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Under the CWHSSA," the contractor has the right to appeal determinations to withhold liquidated damages to the agency head and to appeal final orders of the agency head to the Court of Claims. Although the Walsh-Healey Act also provides for liquidated damages, no statutory right of appeal is given the contractor concerning the determination of liquidated damages. The Davis-Bacon Act and the CWHSSA give an underpaid employee a right of action against the contractor. No similar employee right of action exists under the WalshHealey or Service Contract acts, although the Government is given such a right of action with recoveries being held for the benefit of the underpaid employee. However, the WalshHealey Act provides a statute of limitation of one year from the date of notification to the contractor of a withholding on claims made by underpaid employees for their share of the

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40 U.S.C. 276a (a) (1970) and 40 U.S.C. § 328, 41 U.S.C.

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JUDICIAL REVIEW

The Administrative Procedures Act (APA) is specifically made applicable to the administration of the Walsh-Healey Act, including judicial review of wage determinations and other legal questions." This right is given to any interested person. The Davis-Bacon and other acts do not expressly require adherence to APA standards.

CRIMINAL PENALTIES

The CWHSSA provides criminal penalties for intentional violations of any of the provisions of the act (hours, overtime, and safety and health).76 The Fair Labor Standards Act also contains criminal penalties, but the other acts do not.

SAFETY AND HEALTH STANDARDS

The Occupational Safety and Health Act of 1970," a recently enacted national safety and health law, recognizes the duplication between its provisions and those of the CWHSSA, Walsh-Healey, and Service Contract acts. It provides that standards promulgated under it will supersede Walsh-Healey, CWHSSA, and Service Contract act standards.78 It also requires the Secretary of Labor to report to Congress, within three years, his recommendations for legislation to avoid unnecessary duplication and achieve coordination between the Occupation Safety and Health Act and other Federal law.

73 41 U.S.C. § 36 (1970).

74 41 U.S.C. § 354 (b) (1970).

75 41 U.S.C. § 43a (1970).

70 40 U.S.C. § 332 (1970).

77 Pub. L. 91-596, 84 Stat. 1590.

78 29 U.S.C. § 653 (b) (2) (1970).

Child Labor

The Walsh-Healey Act is the only Government contract labor statute which prohibits the employment of child labor (males under 16, females under 18). The Fair Labor Standards Act generally defines "oppressive child labor" as the employment of persons under the age of 16.80 No sex distinction is made. The age differences for males and females under the Walsh-Healey child labor provisions appear to be inconsistent with the civil rights laws which prohibit sex discrimination.81

Statutory Suspensions and Exceptions

The President has the power to suspend the provisions of the Davis-Bacon and WalshHealey acts.82 Similar authority is not contained in CWHSSA or the Service Contract Act.

The Secretary of Labor has authority to allow reasonable variances, tolerances, and exemptions from the requirement of the CWHSSA, Walsh-Healey, and Service Contract acts, but there is no parallel authority under the Davis-Bacon Act.

Summary

There are numerous gaps and inconsistencies in coverage in the labor acts in essentially analogous areas. We have cataloged many of these. But our listing is by no means complete. It seems clear that there is considerable room for improvement in these acts.

are generally governed by 5 U.S.C. § 3109. The thrust of the statute is to allow contracting for experts and consultants when "authorized by appropriation or other statute." The statute also limits the pay of experts and consultants to the GS-18 level except where higher rates are specifically authorized.

Because of the wording of 5 U.S.C. § 3109, it has proved necessary to either include in the "organic acts" of various agencies, commissions, and the like, provisions authorizing contracting "as authorized by 5 U.S.C. § 3109," or provide such authority as part of the annual appropriation acts. A study of all the appropriation acts passed by the 91st Congress, 1st Session (1969), revealed approximately 90 separate places in which various agencies or elements of an agency were given authority to contract for experts and consultants.

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Although most agencies are granted authority to contract for experts and consultants, in some cases limitations beyond those stated in 5 U.S.C. § 3109 are imposed. Sometimes a per diem rate on compensation for experts and consultants below that authorized by 5 U.S.C. § 3109 is included. Sometimes, an appropriation act will place a total dollar limit on the amount of the appropriations which may be used for such contracting in the given fiscal year. A third type of limitation, rarely found, is a limit on the number of days any one individual may be retained in any year as an expert or consultant.

ACCESS TO RECORDS

A number of separate laws require those holding negotiated Government contracts, and their subcontractors, to afford the Government access to their books and records for the purposes of inspection and audit.

EXPERTS AND CONSULTANTS

The conditions under which expert and consultant services can be obtained by contract

79 41 U.S.C. § 35(d) (1970).

80 29 U.S.C. § 203 (1) (1970).

81 See 42 U.S.C. § 2000e-2 (a) (1) (1970).

240 U.S.C. § 276a-5 and 41 U.S.C. § 40 (1970), respectively.

83 40 U.S.C. 331, 41 U.S.C. § 40, and 41 U.S.C. § 353 (1970), respectively.

