A-90983, MARCH 7, 1938, 17 COMP. GEN. 700

A-90983, MARCH 7, 1938, 17 COMP. GEN. 700

CONTRACTS - SPECIFICATIONS - INCLUSION OF PAY-ROLL STATISTICS, COST OF MATERIALS, ETC., REQUIREMENTS - REJECTION OF LOW BID BECAUSE OF BIDDER'S REFUSAL OF COMPLIANCE THE DELETION, BY A BIDDER, FROM ADVERTISED CONSTRUCTION CONTRACT SPECIFICATIONS, OF THE PROVISIONS OF PROCUREMENT DIVISION CIRCULAR LETTER NO. 45, DATED JULY 19, 1934, RELATIVE TO THE REPORTING OF PAY ROLL STATISTICS, COST OF MATERIALS, ETC., MAY NOT BE MADE THE BASIS OF REJECTION OF AN OTHERWISE ACCEPTABLE LOW BID, BUT AS THE DATA SOUGHT TO BE OBTAINED BY THE INCLUSION OF THE SAID PROVISIONS IS FOR AN AUTHORIZED USE BY THE GOVERNMENT, NO OBJECTION IS REQUIRED TO A PROCEDURE UNDER WHICH GOVERNMENT CONTRACTORS ARE REQUESTED--- BUT NOT REQUIRED--- TO FURNISH THE DESIRED MONTHLY REPORTS. 17 COMP. GEN. 585, AMPLIFIED, AND 15 ID. 201, DISTINGUISHED.

ACTING COMPTROLLER GENERAL ELLIOTT TO THE SECRETARY OF THE TREASURY, MARCH 7, 1938:

YOUR LETTER OF FEBRUARY 14, 1938, IS AS FOLLOWS:

THIS DEPARTMENT'S ATTENTION HAS BEEN INVITED TO YOUR LETTER OF JANUARY 21, 1938, A-90983, TO THE SECRETARY OF COMMERCE, CONCERNING THE FOLLOWING PROVISION SET FORTH IN PROCUREMENT DIVISION CIRCULAR LETTER NO. 45, DATED JULY 19, 1934, FOR INCLUSION IN ALL FORMAL CONTRACTS FOR GOVERNMENT CONSTRUCTION WORK:

"THE CONTRACTOR WILL REPORT MONTHLY, AND WILL CAUSE ALL SUBCONTRACTORS TO REPORT IN LIKE MANNER, WITHIN FIVE DAYS AFTER THE CLOSE OF EACH CALENDAR MONTH, ON FORMS TO BE FURNISHED BY THE DEPARTMENT OF LABOR, THE NUMBER OF PERSONS ON THEIR RESPECTIVE PAY ROLLS, THE AGGREGATE AMOUNT OF SUCH PAY ROLLS, THE MAN HOURS WORKED, AND THE TOTAL EXPENDITURES FOR MATERIALS. SHALL FURNISH TO THE DEPARTMENT OF LABOR THE NAMES AND ADDRESSES OF ALL SUBCONTRACTORS ON THE WORK AT THE EARLIEST DATE PRACTICABLE, PROVIDED THAT THE FOREGOING SHALL BE APPLICABLE ONLY TO WORK AT THE SITE OF THE CONSTRUCTION PROJECT.'

YOU INDICATE THAT THE INCLUSION OF SUCH A PROVISION NECESSARILY TENDS TO RESULT IN THE SUBMISSION OF HIGHER BIDS, BASED UPON CONTEMPLATED EXPENSE INCIDENT TO COMPLIANCE THEREWITH, OR TO RESTRICT COMPETITION, AND THAT "THE INSERTION OF SUCH A PROVISION IN A CONTRACT IS NOT AUTHORIZED UNLESS THERE EXISTS SPECIFIC STATUTORY AUTHORIZATION THEREFOR.'

THE SAID PROVISION WAS PRESCRIBED AS A STANDARD FORM OF CONTRACT STIPULATION, PURSUANT TO EXECUTIVE ORDER NO. 6166, OF JUNE 10, 1933, AUTHORIZING THE CREATION OF THE PROCUREMENT DIVISION. THERE IS ATTACHED FOR YOUR INFORMATION A COPY OF REGULATIONS GOVERNING THE OPERATION OF THE PROCUREMENT DIVISION, BRANCH OF SUPPLY, DATED FEBRUARY 12, 1934 (IN EFFECT WHEN SAID CIRCULAR LETTER WAS ISSUED), YOUR PARTICULAR ATTENTION BEING INVITED TO SECTION D THEREOF, ENTITLED ,FEDERAL CONTRACT BOARD.' THE CONTRACT STIPULATION IN QUESTION IS A STANDARD FORM TO BE INCLUDED IN THE CONTRACTS REFERRED TO IN CIRCULAR LETTER NO. 45, TO THE SAME EXTENT AS THE CONTRACT STIPULATIONS INCLUDED IN THE PRINTED STANDARD FORMS, AND THE STIPULATION HAS BEEN SO REGARDED BY, AND INCLUDED AS A PART OF ALL FORMAL CONSTRUCTION CONTRACTS OF, THE SEVERAL DEPARTMENTS AND ESTABLISHMENTS OF THE GOVERNMENT FOR MORE THAN THREE AND ONE-HALF YEARS.

