The above suggested changes in section 1 of the bill and of the original act would necessitate a number of further changes in both. In section 6 of the bill, line 6, page 4, a comma should be inserted after the word "Act", followed by the words "unless the context clearly indicates otherwise", and the definition of the word "employed" in subsection (b) of the same section, lines 10 to 13, inclusive, page 4, should be changed to read substantially as follows: (b) The word 'employed' shall mean manually engaged in the manufacture or preparation for shipment of supplies to be kept in stock or to be delivered to any person or to the United States, or manually engaged in the furnishing of services to any person or to the United States." The bill should also be amended by the addition of a new subsection at the end of section 6, amending section 7 of the original act, as follows: ") The words 'during the period of the contract' shall mean during the period specified by the contract if for the furnishing of supplies or services for a specified period, except as hereinafter provided; and, in the case of contracts not for a specified period and of contracts for a specified period with respect to which the contractor receives notice of award less than forty-eight hours in advance of the beginning of such specified period, shall mean during the period beginning fortyeight hours after notice of award is received by the contractor and ending on the date when the furnishing of the supplies or services required by the contract is completed or the specified period expires." In section 2 of the original act it would be necessary to change the words "employed in the performance of such contract," and "engaged in the performance of such contract", in lines 8 and 11 to 12, respectively, to read in each case: "employed during the period of the contract." This change would render section 2 of the present act consistent with the enlarged scope of the representations and stipulations pursuant to section 1, if section I is to be amended as recommended. It will be noted that section 1 (d) of the proposed revision of the act, as quoted above, eliminates the distinction contained in the present act between male and female employees. Female employees must be at least 18 years of age to qualify for employment under the present act, as compared with an age of 16 years for male employees. There appears to be no reason or justification for this discrimi nation. With regard to the balance of the bill, the Department desires, first, to recommend a change in the phraseology of subsections (b) and (c) of section 2. In their present form these provisions read: "(b) Where the contractor is a regular dealer, he shall submit with his bid a certificate executed by the person who manufactures and from whom the contractor secures all or any part of the supplies specifically required under the contract, which certificate shall contain the same representations and stipulations required of a manufacturer contracting directly with the Government. "(c) Any breach or violation of any of the representations and stipulations contained in such certificates as are required under subsection (b) of this section shall subject the party responsible therefor to the provisions of subsection (a) of this section." It is believed that these provisions are objectionable in two respects. First, that the proposed requirement of subsection (b) that manufacturers' certificates be submitted with each bid would place a serious and unnecessary burden of paper work upon manufacturers, since all bidders would be required to submit such certificates whether awarded a contract or not. Second, both provisions are ambiguous in that they require manufacturers to agree to "the same representations and stipulations required of a manufacturer contracting directly with the Government," and for any breach or violation thereof manufacturers are subjected to the inapposite provisions of subsection (a) of section 2 (sec. 2 of the original act). It is believed that the purpose of these provisions would be clarified, and the first mentioned objection eliminated, by adding the following subsections to section 1 of the bill: "(g) That the contractor, if a regular dealer, will, prior to the delivery of any supplies under the contract, submit to the contracting officer a certificate executed by each manufacturer from whom the contractor directly secures all or any part of the supplies to be delivered, which certificate shall represent and stipulate that the manufacturer agrees to observe with respect to its employees all of the representations and stipulations of subsections (b), (c), (d), (e), and (f) of this section from the date of its subcontract, or from the date of any binding order for any such supplies under a subsisting contract, until the date when delivery under such subcontract or order is completed; and "(h) That the contractor, if a regular dealer, will not deliver any supplies under the contract with knowledge that the manufacturer of all or any part thereof has violated any representation or stipulation of its manufacturer's certificate." For the same purpose a subsection substantially as follows should be substituted for subsections (b) and (c) of section 2 of the bill: "(b) Any breach or violation of any of the representations and stipulations of any manufacturer's certificate pursuant to subsection (g) of section 1 of this act shall render the manufactueer responsible therefor liable to the United States to the same extent as a manufacturer contracting directly with the United States would be pursuant to subsection (a) of this section, and the amount of any liquidated damages for which such manufacturer is liable may be withheld from the contractor or may be recovered in a suit brought against the manufacturer in the name of the United States by the Attorney General thereof. All