B-11117, JULY 16, 1940, 20 COMP. GEN. 24

B-11117, JULY 16, 1940, 20 COMP. GEN. 24

CONTRACTS - FAIR LABOR STANDARDS ACT COMPLIANCE THERE IS NO AUTHORITY FOR THE INCLUSION IN GOVERNMENT CONTRACTS OF A REQUIREMENT FOR COMPLIANCE WITH THE FAIR LABOR STANDARDS ACT OF 1938, 52 STAT. 1060.

ACTING COMPTROLLER GENERAL ELLIOTT TO THE SECRETARY OF THE INTERIOR, JULY 16, 1940:

THERE HAS BEEN BROUGHT TO MY ATTENTION CONTRACT NO. I-1P-16670, DATED MARCH 16, 1940, WITH RALPH E. MILLS CO., INC., FRANKFORT, KY., FOR FURNISHING ALL LABOR AND MATERIALS IN CONNECTION WITH PROJECT F1, BLUE RIDGE PARKWAY, CONSISTING OF GRADING, DRAINING, THE CONSTRUCTION OF CRUSHED STONE SURFACING WITH A SURFACE APPLICATION OF CALCIUM CHLORIDE AND OTHER ROAD WORK IN AMHERST AND ROCKBRIDGE COUNTIES, VA.

INCLUDED IN THE SPECIFICATIONS MADE A PART OF THE CONTRACT WAS A PROVISION AS FOLLOWS:

COMPLIANCE BY THE CONTRACTOR WITH THE STANDARDS AS TO HOURS OF LABOR PRESCRIBED BY THE " FAIR LABOR STANDARDS ACT OF 1938," APPROVED JUNE 25, 1938 ( PUBLIC NO. 718, 75TH CONGRESS), WILL BE REQUIRED IN THE PERFORMANCE OF THE WORK UNDER THIS CONTRACT; PROVIDED THAT NOTHING IN THIS CLAUSE SHALL MODIFY OR SUPERSEDE ANY REQUIREMENT OF ARTICLE 11 (A) OF FORM 23.

IN REPLY TO LETTERS OF APRIL 24 AND MAY 28, 1940, FROM THE AUDIT DIVISION OF THIS OFFICE ADDRESSED TO THE DIRECTOR, NATIONAL PARK SERVICE, DEPARTMENT OF THE INTERIOR, REQUESTING INFORMATION AS TO THE REASONS FOR INCLUSION OF THE ABOVE-QUOTED PROVISION, THERE WAS RECEIVED A LETTER DATED MAY 28, 1940, TRANSMITTING A COPY OF LETTER OF MAY 25, 1940, WITH ENCLOSURES, FROM THE DISTRICT ENGINEER, PUBLIC ROADS ADMINISTRATION, FEDERAL WORKS AGENCY, TO THE ACTING CHIEF COUNSEL, NATIONAL PARK SERVICE, IN PERTINENT PART AS FOLLOWS:

THE PROJECT IN QUESTION WAS ADVERTISED ON JANUARY 29, 1940. THE PROVISION REQUIRING COMPLIANCE WITH THE FAIR LABOR STANDARDS ACT OF 1938 WAS INCLUDED IN THE SUPPLEMENTAL SPECIFICATIONS IN LINE WITH CORRESPONDENCE BETWEEN THE PUBLIC ROADS ADMINISTRATION AND THE WAGE AND HOUR DIVISION, DEPARTMENT OF LABOR. SINCE THIS PROJECT WAS ADVERTISED, THERE HAS BEEN FURTHER CORRESPONDENCE BETWEEN THESE OFFICES REGARDING THE APPLICATION OF THE LEGISLATION IN QUESTION TO HIGHWAY CONSTRUCTION PROJECTS. THERE IS ATTACHED HERETO ONE COPY EACH OF THE SELF-EXPLANATORY DOCUMENTS LISTED BELOW:

1. LETTER DATED FEBRUARY 2, 1939, FROM MR. THOS. H. MACDONALD, CHIEF OF BUREAU, BUREAU OF PUBLIC ROADS, TO MR. E. F. ANDREWS, ADMINISTRATOR, WAGE AND HOUR DIVISION, DEPARTMENT OF LABOR.

2. REPLY MADE BY MR. ELMER F. ANDREWS, ADMINISTRATOR, WAGE AND HOUR DIVISION, DATED MARCH 3, 1939.

3.LETTER DATED JANUARY 23, 1940, FROM MR. THOS. H. MACDONALD, COMMISSIONER OF PUBLIC ROADS, TO COL. PHILIP B. FLEMING, WAGE AND HOUR DIVISION.

4. REPLY MADE BY COL. PHILIP B. FLEMING, DATED FEBRUARY 21, 1940, AND ENCLOSURES ACCOMPANYING HIS LETTER ( INTERPRETATIVE BULLETINS NOS. 5 AND 8, AND TREATMENT ENTITLED " HIGHWAY CONSTRUCTION UNDER THE FAIR LABOR STANDARDS ACT).'

THE PROVISION IN THE CONTRACT REQUIRING COMPLIANCE WITH STANDARDS AS TO HOURS OF LABOR PRESCRIBED BY THE " FAIR LABOR STANDARDS ACT OF 1938" WAS INSERTED BECAUSE OF THE POSITION TAKEN BY THE WAGE AND HOUR DIVISION, DEPARTMENT OF LABOR, AS OUTLINED IN THE ENCLOSURES MENTIONED ABOVE. THE INCLUSION OF SUCH PROVISION IN CONTRACTS FOR HIGHWAY CONSTRUCTION PROJECTS IS IMPROPER AND UNAUTHORIZED, NOTWITHSTANDING THE VIEWS OF THE WAGE AND HOUR DIVISION, DEPARTMENT OF LABOR, IT WILL BE APPRECIATED IF WE MAY BE SO ADVISED.

