A-67190, A-67191, DECEMBER 19, 1935, 15 COMP. GEN. 542

A-67190, A-67191, DECEMBER 19, 1935, 15 COMP. GEN. 542

FEDERAL PRISON-MADE GOODS - PURCHASES OF SIMILAR ITEMS COMMERCIALLY - CERTIFICATES OF CLEARANCE CERTIFICATES OF CLEARANCE FROM THE FEDERAL PRISON INDUSTRIES, INC., PRIOR TO MAKING PURCHASES PAYABLE FROM THE APPROPRIATION MADE IN THE EMERGENCY RELIEF APPROPRIATION ACT OF 1935 OF ARTICLES SUCH AS PRODUCED BY THE RESPECTIVE PENITENTIARIES ARE NOT REQUIRED TO BE OBTAINED BY ANY OF THE RESPECTIVE DEPARTMENTS AND ESTABLISHMENTS OF THE GOVERNMENT.

COMPTROLLER GENERAL MCCARL TO THE PRESIDENT, FEDERAL PRISON INDUSTRIES, INC., DECEMBER 19, 1935:

THERE HAS BEEN RECEIVED YOUR LETTER OF NOVEMBER 25, 1935, AS FOLLOWS:

PLEASE PERMIT ME TO REFER TO YOUR DECISION OF NOVEMBER 9, 1935, A 67191, AND YOUR DECISION OF NOVEMBER 15, A-67190, WHEREIN YOU ADVISE THE CHIEF OF FINANCE OF THE ARMY WITH REFERENCE TO THE PROCUREMENT OF SUPPLIES MANUFACTURED IN THE FEDERAL PENAL AND CORRECTIONAL INSTITUTIONS OF THE UNITED STATES, UNDER AUTHORITY OF THE ACTS OF CONGRESS APPROVED MAY 27, 1930, AND JUNE 23, 1934, AND EXECUTIVE ORDER NO. 6917 OF DECEMBER 11, 1934.

SOME QUESTION HAS ARISEN AMONG THE VARIOUS DEPARTMENTS AS TO HOW THESE DECISIONS SHOULD BE INTERPRETED AND THE DIRECTOR OF PROCUREMENT HAS SUBMITTED INFORMALLY TO THIS OFFICE A PROPOSED CIRCULAR LETTER WHICH READS AS FOLLOWS:

"REFERENCE IS MADE TO THE EMERGENCY RELIEF APPROPRIATION ACT OF 1935, APPROVED APRIL 8, 1935, AND TO SECTION 11 (A) OF EXECUTIVE ORDER NO. 7034, WHICH DIRECTS:

" "THE SECRETARY OF THE TREASURY * * * (2) THROUGH THE DIRECTOR OF PROCUREMENT, TO PURCHASE, OR PROVIDE A SYSTEM FOR THE PURCHASE OF ALL MATERIALS, SUPPLIES, AND EQUIPMENT TO BE PROCURED WITH THE SAID FUNDS.'

"ON AUGUST 12, 1935, THIS DIVISION ISSUED A CIRCULAR TO ITS STATE PROCUREMENT OFFICERS (BULLETIN S.P.O. NO. 13), TO THE EFFECT THAT NO MATERIALS, SUPPLIES, OR EQUIPMENT MANUFACTURED OR PRODUCED BY CONVICT LABOR MAY BE PURCHASED WITH FUNDS APPROPRIATED BY THE SAID ACT.

"THE SAID BULLETIN WAS ISSUED PURSUANT TO CLEARANCE BY FEDERAL PRISON INDUSTRIES, INC., AUTHORIZING THE PURCHASE BY THE PROCUREMENT DIVISION OF THE TREASURY DEPARTMENT OF ANY ITEMS PAID FOR FROM SAID FUNDS WITHOUT REFERENCE TO SAID CORPORATION.

"THE CLEARANCE FROM FEDERAL PRISON INDUSTRIES, INC., DID NOT EXTEND TO OTHER DEPARTMENTS; AND IT IS THE PURPOSE OF THIS CIRCULAR TO CORRECT THE IMPRESSION THAT THE BULLETIN AFFECTED PURCHASES BY OTHERS THAN THE PROCUREMENT DIVISION.'

