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74TH CONGRESS 1st Session

SENATE

{

REPORT No. 433

ESTABLISH UNIFORM REQUIREMENTS AFFECTING GOVERNMENT CONTRACTS

MARCH 13 (calendar day, APRIL 8), 1935.-Ordered to be printed

Mr. LOGAN, from the Committee on the Judiciary, submitted the following

REPORT

[To accompany S. 215]

The Committee on the Judiciary, to whom was referred the bill S. 215, after consideration thereof, report the same favorable with amendments and recommend that the bill as amended do pass.

The committee amendments are as follows:

Page 1, line 4, strike out the figures "1933" and insert in lieu thereof the figures "1935."

Page 3, line 16, strike out "thereof for" and insert "of".

Page 9, line 22, strike out the word "of" and insert the word "to". Page 11, line 3, strike out the word "settlement" and insert in lieu thereof the word "payment".

Page 16, line 18, insert a comma after the word "water."

Page 18, lines 5 to 11, inclusive, strike out section 17 and insert in lieu thereof the following which is now substantially title 3 of the act of March 3, 1933 (47 Stat. 1520, 1521), as follows:

SEC. 17. (a) Notwithstanding any other provision of law, and unless the head of the department or independent establishment concerned shall determine it to be inconsistent with the public interest, or the cost to be unreasonable, only such unmanufactured articles, materials, and supplies as have been mined or produced in the United States, and only such manufactured articles, materials, and supplies as have been manufactured in the United States substantially all from articles, materials, or supplies mined, produced, or manufactured, as the case may be, in the United States, shall be acquired for public use. This section shall not apply with respect to articles, materials, or supplies for use outside the United States, or if articles, materials, or supplies of the class or kind to be used or the articles, materials, or supplies from which they are manufactured are not mined, produced, or manufactured, as the case may be, in the United States in sufficient and reasonably available commercial quantities and of a satisfactory quality.

(b) Every contract for the construction, alteration, or repair of any public building or public work in the United States growing out of an appropriation heretofore made or hereafter to be made shall contain a provision that in the per

formance of the work the contractor, subcontractors, materialmen, or suppliers, shall use only such unmanufactured articles, materials, and supplies as have been mined or produced in the United States, and only such manufactured articles, materials, and supplies as have been manufactured in the United States substantially all from articles, materials, or supplies mined, produced, or manufactured, as the case may be, in the United States except as provided in section (a): Provided, however, That if the head of the department or independent establishment making the contract shall find that in respect to some particular articles, materials, or supplies it is impracticable to make such requirement or that it would unreasonably increase the cost, an exception shall be noted in the specifications as to that particular article, material, or supply, and a public record made of the findings which justified the exception.

(c) If the head of a department, bureau, agency, or independent establishment which has made any contract containing the provision required by subsection (b) finds that in the performance of such contract there has been a failure to comply with such provisions, he shall make public his findings, including therein the name of the contractor obligated under such contract, and no other contract for the construction, alteration, or repair of any public building or public work in the United States or elsewhere shall be awarded to such contractor, subcontractors, material men, or suppliers with which such contractor is associated or affiliated, within a period of three years after such finding is made public.

With certain differences hereinafter explaned, S. 215 is similar in terms to H. R. 5586 (71st Cong., 3d sess.), and the following is quoted from House Report 2863, from the Committee on the Judiciary, House of Representatives, favorably reporting said bill:

The bill under consideration has been drawn by the interdepartmental board on contracts of the Bureau of the Budget. This board is one which has been set up in the office of the Director of the Budget, having representatives upon it of the various Government departments, for the purpose of making studies leading to uniformity of conditions.