sums withheld or recovered as deductions, rebates, refunds, or underpayments of wages shall be held and disposed of by the Secretary of Labor in the same manner as provided by subsection (a) of this section with respect to wage violations by contractors. The contracting officer shall have the right to demand that the contractor shall make no further purchases of supplies to be used in the performance of the contract from any manufacturer against whom liquidated damages have been assessed pursuant to this section, and in such event he shall, prior to the acceptance of delivery of any supplies affected by such demand, require the contractor to submit a certificate in compliance with subsection (g) of section 1 of this act from any other manufacturer from whom such further purchases may be made." The above suggested substitutes for subsections (b) and (c) of section 2 of the bill are drawn so as to be consistent with the amendments already recommended for extending the scope of section 1. They are not dependent upon the other amendments, however, and, if the scope of section 1 is not extended, it is recommended that these provisions be nevertheless employed, with appropriate changes in the phraseology of subsections (g) and (h) of section 1 to limit their application to employees engaged in the manufacture of supplies to be used in the performance of Government contracts. It is believed that the following additional minor changes would further clarify the bill: 1. In section 1, at page 2, line 12, delete the semicolon and substitute a comma. 2. Amend section 3 of the bill to read as follows: "Section 3 is amended to read as follows: "The Comptroller General is authorized and directed to distribute a list to all agencies of the United States containing the names of persons or firms found by the Secretary of Labor to have breached any of the agreements of representations required by this Act and containing the names of persons or firms found by the National Labor Relations Board to be in noncompliance with directions or orders of the said Board issued pursuant to sections 9 and 10 of the National Labor Relations Act. Unless the Secretary of Labor, in the case of any breach of the agreements or representations required by this Act, or unless the National Labor Relations Board, in the case of noncompliance with said directions or orders of that Board, otherwise recommends, no contracts shall be awarded to such persons or firms or to any firm, corporation, partnership, or association in which such persons or firms have a controlling interest until three years have elapsed from the date the Secretary of Labor determines such breach to have occurred or from the date the National Labor Relations Board determines that such persons or firms are not complying with its directions or orders.'" 3. In section 7, at page 6, line 7, change "and perishable foods" to read "and other perishables." 4. In section 4 of the bill after "Secretary of Labor" insert the words "or representative designated by him." This would be in accordance with the rest of section 5 of the original act, amended by section 4, which elsewhere refers to both the Secretary and his representative. It is likewise believed that the following additional amendments would further clarify the original act: 1. In section 1, subsections (d) and (e), delete the words "materials" and "articles, or equipment," since section 7 (c) of S. 2165 includes articles, materials, and equipment in the definition of "supplies." This change will of course be unnecessary if the major change in section 1 of the act is made as recommended. 2. In section 5, line 4, change "and" to "or." In conclusion, you are advised that the Department favors the enactment of this bill but recommends the amendment thereof as before pointed out. The Treasury Department has been advised by the Bureau of the Budget that there is no objection to the presentation of this report. Very truly yours, WAYNE C. TAYLOR, Acting Secretary of the Treasury. DEFARTMENT OF THE INTERIOR, Hon. ELBERT D. THOMAS, Chairman, Committee on Education and Labor, United States Senate. MY DEAR SENATOR THOMAS: With reference to your committee's letter dated April 16, 1937, acknowledged under date of April 19, in which you requested this Department to give your committee the benefit of its views on S. 2165, being "An act to provide conditions for the purchase of supplies and the making of contracts by the United States, and for other purposes," the following comments are offered: It appears that this bill was introduced to aid in the effective administration of the Walsh-Healey Act, which was approved June 30, 1936 (Public, No. 846, 74th Cong.). One of the outstanding features of the bill is the reduction from $10,000 to $2,500 of the maximum amount for which contracts may be entered into by the Government without the provisions of the Walsh-Healey Act being inserted. The desirability of such a change became evident soon after the original act became effective, because with the opportunity for contracting for furnishing of articles to the value of $10,000 the Government business was still attractive to that class of manufacturers and dealers who preferred not to operate under the provisions of the Walsh-Healey Act. That class of bidders would not quote under advertisements involving large expenditures without limiting the amount of the bid under each advertisement to $10,000 or less. This had the effect in certain instances of compelling the Government to award large contracts in $10,000 lots, causing it to lose the advantage of the low price on the entire quantity and award at a higher price each part of the total quantity to be contracted for. It became apparent that something should be done to break up that practice, and the simplest and most effective method apparently was to reduce the amount that could be exempted from the