CONTENTS Page 8 Statement of Admiral C. C. Bloch, Judge Advocate, United States Navy. Statement of Capt. Henry de F. Mel, Acting Chief Bureau of Supplies and Statement of Mr. Frank Healy, National Recovery Administration___ Statement of Mr. H. E. Collins, Assistant Chief of Procurement, United TO ESTABLISH UNIFORM REQUIREMENTS AFFECTING GOVERNMENT CONTRACTS TUESDAY, MAY 7, 1935 UNITED STATES SENATE, SUBCOMMITTEE OF THE COMMITTEE ON THE JUDICIARY, Washington, D. C. The subcommittee met at 10:30 a. m. in the committee room, Capitol, Senator M. M. Logan (chairman of subcommittee) presiding. Present: Senators Logan (presiding) and Austin. The subcommittee had under consideration S. 215, a bill to establish uniform requirements affecting Government contracts, and for other purposes. Said S. 215 is here printed in full, as follows: [S. 215, 74th Cong., 1st sess., Rept. No. 433.] [Omit the part struck through and insert the part printed in italic] A BILL To establish uniform requirements affecting Government contracts, and for other purposes Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That this Act may be cited as the Public Contract Act, 1933 1935." 66 66 DEFINITIONS SEC. 2. When used in this Act, unless the text indicates otherwise(a) The terms United States" and "Government" are synonymous and include the District of Columbia and all departments of the Government; (b) The term "department" means any executive department, independent establishment, commission, board, or other Government agency having authority to make contracts involving the expenditure of public funds, and shall include the District of Columbia; (c) The term "formal contract" means an agreement reduced to writing in one instrument and signed by all the contracting parties at the end thereof: Provided, That drawings, specifications, conditions, and other relevant papers may be incorporated in the contract by appropriate reference. The term "informal contract" means an agreement in any other form; (d) The term advertising' means inviting competitive bids by notice in printed publications or posted in public places, by circular letters or otherwise; (e) The term personal services" means services rendered at a specified rate in person by the party or parties who contract to perform them; 66 66 (f) The term contractor means any person, partnership, company, or corporation, party to a contract with the United States; 66 (g) The terms "purchase and procurement" are synonymous and mean the acquisition of services, materials, or supplies pursuant to contract. AUTHORITY SEC. 3. Contracts on behalf of the United States may be entered into only by the head of the department having administrative supervision of the subject 1 matter or the appropriation to be charged and by such officers as he shall duly designate in writing. A duly authenticated copy of each such order shall be filed with each contract and the original shall at all times be available in the office of the contracting officer for public inspection. No such contract shall be valid unless authorized by law and procured and entered into as provided by law, and no contract shall be made or obligation incurred on behalf of the United States under any contract unless the same is under an appropriation adequate for its fulfillment, except (a) By any department charged by law with the procuring thereof for of clothing, subsistence, forage, quarters, shelter, transportation, medical, surgical, or hospital supplies or services, which, however, shall not exceed the necessities for the current fiscal year; (b) For fuel for Government use in sufficient quantities to meet the requirements for one year without regard to the current fiscal year, when, in the opinion of the head of the department charged with the procuring thereof, it is in the interest of the United States so to do. Payments for fuel delivered may be made from funds appropriated to such department for that purpose for the current fiscal year or from funds appropriated or that may be appropriated therefor for the ensuing year; (c) By the Post Office Department for such periods of time as may now be authorized by law: (d) Leases of real estate by the departments for terms not exceeding three years, by the State Department for premises in foreign lands for terms not exceeding ten years, and by the Post Office Department at a reasonable annual rental for terms not exceeding ten years: Provided, That no contract shall be made for the leasing of any building in the District of Columbia, except for postal purposes, unless the same shall have been authorized by law or until an appropriation therefor shall have been made in terms by Congress; (e) For services or supplies in cases threatening immediate loss of human life or destruction of property; (f) By the Indian Service as provided by section 4 of the Act of August 15, 1894 (U. S. C., title 25, sec. 99); (g) By the Bureau of Fisheries for supplies for the natives of the Pribilof Islands in the manner and subject to the limitations provided in paragraph (b) of this section. PURCHASE OF LAND SEC. 4. No land shall be purchased on account of the United States except under a law authorizing such purchase. ADVERTISING SEC. 5. All contracts estimated to exceed $500 in amount for