The Basic Statutes

ASPA and FPASA, which together govern procurement by most departments, agencies,

4 In some cases it may be that the limit when enacted was higher than 5 U.S.C. § 3109 then allowed, but is now lower because of later pay raises in the civil service.

and establishments of the Government, were both amended by the Act of October 31, 1951,85 to provide for the right of audit by GAO of all contracts negotiated under either of these statutes. As thus amended, each act provides that the Comptroller General and his representatives, for a period expiring three years after final payment under the contract, shall have the right to examine the books, documents, papers, and records of the contractor and those of his subcontractors that directly pertain to or involve transactions relating to the contract or subcontract. The 1951 language used to amend ASPA and FPASA was identical, but different language entered ASPA when it was codified in 1956.87

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The foregoing provisions were further modified by Pub. L. 89-6078 which exempted certain foreign contractors from their accessto-records provisions. In some cases, a determination must be made by the head of the agency concerned that such omission would be in the best interest of the United States. That determination is made expressly nondelegable by 41 U.S.C. § 254 (c) (last sentence); but there is no similar requirement in 10 U.S.C. § 2313 (c), and such determination is delegable under 10 U.S.C. § 2311.9

There is no corresponding statute providing similar general access-to-records rights to the contracting agencies concerned in the case of fixed-price contracts.

The contracting agencies, however, are given the right to inspect the plants and audit the books and records of cost or cost-plus-a-fixedfee contractors and their subcontractors by 10 U.S.C. § 2313(a) and 41 U.S.C. § 254(b). These latter provisions grant a direct statutory right of inspection of plant and premises in such cases, whereas the GAO provision requires a contract clause to grant GAO audit rights.

It is doubtful that Congress intended any

Act of Oct. 31, 1951, ch. 652, 65 Stat. 700.

10 U.S.C. § 2313(b) and 41 U.S.C. § 254 (c) (1970).

87 Act of Aug. 10, 1956, ch. 1041; 70A Stat. 132.

S8 Act of Sept. 27, 1966; Pub. L. 89-607; 80 Stat. 850.

H.R. Rep. No. 693, 89th Cong., 2d Sess., at p. 3, indicates that it was intended to make such determinations nondelegable in the case of DOD contracts as well. It stated that, "This section amends chapter 137 of Title 10, United States Code, so as to permit the omission... if the agency head determines... The authority to make such a determination is not delegable below the head of the agency and is subject to the concurrence of the Comptroller General ..."

difference in the scope of 10 U.S.C. § 2313(a) and 41 U.S.C. § 254(b), but a literal reading of them leads to a difference in their coverage of subcontracts. Under 10 U.S.C. § 2313(a), inspection and audit rights must be inserted in all subcontracts under a cost or cost-plus-afixed-fee prime contract, regardless of whether the subcontract was let on a fixed price or cost reimbursable basis. On the other hand, under 41 U.S.C. § 254 (b), inspection and audit rights need be inserted only into subcontracts let on a cost or cost-plus-a-fixed-fee basis. Literally, under 41 U.S.C. § 254(b), such inspection and audit rights may be required in any cost-reimbursable subcontract even if the prime contract is on a fixed-price basis.

The access-to-records provisions of Pub. L. 85-804 in 50 U.S.C. § 1433 (b) are the same as those in FPASA at 41 U.S.C. § 254 (c). A similar amendment to 50 U.S.C. § 1433(b) was enacted by Pub. L. 89-607, cited above, with respect to the exemption of certain foreign contractors from such access-to-records provisions.

Several other statutes of more limited scope are essentially like Pub. L. 85-804 in that they allow contractual actions without regard to the normal legal safeguards and requirements. These include 42 U.S.C. § 2202, which applies to the AEC; 50 U.S.C. App. § 2293, which Ideals with civil defense matters; 22 U.S.C. § 2509 (d), which applies to ACTION; 22 U.S.C. § 2583, which applies to the United States Arms Control and Disarmament Agency; and 36 U.S.C. § 138b, which applies to the American Battle Monuments Commission. None of these provisions includes a requirement similar to that of Pub. L. 85-804 for access to contractors' records by agency representatives, though the AEC statutes provide for access by GAO.90

Originally the Truth in Negotiations Act did not provide a right of access to records for the purpose of evaluating cost or pricing data." But it was amended to add a provision that any authorized representative of the head of the contracting agency concerned, who was also an employee of the Government, should have the right to examine all books, records, documents, and other data of the contractor

90 42 U.S.C. § 2206 (1970).

91 Act of Sept. 10, 1962, 76 Stat. 528, Pub. L. 87-653.

or subcontractor involved that was related to the negotiation, pricing, or performance of the contract or subcontract for the purpose of evaluating the accuracy, completeness, and currency of cost or pricing data required to be submitted, for a period expiring three years after final payment under the contract or subcontract.92 This statutory provision applies only to agencies subject to ASPA. However, similar requirements have been established by the Federal Procurement Regulations (FPR) for agencies subject to FPASA.93

Under 41 U.S.C. § 53, GAO is given the right to inspect the plant and audit the books and records of any contractor engaged in the performance of a negotiated Government contract, whether fixed-price or cost-reimbursable, and of any subcontractor engaged in the performance of any subcontract thereunder, for the purpose of determining if any payments have been made or granted by any subcontractor as a gratuity or inducement for award of the contract or subcontract.