provisions of the Walsh-Healey Act to such a figure as would make the Government's business less attractive to the larger manufacturers and dealers with the expectation that the regular bidders would prefer to accept the provisions of the Walsh-Healey Act rather than lose the opportunity to obtain contracts in the larger amounts. This is provided for in the bill under consideration in the substitute provision for section 1. On page 2 of the bill, line 9, the phrase "or services" has been introduced in connection with the stipulation concerning the contractor being a manufacturer of the supplies or a regular dealer therein. This phrase does not appear in the original act, but is not deemed objectionable. In the other changes proposed to be made in section 1, the essential requirements are to be retained although to be expressed in different language, with the exception of section 1 (d). Here for the first time is introduced the prohibition against the performance of industrial home work. In the proposed amendment to that subsection there is inserted after the word "contractor" the following: "and no person shall be permitted by the contractor to perform industrial home work." While this provision may have the effect of denying to some workers the opportunity to earn some compensation at home, on the other hand, since the policy of utilizing home workers has a tendency to reduce the earnings of said workers as compared with those operating in the establishments, the prohibition is in line with the basic theory of the Walsh-Healey Act to prevent just such situations. Section 2 of the original act is proposed to be amended by making that section subsection (a) and inserting new subsections (b) and (c). The requirements of subsection (b), as proposed, undoubtedly will prove to be somewhat of an annoyance to some of the regular dealers who were able to qualify as such heretofore because they did not have to support their own statements with other and better evidence as to their responsibility and qualifications, and who would be subjected hereafter to the penalties provided in subsection (c) of the act if they persist in declaring themselves bona fide regular dealers when they are not. Section 3 of the original act provides that "The Comptroller General is authorized and directed to distribute à list to all agencies of the United States containing the names of persons or firms found by the Secretary of Labor to have breached any of the agreements or representations required by this act." The proposed amendment to section 3 provides in addition that "such list shall contain the names of persons who are refusing to comply with directions or orders of the National Labor Relations Board issued pursuant to sections 9 and 10 of the National Labor Relations Act." Since the last sentence of the original section 3 provides that no contracts shall be awarded to those firms listed until after 3 years have elapsed after the date of the breach of contract, this provision will have the effect of establishing a much needed list of unsatisfactory and undesirable bidders and contractors. It has long been felt that something should be done to keep out those individuals and firms who persistently offer competition that is unfair and difficult otherwise to eradicate and this proposed legislation, if enacted into law, will do that. The proposed change in section 5 of the original act is for the purpose of identifying the official of the Government who shall make the findings of fact referred to in the twenty-third line of said section. The change proposed in section 6 will have the effect of prohibiting any claim for payment for overtime work if the latter is performed on a day in any week in which the aggregate number of hours worked does not exceed 40. This appears to provide a just and equitable arrangement. The amendment to the original section 7 constitutes a series of definitions, none of which are objectionable and all of which tend to make more clear the language of the act, including the amending bill now under discussion. The defining in subsections (e) and (f) of the words "manufacturer" and "regular dealer" is important and satisfactory. Subsections (g), (h), and (i) of section 7 make clear to prospective bidders what is meant by the language to be added in the form of subsection (d) under section 1, referred to heretofore-i. e., "and no person shall be permitted by the contractor to perform industrial home work." I recommend that the bill be passed by the Congress. In response to a request by this Department, the Bureau of the Budget advises that it has no objection to the presentation of this report. Sincerely yours, Hon. HUGO L. BLACK, WAR DEPARTMENT, Washington, May 13, 1937. Chairman, Committee on Education and Labor, United States Senate, DEAR SENATOR BLACK: There has been brought to the attention of the War Department S. 2165, entitled "A bill to amend the act entitled 'An act to provide conditions for the purchase of supplies and the making of contracts by the United States, and for other purposes. It is noted that this proposed bill, among other things, amends section 2 of the act of June 30, 1936 (49 Stat. 2036), by adding to that section a new subsection, subsection (b), which provides that where a contractor is a regular dealer he shall submit with his bid a certificate executed by the person who manufactures and from whom the contractor secures all or any part of the supplies specifically required under the contract, which certificate shall contain the same representations and stipulations required of a manufacturer contracting directly with the Government. Subsection (c) is also added to section 2, making the penalties provided under section 2 applicable to persons violating the new subsection 2 (b) referred to above. It is the understanding of the War Department that at the time S. 3055 (74th Cong., 1st