IN THIS CONNECTION YOUR ATTENTION IS INVITED TO PROCUREMENT DIVISION CIRCULAR LETTER NO. 89 DATED MAY 8, 1935, CONTAINING A "CONTRACT PROVISION FOR COMPLIANCE WITH A.A.A.' PRESCRIBED FOR INCLUSION BY THE DEPARTMENTS AND ESTABLISHMENTS OF THE GOVERNMENT AS A PART OF ALL CONTRACTS FOR THE PURCHASE OF FLUID MILK AND THE PRODUCTS THEREOF. IT WILL BE NOTED THAT THIS CIRCULAR LETTER IS IN FORM SIMILAR TO CIRCULAR LETTER NO. 45, AND THE CONTRACT PROVISION WAS PROMULGATED IN ACCORDANCE WITH THE RECOMMENDATION OF THE SECRETARY OF AGRICULTURE, AND PURSUANT TO EXECUTIVE ORDER NO. 6166, AND THE REGULATIONS GOVERNING THE OPERATION OF THE PROCUREMENT DIVISION, BRANCH OF SUPPLY. THE CONTRACT PROVISION FOR COMPLIANCE WITH A.A.A. IS ALSO A STANDARD FORM FOR INCLUSION AS A PART OF THE ABOVE-MENTIONED CONTRACTS, ALTHOUGH NOT INCLUDED IN THE PRINTED STANDARD FORMS. IN THIS CONNECTION REFERENCE IS MADE TO DECISION OF THE COMPTROLLER GENERAL DATED SEPTEMBER 12, 1935, NO. A-64860, TO THE ADMINISTRATOR OF VETERANS' AFFAIRS, TO THE EFFECT THAT THE ELIMINATION, IN SUBMISSION OF A BID, OF THIS CONTRACT PROVISION FOR COMPLIANCE WITH A.A.A. JUSTIFIED REJECTION OF THE BID.

WITH RESPECT TO YOUR SUGGESTION THAT THE INCLUSION IN CONTRACTS OF THE PROVISION SET FORTH IN CIRCULAR NO. 45 TENDS TO RESULT IN THE SUBMISSION OF HIGHER BIDS OR TO RESTRICT COMPETITION, IT DOES NOT APPEAR THAT THERE HAS BEEN ANY SUCH INCREASE IN BID PRICES OR RESTRICTION OF COMPETITION DURING THE LONG PERIOD OF TIME THIS PROVISION HAS BEEN IN USE. UNTIL THE QUESTION WAS RAISED BY THE TIETJEN AND LANG DRYDOCK COMPANY IN CONNECTION WITH BIDS RECEIVED BY THE DEPARTMENT OF COMMERCE REFERRED TO IN YOUR SAID LETTER OF JANUARY 21, 1938, THERE IS NO RECORD OF A PROTEST BY ANY PROSPECTIVE BIDDER, AND IT IS UNDERSTOOD THAT SINCE CONTRACTORS ARE REQUIRED TO MAINTAIN RECORDS TO ENABLE THEM TO COMPLY WITH OTHER REQUIREMENTS OF THE STATES AND THE FEDERAL GOVERNMENT, AND SINCE THE FORMS ON WHICH THE REPORTS ARE SUBMITTED ARE FURNISHED BY THE GOVERNMENT, CONTRACTORS CONSIDER THAT THE EXPENSE INCIDENT TO COMPLIANCE WITH THE CONTRACT PROVISION IS NEGLIGIBLE AND NOT SUFFICIENT TO JUSTIFY ANY ADDITIONAL AMOUNTS IN THEIR BIDS ON ACCOUNT THEREOF. BUT ASSUMING THAT THERE MIGHT BE SOME SLIGHT INCREASE IN BID PRICES TO THE CONTRACTING AGENCIES, THE AGGREGATE OF SUCH INCREASED PRICES WOULD REPRESENT A VERY SMALL PERCENTAGE OF THE SAVING TO THE GOVERNMENT WHICH RESULTS FROM OBTAINING THE STATISTICAL DATA REQUIRED BY THE SECRETARY OF LABOR.

THIS STATISTICAL DATA HAS BEEN OF INCALCULABLE VALUE TO THE LEGISLATIVE AND EXECUTIVE BRANCHES OF THE GOVERNMENT IN DETERMINING POLICY WITH RESPECT TO ALLOCATING AND APPROPRIATING FOR PUBLIC WORKS PROJECTS.

IN AN AMENDMENT TO THE ORGANIC ACT CREATING THE BUREAU OF LABOR STATISTICS (JULY 7, 1930, C. 873, 46 STAT. 1019), THE CONGRESS HAS STATED THAT THE BUREAU OF LABOR STATISTICS SHALL COLLECT, COLLATE, REPORT, AND PUBLISH AT LEAST ONCE EACH MONTH FULL AND COMPLETE STATISTICS OF THE VOLUME OF AND CHANGES IN EMPLOYMENT, AS INDICATED BY THE NUMBER OF PERSONS EMPLOYED, THE TOTAL WAGES PAID, AND THE TOTAL HOURS OF EMPLOYMENT, IN THE SERVICE OF THE FEDERAL GOVERNMENT THE STATES AND POLITICAL SUBDIVISIONS THEREOF, AND IN THE FOLLOWING INDUSTRIES AND THEIR PRINCIPAL BRANCHES: (1) MANUFACTURING; (2) MINING, QUARRYING, AND CRUDE PETROLEUM PRODUCTION; (3) BUILDING CONSTRUCTION; (4) AGRICULTURE AND LUMBERING; (5) TRANSPORTATION, COMMUNICATION, AND OTHER PUBLIC UTILITIES; (6) THE RETAIL AND WHOLESALE TRADES; AND SUCH OTHER INDUSTRIES AS THE SECRETARY OF LABOR MAY DEEM IT IN THE PUBLIC INTEREST TO INCLUDE.

IT WAS PURSUANT TO THIS LEGISLATION THAT THE SECRETARY OF LABOR ASKED THAT THE CONTRACT PROVISION CONTAINED IN CIRCULAR LETTER NO. 45 BE INCLUDED IN FORMAL CONSTRUCTION CONTRACTS, AND THE SECRETARY OF THE TREASURY CONSIDERS THAT SUCH A PROVISION IS AUTHORIZED UNDER THE AFOREMENTIONED STATUTES AND EXECUTIVE ORDER, AND THAT THE ENFORCEMENT THEREOF EFFECTS A VERY SUBSTANTIAL SAVING OF ADMINISTRATIVE COST TO THE FEDERAL GOVERNMENT AND FACILITATES THE PROSECUTION OF ITS PUBLIC WORKS PROGRAM.