Under 50 U.S.C. § 2168 (j), representatives of the Cost Accounting Standards Board, the contracting officer, and GAO have the right to examine and make copies of any documents, papers, or records of such contractors relating to compliance with cost-accounting principles and standards.9

Because of differences in the wording of their statutes, intensive efforts by GAO and DOD to draft a single contract audit clause fell short of that goal in 1971. Instead two clauses were drafted, one for audits by GAO and the other for audits by the Defense Contract Audit Agency, combining to that extent at least the numerous special audit clauses for different kinds of contracts that had previously been prescribed.95

92 Act of Sept. 25, 1968, Pub. L. 90-512, 82 Stat. 863.

93 FPR 1-3.814-2(c).

50 U.S.C. App. § 2168 (j) (1970).

See ASPR 7-104.15 and 7-104.41.

CONTRACTING IN ADVANCE

OF APPROPRIATIONS

At present, four separate, interrelated, and overlapping provisions generally prohibit contracting officers from contracting in advance of or in excess of appropriations, except as otherwise specifically authorized by law.

As provided in 31 U.S.C. § 627, no act of Congress may be construed to authorize the execution of a contract involving the payment of money in excess of appropriations made by law, unless the act shall in specific terms declare that such a contract may be executed.

Under 31 U.S.C. § 665 (a), no officer or employee of the United States may make or authorize an expenditure from or create or authorize an obligation under any appropriation or fund in excess of the amount available therein; nor may any such officer or employee involve the Government in any contract or other obligation, for the payment of money for any purpose, in advance of appropriations made for such purpose, unless such contract or obligation is authorized by law (popularly known as the Anti-Deficiency Act).

It is also provided in 41 U.S.C. § 11 that no contract or purchase on behalf of the United States shall be made, unless the same is authorized by law or is under an appropriation adequate to its fulfillment. Certain exceptions are made for DOD; for example, subsistence, medical, and hospital supplies.

Finally, 41 U.S.C. § 12 provides that no contract shall be entered into for the erection, repair, or furnishing of any public building or for any public improvement which shall bind the Government to pay a larger sum of money than the amount in the Treasury appropriated for the specific purpose.96

98 In 42 Comp. Gen. 226 (1962), 41 U.S.C. § 12 was cited as authority for the proposition that the construction of a public building or public work may not be implied from the overall scope of the appropriation but must be specifically mentioned.

CHAPTER 4

Statutes of Limited Application

Our examination of existing statutes affecting procurement disclosed a number of laws pertaining to only one or a few agencies. In general, they either grant special procurement authority or impose restrictions or controls which do not pertain Government-wide. For example, DOD annual appropriation acts regularly have contained a provision limiting the types of advertising costs which can be charged to DOD contracts. In a few cases we recommend making these restricted statutes applicable to all agencies. In other cases we did not attempt to assess the desirability or necessity of the authorities or limitations prescribed by special statutes, and, therefore, make no recommendations for either their repeal or extension to procurement actions of all agencies. However, the continued existence of such special provisions obviously will impact on efforts to develop and obtain greater Governmentwide consistency in procurement policies and regulations.

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subcontractors to submit cost or pricing data prior to entering into negotiated contracts, subcontracts, or price adjustments thereof, involving $100,000 or more. The data must be certified accurate, current, and complete as of a date as close as practicable to the date of agreement on the price. Contractors in effect must guarantee the data by agreeing to a price reduction for any increase due to defective data. At the option of any agency head, certified cost or pricing data may be required on price changes under $100,000. Exemptions are authorized from the requirements of the act in three cases where the price is based on: Adequate price competition,

Established catalog or market price of commercial items sold in substantial quantities to the general public, or

Price set by law or regulation.

Also the agency head may grant a waiver in exceptional cases for reasons stated in writing.

CONTINUED NEED FOR THE ACT

When the Truth in Negotiations Act was passed, some contractors were reluctant to reveal their cost or pricing data to the Government. By now, however, whether due to experience under the law or to the independent evolution of pricing understanding and techniques, contractors generally recognize that when contracts must be priced by cost analysis,

110 U.S.C. § 2306 (f) (1970).

For a comprehensive summary of the legislative history of this act, see Herbert Roback, Truth in Negotiating: The Legislative Background of P.L. 87-653, 1 Pub. Contract L.J., 8-28. (July 1968). For earlier background, see "The Evolving Art of Contract Pricing, 1942-1959" and "The Blue Books Speed the Evolution, 1957-1962," Study Group 7 (Cost and Pricing Information), Final Report, Feb. 1972, pp. 180-212.

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