Executive Order 7083—Prescribing Rules and Regulations Relating to Methods of Prosecuting Projects Under the Emergency Relief Appropriation Act of 1935

REGULATION NO. 5.

By virtue of and pursuant to the authority vested in me by the Emergency Relief Appropriation Act of 1935, approved April 8, 1935 (Public Resolution No. 11, 74th Congress), I hereby prescribe the following rules and regulations:

Section 1. Definitions. The term "project" as used herein shall mean any project which is financed in whole or in part from funds appropriated by the Emergency Relief Appropriation Act of 1935, except work relief projects conducted by State Emergency Relief Administrations.

The term "non-federal project", as used herein shall mean any project which is being conducted by a State, Territory, Possession, including a subdivision or agency thereof, municipality, the District of Columbia, or public bodies thereof.

The tern "supervisory agency" as used herein shall mean the Department, Federal agency, State, Territory, Possession, subdivision or agency thereof, municipality, the District of Columbia, or public bodies thereof, which is conducting or supervising the project.

The terms "Regulation No. 1" and "Regulation No. 2" as used herein shall mean, respectively, the Regulation No. 1 issued under Executive Order No. 7046 of May 20, 1935, and the Regulation No. 2 issued under Executive Order No. 7060 of June 5, 1935.

Section 2. Method of Prosecution. All projects or portions of projects shall be prosecuted by means of one of the following methods, hereinafter set forth:

     (a) Force Account.
     (b) Fixed Price Contract.
     (c) Limited Fixed Price Contract.
     (d) Management Contract.

The specific method which may be used in the prosecution of any project or portions of projects shall be indicated in the application for allotment of funds submitted by the Department or Federal agency to the Division of Applications and Information established by Executive Order No. 7054 of May 6, 1935. The Works Progress Administration may disapprove the method or methods indicated in any such application.

Section 3. Force Account. The force-account method shall involve (a) the employment by the supervisory agency of the persons working on the project, and (b) the supervision of the project by the supervisory agency.

Section 4. Fixed Price Contract. The fixed-price contract shall be awarded on the basis of competitive bids submitted on complete drawings and specifications. Such contract shall provide; among other things, that:

(a) The contractor shall be paid a fixed sum for the complete project, or for specified units, determined by competitive bidding, which sum shall include all items of cost except the cost of the materials, supplies, and equipment which are to be furnished, pursuant to the specifications, by the Government.

(b) The contractor shall be obligated to perform, directly and without subcontracting, not less then twenty-five percentum (25%) of the project, to be calculated on the basis of the contract price and the cost of materials, supplies, and equipment furnished by the Government.

Section 5. Limited Fixed Price Contracts. The limited-fixed-price contract shall be awarded on the basis of competitive bids submitted on complete drawings and specifications. Such contract shall provide, among other things, that:

(a) The contractor shall be paid a fixed sum for the complete project, or for specified units, determined by competitive bidding, which sum shall include all items of cost, except the cost of labor (other than supervisory, administrative, and highly skilled labor) employed at the site of the project, and the cost of the materials, supplies, and equipment which ere to be furnished, pursuant to the specifications, by the Government.

(b) The contractor shall pay, or cause to be paid, the persons employed on the project wages determined pursuant to Part I, subdivisions (a) to (e), inclusive, of Regulation No. 1, and, except for wages paid to the supervisory, administrative, and highly skilled labor, the contractor shall be reimbursed for such payment.

(c) The contractor shall be obligated to perform, directly and without subcontracting, not less then twenty-five percentum (25%) of the project to be calculated on the beats of the total cost of the project which shall include all payments made by the Government pursuant to subdivisions (a) and (b) of this section and the cost of materials, supplies, and equipment furnished by the Government.

Section 6. Management Contract. The management contract shall be awarded on the basis of competitive bids submitted on a plan or drawings and specifications sufficiently complete to determine the nature and character of the work. Such contract shall provide, among other things, that:

(a) The contractor shall (1) administer, supervise, and manage the project; (2) procure and pay, or cause to be paid, for all materials, supplies, and equipment necessary for the project (except such as the specifications provide shall be furnished by the Government), all such procurements to be made on the basis of competitive bidding, pursuant to section 2 of the Emergency Relief Appropriation Act of 1935, when the aggregate amount involved is $300 or more and under the supervision of the supervisory agency; (3) make, and assume all obligations under, all subcontracts let for the performance of any portion of the work, all such subcontracts to be made on the basis of competitive bidding and under the supervision of the supervisory agency; and (4) pay, or cause to be paid, all persons employed on the project wages determined pursuant to Part I, subdivisions (a) to (e) inclusive, of Regulation No. 1.

(b) The contractor shall be paid, in addition to the fixed sum determined by competitive bidding, for administering, supervising, and managing the project a fixed amount, likewise to be determined by competitive bidding, for the period of the work for each item of plant equipment furnished according to a schedule included in the specifications and shall be reimbursed for all necessary payments made pursuant to the specifications (1) for wages, except payments for the supervisory, administrative, and highly skilled labor, (2) for materials, supplies, and equipment purchased, (3) to subcontractors, and (4) for other items of cost properly incurred.