IN THE LIGHT OF THE FOREGOING, THIS DEPARTMENT HAS CONCLUDED THAT THERE IS AUTHORITY FOR THE INCLUSION IN FORMAL CONSTRUCTION CONTRACTS OF THE STANDARD CONTRACT PROVISION SET FORTH IN PROCUREMENT DIVISION CIRCULAR LETTER NO. 45 AND THEREFORE THAT ITS ELIMINATION IN THE SUBMISSION OF A BID IS AN INFORMALITY WHICH MAY NOT BE WAIVED EXCEPT UPON AUTHORIZATION BY THE DIRECTOR OF PROCUREMENT WITH THE APPROVAL OF THE SECRETARY OF THE TREASURY, AS A DEVIATION. IT IS RESPECTFULLY REQUESTED THAT YOU FURNISH THIS DEPARTMENT WITH AN EXPRESSION OF YOUR VIEWS CONCERNING THIS CONCLUSION.

THE ACT OF JULY 7, 1930, 46 STAT. 1019, MENTIONED IN YOUR QUOTED LETTER AS THE BASIS FOR THE REQUEST OF THE SECRETARY OF LABOR THAT THE REQUIREMENT HERE INVOLVED BE INSERTED IN GOVERNMENT CONTRACTS PROVIDES:

THE BUREAU OF LABOR STATISTICS SHALL ALSO COLLECT, COLLATE, REPORT, AND PUBLISH AT LEAST ONCE EACH MONTH FULL AND COMPLETE STATISTICS OF THE VOLUME OF AND CHANGES IN EMPLOYMENT, AS INDICATED BY THE NUMBER OF PERSONS EMPLOYED, THE TOTAL WAGES PAID, AND THE TOTAL HOURS OF EMPLOYMENT, IN THE SERVICE OF THE FEDERAL GOVERNMENT, THE STATES AND POLITICAL SUBDIVISIONS THEREOF, AND IN THE FOLLOWING INDUSTRIES AND THEIR PRINCIPAL BRANCHES: (1) MANUFACTURING; (2) MINING, QUARRYING, AND CRUDE PETROLEUM PRODUCTION; (3) BUILDING CONSTRUCTION; (4) AGRICULTURE AND LUMBERING; (5) TRANSPORTATION, COMMUNICATION, AND OTHER PUBLIC UTILITIES; (6) THE RETAIL AND WHOLESALE TRADES; AND SUCH OTHER INDUSTRIES AS THE SECRETARY OF LABOR MAY DEEM IT IN THE PUBLIC INTEREST TO INCLUDE. SUCH STATISTICS SHALL BE REPORTED FOR ALL SUCH INDUSTRIES AND THEIR PRINCIPAL BRANCHES THROUGHOUT THE UNITED STATES AND ALSO BY STATES AND/OR FEDERAL RESERVE DISTRICTS AND BY SUCH SMALLER GEOGRAPHICAL SUBDIVISIONS AS THE SAID SECRETARY MAY FROM TIME TO TIME PRESCRIBE. THE SAID SECRETARY IS AUTHORIZED TO ARRANGE WITH ANY FEDERAL, STATE, OR MUNICIPAL BUREAU OR OTHER GOVERNMENTAL AGENCY FOR THE COLLECTION OF SUCH STATISTICS IN SUCH MANNER AS HE MAY DEEM SATISFACTORY, AND MAY ASSIGN SPECIAL AGENTS OF THE DEPARTMENT OF LABOR TO ANY SUCH BUREAU OR AGENCY TO ASSIST IN SUCH COLLECTION.

IT WILL BE NOTED THAT THE INFORMATION THUS REQUIRED TO BE COLLECTED AND REPORTED IS ONLY AS TO THE NUMBER OF PERSONS EMPLOYED, THE TOTAL WAGES PAID, AND THE TOTAL HOURS OF EMPLOYMENT, THERE BEING NO REQUIREMENT WHATEVER AS TO "EXPENDITURES FOR MATERIALS.' FURTHERMORE, THE ACT DOES NOT REQUIRE OR CONTEMPLATE THAT THE EMPLOYMENT DATA COLLECTED AND REPORTED BE SEGREGATED OR SHOWN WITH RESPECT TO INDIVIDUAL CONTRACTS. ON THE CONTRARY IT CLEARLY PROVIDES THAT--- ASIDE FROM EMPLOYMENTS IN THE SERVICE OF THE FEDERAL GOVERNMENT, THE STATES AND POLITICAL SUBDIVISIONS THEREOF, WHICH ARE NOT HERE INVOLVED -- THE INFORMATION IS TO BE COLLECTED AND REPORTED WITH RESPECT TO EACH OF THE VARIOUS INDUSTRIES INDICATED AND BY STATES OR SMALLER GEOGRAPHIC SUBDIVISIONS. HENCE, SAID STATUTE CANNOT BE REGARDED AS AUTHORIZING THE CONTRACT PROVISION HERE IN QUESTION. IT IS TO BE NOTED, ALSO, THAT STATUTE IMPOSES THE DUTY OF COLLECTING AND REPORTING THE EMPLOYMENT DATA THEREIN REFERRED TO UPON THE DEPARTMENT OF LABOR, AND THE ANNUAL APPROPRIATION "SALARIES AND EXPENSES, BUREAU OF LABOR STATISTICS" AS CONTAINED IN THE ACT OF JUNE 16, 1937, 50 STAT. 299, PROVIDES, FOR THE FISCAL YEAR ENDED JUNE 30, 1938, THE SUM OF $784,000 FOR EXPENDITURE BY THE DEPARTMENT OF LABOR FOR PERSONAL AND OTHER SERVICES INCIDENT TO THE COLLECTION OF MATERIALS FOR REPORTS. CONSEQUENTLY, THE SHIFTING OF ANY PART OF THE EXPENSE OF COLLECTING THE INFORMATION HERE INVOLVED TO APPROPRIATIONS MADE UNDER THE VARIOUS OTHER DEPARTMENTS AND ESTABLISHMENTS FOR PARTICULAR OBJECTS WOULD CONTRAVENE THE PROVISION OF SECTION 3678, REVISED STATUTES, WHICH READS:

ALL SUMS APPROPRIATED FOR THE VARIOUS BRANCHES OF EXPENDITURE IN THE PUBLIC SERVICE SHALL BE APPLIED SOLELY TO THE OBJECTS FOR WHICH THEY ARE RESPECTIVELY MADE, AND FOR NO OTHERS.