A COPY OF THIS LETTER, WITH A SECOND SET OF ATTACHMENTS, IS SENT YOU THAT IT MAY BE AVAILABLE TO YOU SHOULD YOU DESIRE TO FORWARD THEM TO THE GENERAL ACCOUNTING OFFICE.

IN CASE A REPLY BE RECEIVED FROM THE GENERAL ACCOUNTING OFFICE, PLEASE SEND ME TWO COPIES OF IT.

THE FAIR LABOR STANDARDS ACT OF JUNE 25, 1938, 52 STAT. 1060, IS A STATUTE OF GENERAL APPLICATION ENACTED "TO CORRECT AND AS RAPIDLY AS POSSIBLE TO ELIMINATE" UNWHOLESOME LABOR CONDITIONS AND UNSAVORY COMMERCIAL PRACTICES EXISTING "IN INDUSTRIES ENGAGED IN COMMERCE OR IN THE PRODUCTION OF GOODS FOR COMMERCE" AS OUTLINES IN SECTION 2 OF THE ACT. THE STATUTE, SECTIONS 6 AND 7, PRESCRIBES MINIMUM WAGES AND MAXIMUM WORK HOURS FOR EMPLOYEES TO WHOM THE LAW APPLIES, TO WIT, EMPLOYEES "ENGAGED IN COMMERCE OR IN THE PRODUCTION OF GOODS FOR COMMERCE.' SECTION 15 OF THE ACT PRESCRIBES AND DESIGNATES AS "UNLAWFUL" CERTAIN ACTS OR UNDERTAKINGS AS ENUMERATED IN SAID SECTION. SECTION 16 (A) PROVIDES THE PENALTIES ATTENDANT UPON CONVICTION FOR WILLFUL VIOLATION OF ANY OF THE PROVISIONS OF SECTION 15 AND SECTION 16 (B) RELATES TO THE CIVIL LIABILITY OF AN EMPLOYER TO EMPLOYEES AFFECTED BY A VIOLATION OF SECTIONS 6 OR 7 OF THE ACT. OTHER SECTIONS OF THE STATUTE PROVIDE THE MACHINERY FOR THE ADMINISTRATION OF ITS PROVISIONS.

THUS, THE STATUTE SPECIFIES THE MEANS BY WHICH AND MANNER IN WHICH IT IS TO BE ADMINISTERED AND ENFORCED AND PRESCRIBES THE PUNISHMENT TO BE IMPOSED UPON CONVICTION FOR ITS VIOLATION. BUT THE STATUTE DOES NOT PROVIDE FOR, OR AUTHORIZE, THE INCLUSION IN CONTRACTS OF THE UNITED STATES OF ANY REQUIREMENT THAT A CONTRACTOR OTHERWISE AMENABLE TO ITS PROVISIONS SHALL PLEDGE COMPLIANCE WITH THE LAW AS A MATTER OF CONTRACT UNDERTAKING. IT MAY BE POINTED OUT IN THIS CONNECTION THAT WHILE THE CONTRACT IN THIS INSTANCE STATED THAT COMPLIANCE WITH THE STATUTE AS TO HOURS OF LABOR WOULD BE ,REQUIRED" IN THE PERFORMANCE OF THE CONTRACT, IT DID NOT PROVIDE AND, LEGALLY, COULD NOT HAVE PROVIDED, A CORRESPONDING PENALTY OR PAYMENT OF DAMAGES FOR BREACH OF COMPLIANCE, THE MODE OF ENFORCEMENT OF THE ACT AND THE PUNISHMENT FOR VIOLATION THEREOF AS PRESCRIBED IN THE STATUTE ITSELF BEING EXCLUSIVE.

ACCORDINGLY, YOU ARE INFORMED THAT, ASIDE FROM ANY CONSIDERATION AS TO WHETHER EMPLOYEES ENGAGED, WHOLLY WITHIN A STATE, IN THE CONSTRUCTION, ALTERATION, OR REPAIR OF A ROAD ARE COVERED BY THE FAIR LABOR STANDARDS ACT, AS TO WHICH I EXPRESS NO OPINION, AND WHICH APPEARS FROM THE CORRESPONDENCE TO BE SOMEWHAT OF AN OPEN QUESTION WITH THE WAGE AND HOUR DIVISION, DEPARTMENT OF LABOR, THERE WOULD APPEAR TO BE NO LEGAL AUTHORITY --- AS THERE WOULD APPEAR TO BE NO NEED--- FOR THE INCLUSION IN GOVERNMENT CONTRACTS OF A REQUIREMENT FOR COMPLIANCE WITH THE FAIR LABOR STANDARDS ACT OF 1938, OR OF ANY OTHER REFERENCE TO THE STATUTE. IF A CONTRACTOR WITH THE GOVERNMENT IS AMENABLE TO THE LAW IN ANY INSTANCE, WHICH QUESTION WOULD NECESSARILY AWAIT JUDICIAL DETERMINATION IN CASE OF DOUBT OR UNCERTAINTY, THE RECOURSE--- AND THE ONLY RECOURSE--- OF THE UNITED STATES, ACTING IN ITS SOVEREIGN CAPACITY AND NOT IN ITS CAPACITY AS A CONTRACTOR, WOULD BE AS SET FORTH AND PROVIDED IN THE STATUTE. SEE 19 COMP. GEN. 748, 750; CF. 17 COMP. GEN. 37; 18 ID. 285; AND B-10675, JULY 8, 1840, 20 COMP. GEN. 14.

THE DISTRICT ENGINEER, PUBLIC ROADS ADMINISTRATION, FEDERAL WORKS AGENCY, SHOULD BE ADVISED ACCORDINGLY.