(c) The contractor shall be obligated to supervise, directly and without subcontracting, not less then twenty-five percentum (25%) of the project, to be calculated on the basis of the total cost of the project which shell include all payments made by the Government pursuant to subdivision (b) of this section and the cost of materials, supplies, and equipment furnished by the Government.

The specifications may include an estimate of the total cost of the project which shall be prepared by the Department or Federal agency submitting the application. Such estimate of the total cost, if included in the specifications, shall serve as a basis for the adjustment of the fixed sun to be paid pursuant to subdivision (b) of this section for the administration, supervision, and management of the project by (1) increasing such sum, in accordance with a stated ratio specified in the contract, if the final cost of the project, as determined pursuant to subdivision (c) of this section, is less than the estimate of the total cost and (2) decreasing such fixed sum, in accordance with a stated ratio specified in the contract, if such final cost of the project is greater than the estimate of the total cost.

Section 7. Dismissal of Employees. Every employer of labor on the project shall have the right, subject to disapproval by the supervisory agency, to dismiss any employee.

Section 8. Notification to Director of Procurement. The Department or Federal agency submitting an application, unless exempted by the Director of Procurement of the Treasury Department, after final approval of an allocation of funds by the President and before any force-account work is begun or specifications drawn for competitive bids for the project, shall furnish the Director of Procurement with a statement, on a form or forms prescribed and furnished by the Director of Procurement, describing the proposed project and indicating the estimated quantities of materials, supplies, and equipment to be required in connection with such project. The Director of Procurement shall, at such time, indicate to the Department or Federal agency involved the materials, supplies, and equipment which will be furnished by the Government and will issue instructions as to the manner and method of their requisition. The Government may furnish materials, supplies, and equipment in the case of non-federal projects only if the Government is making a grant of such items.

Section 9. All contracts and subcontracts for work on projects shall incorporate the necessary provisions to assure full compliance with all the applicable provisions of Regulation No. 1, Regulation No. 2, this Regulation, and the Emergency Relief Appropriation Act of 1935, and the following clauses shall be incorporated verbatim:

"The contractor and each subcontractor shall prepare the payrolls upon forms to be prescribed and in accordance with instructions to be furnished by the Works Progress Administration. Not later than the third day following the payment of the wages, a certified legible copy of each payroll, whether paid by the contractor or any subcontractor, shall be transmitted by the contractor to such office as nay be designated by the Works Progress Administration. The contractor and each subcontractor shall submit reports at such times and on such forms as may be required by the Works Progress Administration covering purchases of, and requisitions for, materials, together with such other information as nay be required to determine the progress and status of the completion of the work on the project.

"The contractor and each subcontractor shall report to the United States Department of Labor monthly, within five days after the close of each calendar month, upon forms to be prescribed, and in accordance with instructions to be furnished, by the United States Department of Labor, covering the number of persons on their respective payrolls directly connected with the project, the aggregate amounts of such payrolls and the man hours worked, and an itemized statement of the total expenditures for materials. The contractor shall also furnish to the United States Department of Labor the names and addresses of all subcontractors on the work, at the earliest date practicable.

"The Works Progress Administration, through its authorized agents, shall have the right to inspect all work as it progresses, and shall have access to all payrolls, records of personnel, invoices of materials, and any and all other data relevant to the performance of this contract.

"No person under the age of sixteen (16) years, and no one whose age or physical condition is such as to make his employment dangerous to his health or safety, or the health and safety of others, may be employed on the project. This paragraph shall not be construed to operate against the employment of physically handicapped persons, otherwise employable, where such persons may be safely assigned to work which they can ably perform.

"No person currently serving sentence to a penal or correctional institution shall be employed on the project.

"With respect to all persons employed on projects, except as otherwise provided in Regulation No. 2, (a) such persons shall be referred for assignment to such work by the United States Employment Service, and (b) preference in employment shall be given to persons from the public relief rolls, end, except with the specific authorization of the Works Progress Administration, at least ninety percentum (90%) of the persons employed on any project shall have been taken from the public relief rolls: Provided, however, that, expressly subject to the requirement of subdivision (b), the supervisory, administrative, and highly skilled workers on the project, as defined in the specifications, need not be so referred by the United States Employment Service.

"Except as specifically provided above, workers who are qualified by training and experience and certified for work on the project by the United States Employment Service shall not be discriminated against on any grounds whatsoever.

"Wages to be paid, or for which reimbursement is to be made, by the Federal Government may not be pledged or assigned, and any purported pledge or assignment shall be null and void."

Section 10. Contracts entered into pursuant to this Regulation shall not contain any provisions which shall conflict with, limit, or nullify any of the rules and regulations, including those contained herein, which have been prescribed by the President under the Emergency Relief Appropriation Act of 1935 or any of the provisions of said Act. All forms of such proposed contracts, except for non-federal projects, shall be submitted to the Works Progress Administration for prior approval.

Section 11. Nothing in this regulation shall be so construed or applied as to be in conflict with the provisions of section 1 of Executive Order No. 6166 of June 10, 1933, issued and promulgated pursuant to section 1, Title III, of the act of March 20, 1933, 48 Stat. 16.

Section 12. The Works Progress Administration is hereby authorized to issue, from time to time, administrative orders relating to the administration and operation of this Regulation.

FRANKLIN D. ROOSEVELT

The White House,
June 24, 1935.