THE CONTRACT PROVISION HERE IN QUESTION, WHICH IS EXTRANEOUS TO THE OBJECTS OF A CONSTRUCTION CONTRACT, IS TO BE DISTINGUISHED FROM THE PROVISION INVOLVED IN THE CITED CASE--- A-64860, SEPTEMBER 12, 1935 (15 COMP. GEN. 201/--- IN THAT THE REQUIREMENT UPHELD IN THAT CASE WAS A REQUIREMENT THAT THE BIDDERS COMPLY WITH LAWS, OR AGREEMENTS HAVING THE FORCE OF LAWS, APPLICABLE TO THE CONTRACT THERE INVOLVED.

WITH REFERENCE TO THE CONTENTION THAT THE PROVISION HERE IN QUESTION IS FOR ENFORCEMENT AS A PROVISION IN A STANDARD FORM OF CONTRACT, IT IS NOTED THAT THE EVIDENCE BEFORE THIS OFFICE FAILS TO ESTABLISH THAT SAID PROVISION, AS CONTAINED IN PROCUREMENT CIRCULAR LETTER NO. 45, WAS EVER APPROVED BY THE SECRETARY OF THE TREASURY AS REQUIRED BY PARAGRAPH 4, SECTION D, REGULATIONS GOVERNING THE OPERATION OF THE PROCUREMENT DIVISION, BRANCH OF SUPPLY, DATED FEBRUARY 12, 1934. HOWEVER, EVEN IF SO APPROVED THE PROVISION WOULD STILL BE OPEN TO QUESTION.

THE ACT OF JUNE 17, 1910, 36 STAT. 468, 531, PROVIDED IN PART:

THAT HEREAFTER ALL SUPPLIES * * * FOR THE EXECUTIVE DEPARTMENTS AND OTHER GOVERNMENT ESTABLISHMENTS IN WASHINGTON, WHEN THE PUBLIC EXIGENCIES DO NOT REQUIRE THE IMMEDIATE DELIVERY OF THE ARTICLE, SHALL BE ADVERTISED AND CONTRACTED FOR BY THE SECRETARY OF THE TREASURY, INSTEAD OF BY THE SEVERAL DEPARTMENTS AND ESTABLISHMENTS, * * * THERE SHALL BE A GENERAL SUPPLY COMMITTEE IN LIEU OF THE BOARD PROVIDED FOR IN SECTION THIRTY-SEVEN HUNDRED AND NINE OF THE REVISED STATUTES, AS AMENDED, COMPOSED OF OFFICERS, ONE FROM EACH SUCH DEPARTMENT, * * * THE DUTIES OF WHICH COMMITTEES SHALL BE TO MAKE, UNDER THE DIRECTION OF THE SAID SECRETARY, AN ANNUAL SCHEDULE OF REQUIRED MISCELLANEOUS SUPPLIES, * * * AND TO AID SAID SECRETARY IN SOLICITING BIDS BASED UPON FORMULAS AND SPECIFICATIONS DRAWN UP BY SUCH EXPERTS IN THE SERVICE OF THE GOVERNMENT AS THE COMMITTEE MAY SEE FIT TO CALL UPON, WHO SHALL RENDER WHATEVER ASSISTANCE THEY MAY REQUIRE. * * *

SECTION 5 OF REGULATIONS RELATING TO THE MAKING OF CONTRACTS FOR MISCELLANEOUS SUPPLIES, ISSUED BY THE SECRETARY OF THE TREASURY OCTOBER 8, 1915, PURSUANT TO THE ABOVE ACT, PROVIDED:

THE GENERAL SUPPLY COMMITTEE IS AUTHORIZED TO CALL UPON EXPERTS IN THE GOVERNMENT SERVICE FOR ADVICE AND ASSISTANCE IN THE PREPARATION OF SPECIFICATIONS * * *.

THE SUPERINTENDENT OF SUPPLIES SHALL, UNDER DIRECTION OF THE SECRETARY OF THE TREASURY, SUPERVISE THE PREPARATION OF ALL GENERAL SUPPLY CONTRACTS, * * * OF COURSE, THE ABOVE-MENTIONED ACT AND REGULATION HAD NO APPLICATION WHATEVER TO CONSTRUCTION CONTRACTS.

BUDGET CIRCULAR NO. 47, ISSUED NOVEMBER 22, 1921, BY THE DIRECTOR OF THE BUREAU OF THE BUDGET, BY DIRECTION OF THE PRESIDENT, NOTIFIED THE HEADS OF DEPARTMENTS AND ESTABLISHMENTS, IN PART, AS FOLLOWS:

1. WITHOUT LIMITING IN ANY MANNER THE JURISDICTION OR AUTHORITY OF HEADS OF EXECUTIVE DEPARTMENTS AND INDEPENDENT ESTABLISHMENTS OVER THE SUBJECT MATTER OF GOVERNMENT CONTRACTS, AS THE SAME IS NOW DEFINED BY LAW, BUT FOR THE PURPOSE OF STANDARDIZING CONTRACT FORMS, SECURING THE ADOPTION OF UNIFORM POLICIES AS REGARDS CONSTRUCTION WORK AND UNIFORM PRACTICES OF INTERPRETATION AND NEGOTIATIONS BOTH PRECEDING AND FOLLOWING THE ACTUAL EXECUTION OF SUCH CONTRACTS; THERE IS HEREBY ESTABLISHED IN THE OFFICE OF THE CHIEF COORDINATOR, GENERAL SUPPLY, A BOARD TO BE KNOWN AS THE INTERDEPARTMENTAL BOARD OF CONTRACTS AND ADJUSTMENTS, THE MEMBERS AND FUNCTIONS OF WHICH BOARD SHALL BE AS FOLLOWS:

2. THE HEAD OF EACH EXECUTIVE DEPARTMENT, INCLUDING THE DEPARTMENT OF JUSTICE, SHALL ORGANIZE A DEPARTMENT BOARD MADE UP OF ONE REPRESENTATIVE OF EACH BUREAU HAVING THE INDEPENDENT RIGHT TO ENTER INTO CONTRACTS ON BEHALF OF THE UNITED STATES. SUCH DEPARTMENT BOARD SHALL RECOMMEND POLICIES TO CONTROL IN THE STANDARDIZATION OF CONTRACTS WITHIN SUCH DEPARTMENT. THEY SHALL CHOOSE FROM THEIR NUMBER A CHAIRMAN * * *

3. THE CHAIRMEN OF THE SEVERAL DEPARTMENT BOARDS, TOGETHER WITH A REPRESENTATIVE DESIGNATED BY THE HEAD OF ANY INDEPENDENT ESTABLISHMENT NOW AUTHORIZED BY LAW TO ENTER INTO IMPORTANT CONTRACTS, AND THE CHIEF COORDINATOR, GENERAL SUPPLY, SHALL CONSTITUTE THE INTERDEPARTMENTAL BOARD OF CONTRACTS AND ADJUSTMENTS, * * *

4. THIS BOARD SHALL BE PRESIDED OVER BY A CHAIRMAN WHO SHALL BE THE REPRESENTATIVE OF THE SECRETARY OF THE TREASURY. * * *

5. THE FUNCTIONS OF THIS BOARD SHALL BE:

FIRST, TO STANDARDIZE IN GENERAL, WHEREVER POSSIBLE, THE FORMS AND METHODS OF CONTRACT LETTING TO THE END THAT A UNIFORM POLICY ON THE PART OF THE GOVERNMENT MAY CONTROL THE MAKING OF SUCH CONTRACTS, AND WITH A FURTHER VIEW TO SUCH CHANGES IN THE FORM THEREOF AS WILL TEND TO ENLIST THE INTEREST OF THE CONTRACTOR ON BEHALF OF ECONOMY AND PROMPTNESS OF EXECUTION, AND ELIMINATE THOSE UNCERTAINTIES OF CONSTRUCTION AND HAZARDS TO BE ASSUMED BY THE CONTRACTOR WHICH HAVE HITHERTO OPERATED TO INCREASE THE COST OF GOVERNMENT WORK AND SUPPLIES.

SECOND, TO RECOMMEND GENERAL POLICIES IN THE SETTLEMENT OF OUTSTANDING OBLIGATIONS ARISING OUT OF CONTRACTS OF THE UNITED STATES, SUCH AS METHODS OF DETERMINING AND ENFORCING DAMAGES, OF SETTLING DISPUTES AS TO QUESTIONS OF FACT, AND OF DETERMINING THE FINAL COMPENSATION OF CONTRACTORS.

THE COMPTROLLER GENERAL OF THE UNITED STATES IN HIS ANNUAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 1926, STATED ON PAGE 19 THEREOF:

AS THE CONGRESS WILL DOUBTLESS BE INFORMED THE BUREAU OF THE BUDGET HAS BEEN ENGAGED IN SIMPLIFYING AND DRAFTING FOR SUBMISSION TO THE CONGRESS A UNIFORM CONTRACT LAW AND UNIFORM CONTRACT FORMS FOR THE USE OF ALL OF THE DEPARTMENTS AND ESTABLISHMENTS OF THE GOVERNMENT IN LIEU OF THE LEGION OF DIFFERENT FORMS IN USE THEREIN.

* * * AND WHEN THIS BOARD COMPLETES ITS WORK THE GOVERNMENT WILL DOUBTLESS HAVE, FOR THE FIRST TIME IN ITS HISTORY, CONTRACT FORMS WHICH ARE IN FACT SIMPLE ACCOUNTING FORMS AND WHICH WILL BE UNIFORM THROUGHOUT THE ADMINISTRATIVE DEPARTMENTS.

BY DIRECTION OF THE PRESIDENT THE DIRECTOR OF THE BUREAU OF THE BUDGET PROMULGATED FROM TIME TO TIME STANDARD CONTRACT FORMS WHICH HAD BEEN AGREED UPON BY THE INTERDEPARTMENTAL BOARD OF CONTRACTS AND ADJUSTMENTS, UNDER AUTHORITY OF BUDGET CIRCULAR NO. 47, SUPRA. WHILE NO UNIFORM CONTRACT LAW HAS AS YET BEEN ENACTED BY THE CONGRESS, THE PRESIDENT, PROCEEDING APPARENTLY ON THE THEORY OF IMPLIED POWER TO PRESCRIBE UNIFORM CONTRACT FORMS--- AS A NECESSARY INCIDENT TO THE EFFECTIVE EXERCISE AND DISCHARGE OF THE EXPRESS POWER TO CONTRACT ON BEHALF OF THE UNITED STATES, THROUGH HIS AUTHORIZED REPRESENTATIVES--- AND SUBJECT TO EXPRESSED AND LONG RECOGNIZED LEGISLATIVE RESTRICTIONS, APPROVED CERTAIN STANDARDIZED FORMS OF GOVERNMENT CONTRACTS, WHICH WERE LATER, FROM TIME TO TIME, REVISED BY THE BUREAU OF THE BUDGET WITH THE APPROVAL OF THE PRESIDENT.

BY ACT OF FEBRUARY 27, 1929, 45 STAT. 1341, THE FUNCTIONS OF THE GENERAL SUPPLY COMMITTEE WERE ENLARGED TO INCLUDE CERTAIN CONTRACTS FOR SUPPLIES FOR THE MUNICIPAL GOVERNMENT OF THE DISTRICT OF COLUMBIA AND THE FIELD SERVICES OF ANY DEPARTMENT OR ESTABLISHMENT,"WHEN REQUEST IS MADE BY THE HEAD THEREOF.'