work, materials, supplies, leasing of quarters, or services other than personal (whether rendered by individuals, firms, or corporations) shall be made after advertising for bids on the basis of specifications stating the needs of the United States in such terms as to permit of full and free competition by all qualified bidders a sufficient time previously and not less than ten days before the day set for opening thereof, except (a) During the period of a national emergency when so declared by the President; (b) When the public exigency will not admit of the delay incident to advertising; (c) For medicines and medical supplies, hospital and surgical supplies, and prosthetic appliances when authorized in writing by the head of a department or by the head of the medical service of the department concerned; (d) For articles for the military or naval or Coast Guard service, when the Secretary, Acting Secretary, or Assistant Secretary of the War, Navy, or Treasury Departments, respectively, personally certify that the character or ingredients thereof are of such a nature that the public interests require that they be kept secret; (e) In purchasing fuel for the Navy or for naval stations and yards, the Secretary of the Navy shall have power to discriminate and purchase, in such manner as he may deem proper, that kind of fuel that is best adapted to the purpose for which it is to be used; (f) For scientific and technical apparatus and instruments of precision for specialized laboratory or research work; (g) For products of Indian industry purchased from Indians under Government superintendence for Indians under Government supervision; (h) For experimental or development work for the military, naval, or Coast Guard services, or for manufacture or purchase of military or naval material for experimentation or test to determine the suitability thereof for actual service; PUBLICATION · SEC. 6. No advertisement for bids shall be published in any printed publication except upon written authority or regulation of the head of the department concerned. The compensation for such advertising shall in no case exceed. the commercial rates charged to private individuals, with the usual discounts, such rates to be ascertained from sworn statements to be furnished by the proprietors or publishers of such publications. AWARD OF CONTRACTS " SEC. 7. All bids shall be publicly opened at the time and place stated in the advertisement and award made with reasonable promptness after the lapse of seven days, unless a public emergency will not permit of such delay, by written notice to the lowest responsible bidder whose bid conforms to the specifications. Except in case of a public emergency so requiring immediate action no award shall be made while a protest field in writing with the officer named in the advertisement for the receipt of bids, challenging the legality or regularity of the administrative procedure of any bid, is undetermined by the Comptroller General, who shall give such protests preferred attention. The term "lowest responsible bidder" for the purposes of this section shall mean in the case of construction work only those bidders who have shown before bids are opened that they are possessed of financial resources, equipment, and comparable experience in the same or similar classes of work as reasonably to justify the conclusion that they are qualified to perform in a prompt and workmanlike manner the construction work described in the specifications, and in the case of supplies the term shall mean only those bidders who have shown before the bids are opened that they are manufacturers or regular dealers in the supplies described in the advertised specifications. FORMS OF CONTRACT 1 SEC. 8. Contracts for the construction or repair of public works or the procurement of materials, supplies, or services other than personal shall be formal, except (a) When the amount thereof is $2,000 or less; (b) When the amount is $5,000 or less and performance or delivery is to be completed within three months; (c) When the public exigencies require immediate performance or delivery; (d) When the supplies are to be purchased and used without the limits of the United States or its possessions; or (e) For the repair or overhaul of vessels. In cases (a), (b), (c), (d), and (e) the work, materials, supplies, or services may be procured by informal contract. LIQUIDATED DAMAGES SEC. 9. Stipulations for liquidated damages shall not be included in contracts with the United States unless the public interests so require, but any such stipulation contained in any contract shall be strictly enforced except that in cases of exceptional merit the Comptroller General, on the written recommendation of the head of the department concerned, may remit the whole or any part of such damages that have accrued as may be just and equitable. DISPUTES UNDER CONTRACT SEC. 10. There shall not be contained in any contract with the United States any stipulation making final and conclusive on the parties thereto the decision of any officer of the Government or other person of any question of law or fact arising under such contract, except as to the interpretation of the specifications and/or drawings made a part of the contract. All other disputed questions of |