WE HAVE SUGGESTED AN ADDITIONAL PARAGRAPH TO THIS CIRCULAR TO THE FOLLOWING GENERAL EFFECT: PROVISION IN THE EMERGENCY RELIEF ACT OF 1935 ABSOLUTELY PROHIBITING THE USE OF THESE FUNDS FOR THE PROCUREMENT OF SUPPLIES MANUFACTURED IN FEDERAL PENAL AND CORRECTIONAL INSTITUTIONS. THEREFORE, THE SEVERAL GOVERNMENT DEPARTMENTS AND AGENCIES SHOULD CONTINUE TO SECURE WAIVERS OR RELEASES FROM THE FEDERAL PRISON INDUSTRIES FOR THE PURCHASE FROM EMERGENCY RELIEF APPROPRIATION FUNDS FOR MATERIAL FROM PRIVATE SOURCES THAT THE FEDERAL PRISON INDUSTRIES, INC., ARE EQUIPPED TO SUPPLY. THE FEDERAL PRISON INDUSTRIES, INC., HAS ASSURED THIS OFFICE IT IS THEIR DESIRE TO COOPERATE FULLY WITH THE PURPOSES OF THE EMERGENCY RELIEF APPROPRIATION ACT OF 1935 AS INDICATED THEREIN AND ACCORDINGLY WILL GRANT WAIVERS OR CLEARANCES WHERE THE PRIMARY OBJECTIVE OF EXPENDITURES FROM EMERGENCY RELIEF APPROPRIATION FUNDS IS TO PROVIDE RELIEF OF UNEMPLOYMENT OR ACCELERATION OF PRIVATE INDUSTRY, OR WHERE IT IS THE DECISION OF THE PROCURING OFFICER THAT THE MATERIAL SHOULD BE PURCHASED FROM PRIVATE SOURCES FOR ANY OTHER SATISFACTORY REASON.'

WHILE WE FEEL THAT THE STATUTORY PROVISION AUTHORIZING THE SECRETARY OF THE TREASURY TO PROVIDE A SYSTEM FOR THE PURCHASE OF MATERIALS FROM E.R.A. FUNDS DOES NOT EMPOWER HIM TO SET ASIDE EXISTING SPECIFIC STATUTES ON WHICH THE E.R.A. LAW IS SILENT, WE WOULD RAISE NO OBJECTION TO THE FOREGOING CIRCULAR IF AMENDED SUBSTANTIALLY AS INDICATED.

IT IS CONTRARY TO THE PRESENT POLICY OF OUR BOARD OF DIRECTORS TO REQUEST THE DEPARTMENTS TO PLACE WITH THIS CORPORATION ORDERS FOR SUPPLIES WHEN THE PURCHASE IS CLEARLY INTENDED TO PROVIDE RELIEF OR ACCELERATE PRIVATE BUSINESS. FOR THIS REASON A GENERAL CLEARANCE WAS GRANTED TO THE PROCUREMENT DIVISION, AND HEREAFTER CLEARANCES FOR MAJOR PURCHASES INTENDED TO RELIEVE UNEMPLOYMENT WILL BE GIVEN WHENEVER REQUESTED.

IT IS BELIEVED THAT THE SAME PROCEDURE SUBSTANTIALLY SHOULD BE CONTINUED, AND IT IS OUR BELIEF THAT THIS WOULD AVOID DELAYING THE NORMAL FUNCTIONING OF THE DEPARTMENTS AND CONFUSING FIELD OFFICERS. THE PURPORT OF THE SUGGESTED PARAGRAPH SHOULD, THEREFORE, WE FEEL, BE INCLUDED IN THE CIRCULAR, AND EXECUTIVE DEPARTMENTS AND AGENCIES BE REQUESTED TO SUBMIT EACH SPECIFIC CASE TO THIS OFFICE FOR DECISION WHEREVER THERE IS ANY DOUBT AS TO THE PROPRIETY OF PROCURING THE GOODS FROM THE FEDERAL PRISON SYSTEM.

IT IS FEARED, ALSO, THAT THOSE AGENCIES OF THE GOVERNMENT WHICH HAVE RECEIVED ALLOTMENTS FROM W.P.A. FUNDS TO AUGMENT THEIR REGULAR APPROPRIATIONS WILL BE CONFUSED AND DELAYED IF THEY ARE REQUIRED TO PURCHASE A PORTION OF THEIR REQUIREMENTS FOR A PARTICULAR COMMODITY FROM THIS CORPORATION AS NOW REQUIRED BY LAW, AND A PORTION OF THE SAME COMMODITY FROM PRIVATE INDUSTRY. MOREOVER, FIELD OFFICERS OF CERTAIN OF THE AGENCIES OF THE GOVERNMENT WHO HAVE BEEN ALLOCATED SOME OF THESE FUNDS ARE SO REMOTE FROM HEADQUARTERS OR SO SMALL THAT IT IS DIFFICULT TO INSTRUCT THEM IN TWO VARYING METHODS OF PURCHASING PROCEDURE AND IT IS, THEREFORE, BELIEVED THAT THEY SHOULD BE PERMITTED WHEREVER THEY DESIRE, TO FOLLOW THE METHODS APPLYING TO REGULAR APPROPRIATIONS.