SECTION 16 OF THE ACT OF MARCH 3, 1933, 47 STAT. 1517, IN AUTHORIZING REORGANIZATIONS WITHIN THE EXECUTIVE BRANCH OF THE GOVERNMENT, AMENDED TITLE IV OF PART II OF THE LEGISLATIVE APPROPRIATION ACT, FISCAL YEAR 1933, TO PROVIDE IN MATERIAL PART AS FOLLOWS:

SEC. 401. * * *

* * * THE PRESIDENT SHALL INVESTIGATE THE PRESENT ORGANIZATION OF ALL EXECUTIVE AND ADMINISTRATIVE AGENCIES OF THE GOVERNMENT AND SHALL DETERMINE WHAT CHANGES THEREIN ARE NECESSARY TO ACCOMPLISH THE FOLLOWING PURPOSES:

(A) TO REDUCE EXPENDITURES TO THE FULLEST EXTENT CONSISTENT WITH THE EFFICIENT OPERATION OF THE GOVERNMENT;

(B) TO INCREASE THE EFFICIENCY OF THE OPERATIONS OF THE GOVERNMENT TO THE FULLEST EXTENT PRACTICABLE WITHIN THE REVENUES;

(C) TO GROUP, COORDINATE, AND CONSOLIDATE EXECUTIVE AND ADMINISTRATIVE AGENCIES OF THE GOVERNMENT, AS NEARLY AS MAY BE, ACCORDING TO MAJOR PURPOSES;

(D) TO REDUCE THE NUMBER OF SUCH AGENCIES BY CONSOLIDATING THOSE HAVING SIMILAR FUNCTIONS UNDER A SINGLE HEAD, AND BY ABOLISHING SUCH AGENCIES AND/OR SUCH FUNCTIONS THEREOF AS MAY NOT BE NECESSARY FOR THE EFFICIENT CONDUCT OF THE GOVERNMENT;

(E) TO ELIMINATE OVERLAPPING AND DUPLICATION OF EFFORT; AND

(F) TO SEGREGATE REGULATORY AGENCIES AND FUNCTIONS FROM THOSE OF AN ADMINISTRATIVE AND EXECUTIVE CHARACTER.

POWER OF PRESIDENT

SEC. 403. WHENEVER THE PRESIDENT, AFTER INVESTIGATION, SHALL FIND AND DECLARE THAT ANY REGROUPING, CONSOLIDATION, TRANSFER, OR ABOLITION OF ANY EXECUTIVE AGENCY OR AGENCIES AND/OR THE FUNCTIONS THEREOF IS NECESSARY TO ACCOMPLISH ANY OF THE PURPOSES SET FORTH IN SECTION 401 OF THIS TITLE, HE MAY BY EXECUTIVE ORDER---

(A) TRANSFER THE WHOLE OR ANY PART OF ANY EXECUTIVE AGENCY AND/OR THE FUNCTIONS THEREOF TO THE JURISDICTION AND CONTROL OF ANY OTHER EXECUTIVE AGENCY;

(B) CONSOLIDATE THE FUNCTIONS VESTED IN ANY EXECUTIVE AGENCY; OR

(C) ABOLISH THE WHOLE OR ANY PART OF ANY EXECUTIVE AGENCY AND/OR THE FUNCTIONS THEREOF; AND

(D) DESIGNATE AND FIX THE NAME AND FUNCTIONS OF ANY CONSOLIDATED ACTIVITY OR EXECUTIVE AGENCY AND THE TITLE, POWERS, AND DUTIES OF ITS EXECUTIVE HEAD; EXCEPT THAT THE PRESIDENT SHALL NOT HAVE AUTHORITY UNDER THIS TITLE TO ABOLISH OR TRANSFER AN EXECUTIVE DEPARTMENT AND/OR ALL THE FUNCTIONS THEREOF.

SAVING PROVISIONS

SEC. 405. * * *

(C) ALL LAWS RELATING TO ANY EXECUTIVE AGENCY OR FUNCTION TRANSFERRED OR CONSOLIDATED WITH ANY OTHER EXECUTIVE AGENCY OR FUNCTION UNDER THE PROVISIONS OF THIS TITLE, SHALL, IN SO FAR AS SUCH LAWS ARE NOT INAPPLICABLE, REMAIN IN FULL FORCE AND EFFECT, AND SHALL BE ADMINISTERED BY THE HEAD OF THE EXECUTIVE AGENCY TO WHICH THE TRANSFER IS MADE OR WITH WHICH THE CONSOLIDATION IS EFFECTED.

SEE, ALSO, SECTIONS 407 AND 409 OF SAID ACT AS AMENDED BY TITLE III, ACT OF MARCH 20, 1933, 48 STAT. 16.

BY EXECUTIVE ORDER 6166, ISSUED JUNE 10, 1933, PURSUANT TO THE ABOVE ACT, AS AMENDED, IT WAS PROVIDED WITH RESPECT TO "PROCUREMENT" (SECTION 1), AS FOLLOWS:

THE FUNCTION OF DETERMINATION OF POLICIES AND METHODS OF PROCUREMENT, WAREHOUSING, AND DISTRIBUTION OF PROPERTY, FACILITIES, STRUCTURES, IMPROVEMENTS, MACHINERY, EQUIPMENT, STORES, AND SUPPLIES EXERCISED BY ANY AGENCY IS TRANSFERRED TO A PROCUREMENT DIVISION IN THE TREASURY DEPARTMENT, AT THE HEAD OF WHICH SHALL BE A DIRECTOR OF PROCUREMENT.

* * * THE GENERAL SUPPLY COMMITTEE OF THE TREASURY DEPARTMENT IS ABOLISHED.