A somewhat similar bill (H. R. 5867) was introduced in the Seventieth Congress, upon which hearings were held on March 27 and 30, 1928 (serial 16, pts. 1 and 2). A number of amendments were suggested at the time and those amendments were referred back to the interdepartmental board, given study and resulted in a new draft of a bill which was introduced on January 3, 1929, being H. R. 15713 of the Seventieth Congress. Hearings were again had upon that bill (serial 16, pt. 3) and again numerous amendments were suggested and those were again referred back to this board. As a result of these hearings and suggested amendments, the present bill (H. R. 5568) has been drawn with a view to meeting the objections of the various departments of the Government. The various representatives of the Government have written letters or have appeared before subcommittee no. 2 of this committee (hearings, serial 4, pt. 1) on January 17, 1930. These suggestions were again referred to the board which has made its recommendations to this committee and has had the committee's careful consideration. The bill (H. R. 5568) has to do with the requirements concerning the making, form, and construction of contracts with the Government. The making of these contracts is naturally a great problem as the Government has an expenditure of something like $5,000,000,000 a year, with world-wide activities in all kinds of diversified conditions to the transaction of business.

The requirements that Congress has sought to impose upon the executive branch of the Government have grown up piecemeal, for today there are over 240 such statutes. These statutes prescribe various requirements as to the same matter not only in different departments but as to different bureaus in the same department.

This bill provides for a complete code governing the letting and carrying out of contracts with the Government. Its adoption will clarify the law upon the subject of contracts with the Government. It will be helpful to those who enter into contracts with the Government as well as the Government officials who must be responsible for the full performance of such contracts.

In view of the many statutes now relating to this subject and the great number of contracts which the Government enters into each year, it is the opinion of your committee that the legislation involved in this bill is highly essential in order that there may be a definite code of laws relating to this important activity of the Government.

The present bill (S. 215) differs from the bill recommended by the interdepartmental board of contracts and adjustments in three principal particulars and except as to these differences, the various heads of departments, independent establishments, the Comptroller General, and the Associated Contractors of America, Inc., are in substantial agreement. The Comptroller General and the Associated Contractors have parted company with the administrative officers of the Government in these three particulars and the bill as recommended by your committee substantially adopts the recommendations made by the Comptroller General and the Associated General Contractors and recommendations designed to carry out the principles twice recommended by the special committee on administrative law of the American Bar Association and twice adopted by the said American Bar Association to the effect that administrative officers of the Government should not be permitted by law to conclusively determine the rights of private citizens but such citizens should have reserved to them the right to resort to the judiciary to determine their disputes with the Government.

These differences will be taken up in the order in which they occur in the bill; as stated by the House Committee on the Judiciary in its above referred to report, the larger part of the remainder of the bill is simply a codification of the existing law relating to Government contracts and made uniform as to all of the departments and establishments of the Government.

ADVERTISING, SPECIFICATIONS, PROTESTS OF BIDDERS

The first difference relates to sections 5 and 7 of the bill which are designed to replace section 3709, Revised Statutes, and subsequent related statutes and the various exceptions which have been created by law from time to time thereto. The exceptions contained in section 5 of the bill are substantially the exceptions now contained in the statutes as to section 3709, Revised Statutes, or exceptions which have been created under decisions of the various accounting officers of the Government during the past many years in order to meet conditions as they arose in the administration of the law concerning advertising for bids. Section 3709, Revised Statutes, is as follows:

All purchases and contracts for supplies or services, in any of the departments of the Government, except for personal services, shall be made by advertising a sufficient time previously for proposals respecting the same when the public exigencies do not require the immediate delivery of the articles or performance of the service. When immediate delivery or performance is required by the public exigency, the articles or service required may be procured by open purchase or contract, at the places and in the manner in which such articles are usually bought and sold, or such services engaged, between individuals.

Contrasting section 3709, Revised Statutes, and these two sections 5 and 7 of the bill, it will be noted that the two sections extend section. 3709, Revised Statutes, by making a matter of statutory law—

1. The requirement that advertised specifications be in such terms as to permit of full and free competition by all qualified and competent bidders;

2. The requirement that bidders must show before the bids are opened that they are qualified to perform the contracts; and

3. The prohibition against acceptance of any bid for a period of 7 days-except in an emergency-after the bids are opened and while a protest filed in writing is undetermined by the Comptroller General

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