stating that statutory grants of authority to the President “must be exercised consistently with the structure and purposes of the statute that delegates that power”
How later courts described this case
- stating that statutory grants of authority to the President “must be exercised consistently with the structure and purposes of the statute that delegates that power”
- holding that FPASA authorized the president to require government contractors to comply with price and wage controls
- holding that FPASA authorized the president to require contractors to comply with price and wage controls
- applying the “close nexus” test in resolving a Procurement Act case
Written by the judges who cited it.
The opinion
ROBB, Circuit Judge,
dissenting:
I would affirm the judgment of the District Court. Because of the constraints of time I state my reasons only briefly.
I.
At the oral argument in this court counsel for the government rightly conceded that “[i]f the court were to conclude that these guidelines [established by the Executive Order] were an exercise of mandatory economic controls within the . . . full meaning of that term . . the government would lose.” In. my opinion the government does lose, because the guidelines are mandatory. Contractors who fail to comply are threatened with the loss of contracts for the payment of millions, perhaps hundreds of millions of dollars. 1 No amount of sophisticated or metaphysical *817 argument can convince me that compliance under threat of such massive economic sanctions is voluntary. 2 Accordingly, I think the government must fail on this ground alone.
II.
The majority concludes that the compliance program is voluntary. With this finding as a premise the majority rests its case on the Federal Property and Administrative Services Act of 1949. 40 U.S.C. § 471 et seq. (Act of June 30,1949, P.L. 81-152) (the Federal Property Act). This Act established the General Services Administration, headed by an Administrator. In particular the majority relies on section 205(a) of the Act, 40 U.S.C. § 486 (a) which provides that “The President may prescribe such policies and directives, not inconsistent with the provisions of this Act, as he shall deem necessary to effectuate the provisions of said Act, which policies and directives shall govern the Administrator and executive agencies in carrying out their respective functions hereunder.” The majority concludes that the wage and price guidelines prescribed in this case are policies and directives not inconsistent with the provisions of the Act and may be deemed necessary to effectuate its provisions. This conclusion is derived from (1) section 2 of the Act, 40 U.S.C. § 471 , which, says the majority, “[sets forth the goal of] an ‘economical and efficient system for . . . procurement and supply’ ”, and (2) section 201, 40 U.S.C. § 481 , which “directs that the Administrator of General Services chart policy and procure supplies in a manner ‘advantageous to the Government in terms of economy, efficiency, or service, and with due regard to the program activities of the agencies concerned.’ ”
Careful analysis of the Federal Property Act demonstrates, I think, that the purposes of the Act and the policies and directives which it contemplates have nothing whatever to do with the fixing of wages and prices by executive authority. The purpose of the Act is to create efficient machinery for the procurement and management of government property; it is not even remotely concerned with the use of procurement authority to accomplish social and economic objectives.
The purpose of the Federal Property Act is stated in general by its title “AN ACT To simplify the procurement, utilization and disposal of Government property, to reorganize certain agencies of the Government and for other purposes.” The origin and purposes of the Act were fully explained on the floor of the House by Representative Holifield, floor manager of the bill. 95 Cong.Rec., 81st Cong., 1st Sess. p. 7441 et seq. Mr. Holifield pointed out that the bill was based on the recommendations of the Commission on Organization of the Executive Branch of the Government, popularly known as the Hoover Commission. The intention of Congress said Mr. Holifield, was to coordinate the supply and procurement activities of the federal government:
The Federal Government needs immediately a comprehensive, workable plan for property management. This plan, had it been established in the past, would have returned enormous savings to the Federal Government through the elimination of competition by the executive agencies for the same articles in the same markets, by prudent buying, and including quantity purchases. This is made even more glaringly apparent when we consider that losses to the Government are particularly acute when one agency has purchased new articles while at the same time, another agency in the Government has been disposing of the same articles by sale at low prices or storing same in their basements. There is a definite need for a clearing house of information as to goods on hand and usable. In the role of the General Services Administration, we see this defect cured. Through lack of central coordination, waste and losses have occurred in the field of ware *818 housing and other space utilization. Appearing before our committee, the former Federal Works Administrator, General Fleming, said that the Department of Agriculture paid $4,000,000 a year rent to store wool in private buildings in the New England area. While at the same time in this particular area, there was enough empty, available, warehouse space, owned by the Government, which might have been pressed into service for this purpose.