IN RESPECT OF ANY KIND OF PROCUREMENT, WAREHOUSING, OR DISTRIBUTION FOR ANY AGENCY THE PROCUREMENT DIVISION MAY, WITH THE APPROVAL OF THE PRESIDENT, (A) UNDERTAKE THE PERFORMANCE OF SUCH PROCUREMENT, WAREHOUSING, OR DISTRIBUTION ITSELF, OR (B) PERMIT SUCH AGENCY TO PERFORM SUCH PROCUREMENT, WAREHOUSING, OR DISTRIBUTION, OR (C) ENTRUST SUCH PERFORMANCE TO SOME OTHER AGENCY, OR (D) AVAIL ITSELF IN PART OF ANY OF THESE RECOURSES, ACCORDING AS IT MAY DEEM DESIRABLE IN THE INTEREST OF ECONOMY AND EFFICIENCY. WHEN THE PROCUREMENT DIVISION HAS PRESCRIBED THE MANNER OF PROCUREMENT, WAREHOUSING, OR DISTRIBUTION OF ANY THING, NO AGENCY SHALL THEREAFTER PROCURE, WAREHOUSE, OR DISTRIBUTE SUCH THING IN ANY MANNER OTHER THAN SO PRESCRIBED.

BY ORDER OF THE SECRETARY OF THE TREASURY, APPROVED BY THE PRESIDENT OCTOBER 9, 1933, AS SET FORTH IN REGULATIONS ISSUED FEBRUARY 12, 1934, BY THE DIRECTOR OF PROCUREMENT PURSUANT TO EXECUTIVE ORDER NO. 6166, SUPRA, PROVISION WAS MADE FOR:

1. THE ESTABLISHMENT IN THE TREASURY DEPARTMENT OF A PROCUREMENT DIVISION WITH ALL THE POWERS SET FORTH IN THE SAID ORDER OF JUNE 10, 1933.

2. THE TRANSFER TO THE PROCUREMENT DIVISION OF---

(A) THE FUNCTIONS OF THE GENERAL SUPPLY COMMITTEE

(D) THE FUNCTIONS OF THE FEDERAL COORDINATING SERVICE RELATING TO THE DISPOSITION OF SEIZED AND SURPLUS PROPERTY, AND TO THE PROCUREMENT, WAREHOUSING, AND DISTRIBUTION OF PROPERTY, FACILITIES, STRUCTURES, IMPROVEMENTS, MACHINERY, EQUIPMENT, STORES, AND SUPPLIES EXERCISED BY--

(6) THE INTERDEPARTMENTAL BOARD OF CONTRACTS AND ADJUSTMENTS.

THE REGULATIONS REFERRED TO ABOVE, ISSUED FEBRUARY 12, 1934, AND APPROVED BY THE SECRETARY OF THE TREASURY, FURTHER PROVIDE:

D. FEDERAL CONTRACT BOARD

1. UNDER THE GENERAL DIRECTION OF THE DIRECTOR OF PROCUREMENT, THE FEDERAL CONTRACT BOARD WILL COORDINATE THE ACTIVITIES RELATING TO THE STANDARDIZATION OF CONTRACT FORMS.

3. THE FUNCTION OF THE FEDERAL CONTRACT BOARD SHALL BE: (1) TO STANDARDIZE WHEREVER POSSIBLE, THE FORMS USED IN EXECUTING CONTRACTS; (2) TO ACT UPON REQUESTS OF EXECUTIVE DEPARTMENTS FOR PERMISSION TO DEVIATE FROM THE STANDARD FORMS; (3) TO STUDY PROPOSED LEGISLATION THAT MAY BEAR UPON CONTRACTS, DETERMINE ITS EFFECT UPON THE EXECUTIVE DEPARTMENTS, AND RECOMMEND ACTION TO BE TAKEN, IF ANY; (4) TO EXAMINE NEW ACTS OF CONGRESS, EXECUTIVE ORDERS, AND DECISIONS OF THE COMPTROLLER GENERAL THAT BEAR UPON CONTRACT FORMS AND TAKE APPROPRIATE ACTION WITH RESPECT TO AFFECTED FORMS; AND (5) TO RECOMMEND TO THE DIRECTOR OF PROCUREMENT GENERAL POLICIES PERTAINING TO CONTRACT PROCEDURE.

4. THE FORMS STANDARDIZED BY THE FEDERAL CONTRACT BOARD SHALL BE SUBMITTED TO THE DIRECTOR OF PROCUREMENT AND AFTER APPROVAL BY THE SECRETARY OF THE TREASURY SHALL BE USED BY ALL EXECUTIVE DEPARTMENTS, EXCEPT WHERE DEVIATIONS HAVE BEEN AUTHORIZED BY THE DIRECTOR OF PROCUREMENT WITH THE APPROVAL OF THE SECRETARY OF THE TREASURY.

THE ADMINISTRATIVE POWER OR AUTHORITY TO CONTRACT IN BEHALF OF THE UNITED STATES AND TO PRESCRIBE CONTRACT FORMS IS SUBJECT TO CERTAIN RESTRICTIVE ENACTMENTS OF THE CONGRESS AND TO FUNDAMENTAL PRINCIPLES OF LAW. INSOFAR AS THE ISSUE HERE INVOLVED IS CONCERNED, THESE RESTRICTIONS WERE NOT MATERIALLY AFFECTED BY THE ACT OF MARCH 3, 1933, AS AMENDED BY THE ACT OF MARCH 20, 1933, SUPRA, WHICH AUTHORIZED THE PRESIDENT TO EFFECT BY EXECUTIVE ORDER ANY NECESSARY REGROUPING, CONSOLIDATION, TRANSFER, OR ABOLITION OF EXECUTIVE AGENCIES OR THE FUNCTIONS THEREOF, WITH THE PROVISO THAT ALL LAWS RELATING TO SUCH AGENCIES WERE TO "REMAIN IN FULL FORCE AND FECT.' NOR ARE THESE RESTRICTIONS AFFECTED BY THE PROVISIONS OF EXECUTIVE ORDER 6166, SUPRA, ISSUED PURSUANT TO THE SAID ACT, AS AMENDED. IN FACT, SAID ORDER SPECIFICALLY STATES WITH RESPECT TO THE ESTABLISHMENT OF THE "PROCUREMENT DIVISION" THAT THERE WAS BEING TRANSFERRED THERETO THE "FUNCTION OF DETERMINATION OF POLICIES AND METHODS OF PROCUREMENT" THEN "EXERCISED BY ANY AGENCY.' SAID EXECUTIVE ORDER COULD NOT AND DID NOT PURPORT TO VEST IN THE PROCUREMENT DIVISION OR THE SECRETARY OF THE TREASURY ANY POWER OR AUTHORITY WITH RESPECT TO THE MAKING OF GOVERNMENT CONTRACTS WHICH WAS NOT THERETOFORE LEGALLY VESTED IN SOME OTHER AGENCY OF THE EXECUTIVE BRANCH OF THE GOVERNMENT. THERE WOULD APPEAR TO BE NO ROOM FOR REASONABLE DOUBT THAT THE AUTHORITY TO STANDARDIZE GOVERNMENT CONTRACT FORMS DOES NOT INCLUDE THE AUTHORITY TO PRESCRIBE FOR INSERTING IN SUCH CONTRACTS SUBSTANTIVE PROVISIONS NOT REQUIRED BY LAW TO BE INSERTED THEREIN AND WHICH WOULD IMPOSE A DUTY OR EXPENSE ON THE CONTRACTOR FOR A PURPOSE OR OBJECT HAVING NO DIRECT CONNECTION WITH THE ACCOMPLISHMENT OF THE PURPOSES OR OBJECTS FOR WHICH THE APPROPRIATION SOUGHT TO BE CHARGED WAS MADE.