sess.) and H. R. 11554 (74th Cong., 2d sess.), which bills as amended later became the act of June 30, 1936, were before Congress, consideration was given to the question of including certain provisions in the bills which extended the operation thereof and the penalties prescribed thereunder to persons other than those immediately having contractual relations with the Government, and that after mature consideration by the Congress these provisions were eliminated. The objections that were presented at that time against extending the operation of the law in this manner likewise apply to the present bill. It may be, for example, that a regular dealer will under a single Government contract buy from a jobber, or wholesaler, or both, who in turn may purchase the supplies to be delivered under the contract from a number of different manufacturers, each one of which is able to furnish supplies according to Government specifications, or that the dealer himself will buy directly from a number of manufacturers. The obtaining of the requisite certificates from each of these manufacturers probably would result in delaying procurements and would possibly also result in increasing prices and in complicating unduly the administration of the act. It would also tend to have the effect of limiting procurements to purchases from manufacturers only. While the War Department has always been in entire sympathy with the purposes which legislation of this character is intended to accomplish, viz, the fullest possible contribution by the Federal Government to the elimination of child labor and the fostering of adequate scales of wages and reasonable hours of labor in industry, it, nevertheless, feels that the proposed change in section 2 of the act of June 30, 1936, would not only hamper the Department in its procurements, but would probably not accomplish the intended purposes. There are certain other features of the bill which will probably affect to a considerable extent War Department procurements, namely, the proposed reduction in the amount of contracts from $10,000 to $2,500 to which the law would be applicable, the inclusion of contracts for services as well as those for supplies, and the changed method for determining minimum fair wages. The War Department is at present making a study as to just what probable effect these changes will have upon its procurements, and it would appreciate being called upon to express in greater detail its views on the proposed bill. Sincerely yours, HARRY H. WOODRING, Secretary of War. Senator WALSH. The reporter will also include at this point a copy of the Act, together with a copy of the report thereon. (The act, S. 3055, is as follows:) [PUBLIC NO. 846-74TH CONGRESS] [S. 3055] AN ACT To provide conditions for the purchase of supplies and the making of contracts by the United States, and for other purposes Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That in any contract made and entered into by any executive department, independent establishment, or other agency or instrumentality of the United States, or by the District of Columbia, or by any corporation all the stock of which is beneficially owned by the United States (all the foregoing being hereinafter designated as agencies of the United States), for the manufacture or furnishing of materials, supplies, articles, and equipment in any amount exceeding $10,000, there shall be included the following representations and stipulations: (a) That the contractor is the manufacturer of or a regular dealer in the materials, supplies, articles, or equipment to be manufactured or used in the performance of the contract; (b) That all persons employed by the contractor in the manuafcture or furnishing of the materials, supplies, articles, or equipment used in the performance of the contract will be paid, without subsequent deduction or rebate on any account, not less than the minimum wages as determined by the Secretary of Labor to be the prevailing minimum wages for persons employed on similar work or in the particular or similar industries or groups of industries currently operating in the locality in which the materials, supplies, articles, or equipment are to be manufactured or furnished under said contract; (c) That no person employed by the contractor in the manufacture or furnishing of the materials, supplies, articles, or equipment used in the performance of the contract shall be permitted to work in excess of eight hours in any one day or in excess of forty hours in any one week; (d) That no male person under sixteen years of age and no female person under eighteen years of age and no convict labor will be employed by the contractor in the manuafcture or production or furnishing of any of the materials, supplies, articles, or equipment included in such contract; and (e) That no part of such contract will be performed nor will any of the materials supplies, articles, or equipment to be manufactured or furnished under said contract be manufactured or fabricated in any plants, factories, buildings, or surroundings or under working conditions which are unsanitary or hazardous or dangerous to the health and safety of employees engaged in the performance of said contract. Compliance with the safety, sanitary, and factory inspection laws of the State in which the work or part thereof is to be performed shall be prima facie evidence of compliance with this subsection. SEC. 2. That any breach or violation of any of the representations and stipulations in any contract for the purposes set forth in section 1 hereof shall render the party responsible therefor liable to the United States of America for liquidated damages, in addition to damages for any other breach of such contract, the sum of $10 per day for each male person under sixteen years of age or each female person under eighteen years of age, or each convict laborer knowingly employed |