95 Cong.Rec. 7442.
Turning to what became section 205(a) of the Act, Mr. Holifield explained that because “property management affects every executive agency . . . the bill expressly authorizes the President, himself, to prescribe policies and directives, and specifies that these Presidential policies and directives shall govern — not merely guide— not only the Administrator but all executive agencies in carrying out these functions.” Id. at 7441 . In other words Congress intended the President to exercise his authority to assure that uniform policies and methods would be adopted by the various procurement agencies. This is the plain and reasonable explanation of section 205(a). There was no intention to authorize the President to enact economic controls by executive fiat.
The majority argues that regulation of wages and prices is an appropriate step in achieving “the goal of an ‘economical and efficient system for . . . procurement and supply.’ ” The majority says this “goal” is specified in the congressional declaration of policy in section 2 of the Act, 40 U.S.C. § 471 .
When the few words excerpted from section 2 by the majority are read in the context of the rest of that section it is apparent that, the economy and efficiency to which Congress refers are related to the activities and functions described by Mr. Holifield in his explanation of the bill, that is to the housekeeping functions and activities of the federal government. Thus the section states the intention of Congress to provide for economy and efficiency not only with respect to contracting, but also with respect to “inspection, storage, issue, specifications, property identification and classification, transportation and traffic management . . . repairing and converting, establishment of inventory levels, [and] establishment of forms and procedures.” Id. I detect no intimation in this plain statement of purpose that Congress intended to authorize wage and price regulation by executive order. If Congress had intended any’ such authorization I think it would have said so. I agree with the conclusion of the district judge, expressed in his opinion, that
the Congress has always occupied the field of wage and price controls. Delegation of mandatory control power as well as the standards and means by which controls may be instituted has been carefully limited. On the few and extraordinary occasions when controls have been found necessary, Congress has granted such authority expressly, by positive legislation limited both in scope and particularly in duration. This consistent treatment of controls through specific legislation precludes any inference that Congress has intended to confer control authority by implication. (P. 98)
The government’s argument in this case illustrates and emphasizes the need for specific congressional authorization for price and wage regulation. Carried to its logical end that argument means that the executive’s power to regulate industry and business is limited only by his judgment as to what will promote economy and efficiency in the government. I cannot believe that Congress ever contemplated or intended such an extension of executive power.
III.
The majority cites other executive actions taken in the past under the purported authority of the Federal Property Act. As the majority acknowledges however many of these actions were subsequently validated by legislation, others have never been challenged. In any event I think an argu *819 ment based upon these precedents is a weak reed. That executive orders in the past may have stretched or exceeded statutory or constitutional limitations does not mean that the order in this case is valid.
IV.
Section 3(b) of the Council on Wage and Price Stability Act, 12 U.S.C. § 1904 note, provides:
Nothing in this Act . . . authorizes the continuation, imposition, or reimposition of any mandatory economic controls with respect to prices, rents, wages, salaries, corporate dividends, or any similar transfers.
The government says this statute is irrelevant to the case before us because the authority for requiring government contractors to meet wage and price standards derives from the Federal Property Act, not from the Council on Wage and Price Stability Act, and because in any event the wage-price standards are not mandatory wage and price controls.
As I have said, I am not persuaded by the argument that the wage and price controls are voluntary. Nor do I agree that the Council on Wage and Price Stability Act is entirely irrelevant to our case. True, the wage and price controls do not rely upon the Act. Nevertheless the language and history of that Act strongly suggest that Congress disapproved the reimposition of wage and price controls. Furthermore, it is a fair inference from this Act that Congress believed that there was no other statute which authorized the imposition of such controls by the Executive.
I respectfully dissent. I am authorized to say that Judge WILKEY joins in this opinion.
. “The federal government is a major purchaser of goods and services and has direct procurement relationships with most major American industries. Currently, the total value of federal purchases is approximately $110 billion annually. . . . “The certification requirements for federal procurement under the OFPP Policy Statement apply to contracts in excess of $5 million. This threshold includes approximately 50 percent of all procurement dollars. The actual percentage is approximately 65 to 70 percent because many of the companies must certify compliance for contracts exceeding $5 million also routinely bid on small contracts.” Affidavit of James D. Currie, Acting Administrator for Federal Procurement Policy and acting head of the Office of Federal Procurement Policy, Office of Management and Budget, Executive Office of the President. (App., Vol. 3, pps. 648, 649)
. The government cites United States Brewers Ass’n, Inc. v. EPA,, 600 F.2d 974 (D.C.Cir. 1979). In that case however the statute made compliance with the EPA guidelines by federal executive agencies mandatory. 42 U.S.C. § 3256 (e) (1970).