THE PURPOSE OF THE PROVISION HERE PROPOSED TO BE INSERTED IN CONSTRUCTION CONTRACTS IS TO REQUIRE CONTRACTORS TO FURNISH THE DEPARTMENT OF LABOR CERTAIN STATISTICS RELATIVE TO NUMBER OF PERSONS ON PAY ROLLS, THE AGGREGATE AMOUNT OF SUCH PAY ROLLS, THE MAN-HOURS WORKED, AND THE TOTAL EXPENDITURES FOR MATERIAL. PROVISIONS OF THIS CHARACTER--- INVOLVING ACCOUNTING REQUIREMENTS AND UNCERTAIN EXPENSE INCIDENT THERETO--- MAY AND IN SOME INSTANCES DO TEND TO RESTRICT COMPETITION AND TO INCREASE BID PRICES. IN CONTRACTING FOR THE PERFORMANCE OF GOVERNMENT WORK AND FOR THE FURNISHING OF GOVERNMENT SUPPLIES IT LONG HAS BEEN RECOGNIZED THAT A PRIMARY FACTOR OF ECONOMY IS THE ELIMINATION OF RESTRICTIONS AND UNCERTAINTIES ATTACHING TO THE FULFILLMENT OF GOVERNMENT CONTRACTS, WHICH CONDITIONS JUSTIFY PROSPECTIVE BIDDERS IN SUBMITTING "SAFE" BIDS. AS MAY BE NOTED FROM THE FOREGOING, THE RECOGNITION OF THIS FACT WAS ONE OF THE CONTROLLING FACTORS INSTRUMENTAL IN BRINGING ABOUT THE ESTABLISHMENT OF THE INTERDEPARTMENTAL BOARD OF CONTRACTS AND ADJUSTMENTS, ONE OF THE PRINCIPAL FUNCTIONS OF WHICH--- AS DEFINED IN THE BUDGET CIRCULAR OF NOVEMBER 22, 1921, SUPRA, CREATING SAID BOARD--- WAS TO MAKE THE NECESSARY CHANGES IN CONTRACT FORMS TO "ELIMINATE THOSE UNCERTAINTIES OF CONSTRUCTION AND HAZARDS TO BE ASSUMED BY THE CONTRACTOR WHICH HAVE HITHERTO OPERATED TO INCREASE THE COST OF GOVERNMENT WORK AND SUPPLIES.'

WHILE THE PROVISION SOUGHT TO BE INCORPORATED IN THIS INSTANCE HAS FOR ITS PURPOSE THE SECURING OF STATISTICAL DATA, SOME OF WHICH MAY BE REQUIRED BY LAW TO BE COMPILED BY AN AGENCY OF THE GOVERNMENT--- WITH THE COOPERATION OF OTHER AGENCIES OF THE GOVERNMENT--- THE METHOD HERE SOUGHT TO BE EMPLOYED IN SECURING SUCH DATA HAS NOT BEEN PRESCRIBED BY LAW; AND SINCE THE EMPLOYMENT OF SUCH MEANS MIGHT--- AND IN AT LEAST ONE INSTANCE DID--- TEND TO RESTRICT COMPETITION IN CONFLICT WITH THE PURPOSE OF SECTION 3709, REVISED STATUTES, AND TO IMPOSE AN INCREASED BURDEN--- IN CONTRAVENTION OF SECTION 3678, REVISED STATUTES--- ON THE APPROPRIATIONS UNDER AUTHORITY OF WHICH THE CONSTRUCTION CONTRACTS ARE MADE, THE EMPLOYMENT OF SUCH MEANS IS NOT AUTHORIZED.

AS THE DATA SOUGHT TO BE OBTAINED BY THE USE OF THE PROVISION IN QUESTION IS FOR AN AUTHORIZED USE BY THE GOVERNMENT, AND SINCE IT HAS BEEN REPRESENTED THAT BIDDERS GENERALLY DO NOT OBJECT TO FURNISHING SUCH DATA, THIS OFFICE IS NOT REQUIRED TO INTERPOSE OBJECTION TO A PROCEDURE UNDER WHICH GOVERNMENT CONTRACTORS ARE REQUESTED--- BUT NOT REQUIRED--- TO FURNISH THE DESIRED MONTHLY REPORTS TO THE DEPARTMENT OF LABOR. IT MUST BE UNDERSTOOD, HOWEVER, THAT THERE EXISTS NO LAWFUL AUTHORITY FOR THE REJECTION OF A LOW AND OTHERWISE SATISFACTORY BID BECAUSE OF REFUSAL TO COMPLY WITH SUCH REQUEST.