IT WOULD APPEAR THAT SUCH CONTRACTS ARE NOT WITHIN THE PROVISIONS OF THE ACT AND NO PAYMENT BOND IN CONNECTION THEREWITH IS REQUIRED, IRRESPECTIVE OF THE AMOUNT OF THE CONTRACT.

WHAT WAS SAID THERE WITH RESPECT TO THE APPLICATION OF THE MILLER ACT (ACT OF AUGUST 24, 1935) IS EQUALLY APPLICABLE TO THE BACON-DAVIS ACT AND THE CONTRACTS HERE CONSIDERED. THAT IS, WHILE CLEARING OF RIGHTS-OF-WAY FOR TRANSMISSION LINES MIGHT BE CONSIDERED AS A "PUBLIC WORK" THE CONTRACTS UNDER CONSIDERATION ARE NOT CONTRACTS FOR CLEARING RIGHTS-OF- WAY, THEY ARE CONTRACTS FOR RENTAL OF EQUIPMENT. THE SAID STATUTES RELATE TO CONTRACTS FOR CONSTRUCTION OF PUBLIC BUILDINGS AND PUBLIC WORKS AND NOT TO CONTRACTS IN CONNECTION WITH OR INCIDENTAL TO THE CONSTRUCTION OF PUBLIC BUILDINGS AND PUBLIC WORKS. HAD THE CONGRESS INTENDED THE STATUTE TO APPLY TO CONTRACTS IN CONNECTION WITH OR INCIDENTAL TO THE CONSTRUCTION OF PUBLIC WORKS, PRESUMABLY IT WOULD HAVE SO FRAMED THE LEGISLATION; AND SINCE IT DID NOT, NEITHER THIS OFFICE NOR THE ADMINISTRATIVE OFFICES OF THE GOVERNMENT MAY, BY INTERPRETATION, INCLUDE CONTRACTS WITHIN THE PURVIEW OF THE STATUTES WHICH THE CONGRESS ITSELF CLEARLY DID NOT INCLUDE.

THAT THE INCLUSION OF THE PROVISIONS OF THE BACON-DAVIS AND MILLER ACTS IN SUCH CONTRACTS RESULTS IN AN INCREASED COST TO THE UNITED STATES CAN HARDLY BE QUESTIONED. IN ADDITION TO THE REQUIREMENT FOR THE PAYMENT OF PREVAILING WAGES THE CONTRACTOR IS TO FURNISH A PAYMENT BOND FOR THE PROTECTION OF A VERY SMALL PERSONNEL, POSSIBLY BUT ONE OR TWO EMPLOYEES. OBVIOUSLY, THE COST OF THE BOND PREMIUM IS ULTIMATELY BORNE BY THE UNITED STATES. AND YET, THE CONTRACTS NOT BEING CONTRACTS FOR THE CONSTRUCTION OF "PUBLIC WORKS," THE EMPLOYEE OR EMPLOYEES WHOM THE BOND WAS INTENDED TO PROTECT WOULD BE WITHOUT A REMEDY UNDER SUCH A BOND. SEE, IN THIS CONNECTION, MAIATICO CONST. CO. V. UNITED STATES, SUPRA, WHEREIN IT WAS HELD THAT A GOVERNMENT CONTRACT FOR CONSTRUCTION OF BUILDINGS AT HOWARD UNIVERSITY WAS NOT A CONTRACT FOR CONSTRUCTION OF " PUBLIC BUILDINGS" BECAUSE THE BUILDINGS DID NOT BELONG TO THE UNITED STATES AND THAT, CONSEQUENTLY, THE LABORERS AND MECHANICS HAD NO REMEDY UNDER THE BOND FURNISHED BY THE CONTRACTOR PURSUANT TO THE HEARD ACT, IT BEING STATED THAT---

HOLDING, AS WE DO, THESE VIEWS, WE ARE OBLIGED TO HOLD THAT PLAINTIFFS HAD NO CASE ON THE BOND TAKEN BY THE SECRETARY OF THE INTERIOR. THAT OFFICIAL MIGHT HAVE TAKEN ANOTHER AND DIFFERENT BOND UNDER WHICH APPELLEES COULD HAVE CLAIMED PROTECTION, OR HE MIGHT HAVE TAKEN NO BOND AT ALL, OR APPELLEES MIGHT HAVE TAKEN MEANS TO PROTECT THEMSELVES; BUT IN THE CIRCUMSTANCES WE HAVE DETAILED THERE WAS NO AUTHORITY IN THE SECRETARY TO TAKE A BOND UNDER THE PROVISIONS OF THE HEARD ACT. AND THE FACT THAT HE DID WILL NOT OF ITSELF ENTITLE APPELLEES TO SUE UPON IT. IF THE BOND WAS NOT ONE OF THE NATURE CONTEMPLATED BY THE STATUTE, NO RIGHTS ACCRUED TO APPELLEES FOR THE REASON THAT IN SUCH CASE THE ACT WOULD NOT AUTHORIZE ITS EXECUTION. THE SAME RESULT FOLLOWS IF IT BE CONSIDERED A COMMON-LAW BOND, FOR AT COMMON LAW AN OBLIGATION TO WHICH ONE IS NEITHER PARTY NOR PRIVY FURNISHES NO PROTECTION TO SUCH A ONE. IN ORDER TO MAINTAIN THIS ACTION, PLAINTIFFS MUST HAVE BEEN ENGAGED IN WORK WITHIN THE PROVISIONS OF THE ACT; THAT IS TO SAY, THEY MUST HAVE BEEN FURNISHING LABOR AND MATERIALS IN THE CONSTRUCTION OF A PUBLIC BUILDING OR PUBLIC WORK BELONGING TO THE UNITED STATES OR A PUBLIC WORK IN WHICH THE UNITED STATES ARE EXERCISING A CONSTITUTIONAL PARAMOUNT POWER--- AS IN THE IMPROVEMENT OF THE NAVIGABLE WATERWAYS OF THE COUNTRY.

IN VIEW OF THE FOREGOING IT MUST BE HELD THAT EQUIPMENT RENTAL CONTRACTS, WITH OPERATORS, SUCH AS THOSE UNDER CONSIDERATION, ARE NOT CONTRACTS "FOR CONSTRUCTION, ALTERATION, AND/OR REPAIR, INCLUDING PAINTING AND DECORATING, OF PUBLIC BUILDINGS OR PUBLIC WORKS OF THE UNITED STATES" AND CONSEQUENTLY ARE NOT WITHIN THE PURVIEW OF THE BACON - DAVIS AND MILLER ACTS. IN VIEW OF THE ADMINISTRATIVE MISUNDERSTANDING IN THE MATTER NO FURTHER QUESTION WILL BE RAISED IN THIS RESPECT TO SUCH CONTRACTS HERETOFORE EXECUTED BUT ALL SUCH EQUIPMENT RENTAL CONTRACTS HEREAFTER ENTERED INTO SHOULD BE IN ACCORDANCE HEREWITH.