WE WOULD APPRECIATE IT IF YOU WOULD ADVISE US WHETHER YOU SEE ANY OBJECTION TO THE ISSUANCE OF THE PROPOSED CIRCULAR, AS AMENDED, BY THE PROCUREMENT DIVISION.

THE APPROPRIATION MADE BY THE EMERGENCY RELIEF APPROPRIATION ACT OF APRIL 8, 1935, PROVIDED FUNDS "TO PROVIDE RELIEF, WORK RELIEF, AND TO INCREASE EMPLOYMENT BY PROVIDING FOR USEFUL JECTS.' IT IS PROVIDED IN SECTION 8 OF SAID ACT THAT "WHENEVER PRACTICABLE IN THE CARRYING OUT OF THE PROVISIONS OF THIS JOINT RESOLUTION, FULL ADVANTAGE SHALL BE TAKEN OF THE FACILITIES OF PRIVATE ENTERPRISE.' THERE WOULD, OF COURSE, BE NO AUTHORITY IN THE SECRETARY OF THE TREASURY, THE DIRECTOR OF PROCUREMENT, OR ANY OTHER OFFICER OF THE GOVERNMENT TO ESTABLISH PURSUANT TO THE ACT OF APRIL 8, 1935, A SYSTEM OF PURCHASE THAT IN ITS APPLICATION WOULD NULLIFY EXISTING LAWS AND REGULATIONS GOVERNING MATTERS SUCH AS SECTION 3709, SECTION 3744 AND OTHER SECTIONS OF THE REVISED STATUTES. HOWEVER, THE FUNDS IN QUESTION ARE FUNDS WHICH HAVE BEEN ALLOCATED OR ARE TO BE ALLOCATED FROM THE APPROPRIATION MADE IN THE EMERGENCY RELIEF APPROPRIATION ACT OF 1935 "TO PROVIDE RELIEF, WORK RELIEF, AND TO INCREASE EMPLOYMENT BY PROVIDING FOR USEFUL PROJECTS" AND TO REQUIRE PURCHASE OF ARTICLES AND SUPPLIES MANUFACTURED IN FEDERAL PRISONS WOULD PROVIDE EMPLOYMENT FOR THE INMATES THEREOF, BUT WOULD NEITHER PROVIDE WORK RELIEF NOR INCREASE EMPLOYMENT--- THE MAJOR PURPOSE OF THE STATUTE--- NOR BE IN HARMONY WITH THE PROVISIONS OF SECTION 8 OF THE SAID ACT AS TO TAKING ADVANTAGE OF THE FACILITIES OF PRIVATE ENTERPRISE. THEREFORE, THE MAKING OF SUCH PURCHASES WOULD APPEAR TO BE OUT OF LINE WITH THE PURPOSES FOR WHICH THE SAID APPROPRIATION WAS MADE. ACCORDINGLY, IT WILL NOT BE NECESSARY TO OBTAIN A CERTIFICATE OF CLEARANCE FROM THE FEDERAL PRISON INDUSTRIES, INCORPORATED, PRIOR TO MAKING PURCHASES OF ARTICLES SUCH AS PRODUCED BY THE RESPECTIVE FEDERAL PENITENTIARIES. THIS APPLIES NOT ONLY TO PURCHASES MADE BY AND UNDER THE SYSTEM ESTABLISHED BY THE DIRECTOR OF PROCUREMENT PURSUANT TO SECTION 11 (A), EXECUTIVE ORDER NO. 7034, MAY 6, 1935, BUT TO ALL PURCHASES MADE BY THE RESPECTIVE DEPARTMENTS AND ESTABLISHMENTS OF THE GOVERNMENT, PAYMENT FOR WHICH IS TO BE MADE FROM FUNDS ALLOCATED FROM THE APPROPRIATION MADE IN THE SAID EMERGENCY RELIEF APPROPRIATION ACT OF 1935, SUPRA.

ACCORDINGLY, IN SPECIFIC ANSWER TO THE QUESTION SUBMITTED I HAVE TO ADVISE THAT THERE APPEARS NO AUTHORITY OF LAW FOR THE ISSUANCE OF THE PROPOSED CIRCULAR, AS AMENDED.