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Approved Code No. 244-Supplement No. 1 Registry No. 1616-2-31
NATIONAL RECOVERY ADMINISTRATION
CODE OF FAIR COMPETITION
(A Division of thb construction Industry)
AS APPROVED ON FEBRUARY 17, 1934
GOVERNMENT PRINTING OFFICE
WASHINGTON : 1934
For sale by the Superintendent of Documents, Washington, D.C. Price 5 cents
Approved Code No. 244-Supplement No. 1
Registry No. 1616-2-31
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Printing Office, Washington, D.C., and by district offices of the Bureau of
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Approved Code No. 244. Supplement No. 1
CODE OF FAIR COMPETITION
GENERAL CONTRACTORS INDUSTRY
As approved on February 17, 1934
SUPPLEMENTARY CODE OF FAIR COMPETITION FOR THE GENERAL
A DIVISION OF THE CONSTRUCTION INDUSTRY
An application having been duly made, pursuant to and in full
compliance with the provisions of Title I of the National Industrial
Recovery Act, approved June 16, 1933, and pursuant to and in full
compliance with the provisions of Section 5 of Article VIII of Chapter I
of the Code of Fair Competition for the Construction Industry,
approved January 31, 1934, for approval of Chapter II of said Code,
which Chapter II is applicable to the General Contractors Division
of the Construction Industry, and hearings having been held thereon,
and the Administrator having rendered his report containing an
analysis of said Chapter II and of said Code of Fair Competition as
modified by the addition thereto of said Chapter II, together with his
recommendations and findings with respect thereto, and the Ad-
ministrator having found that the said Chapter II and the said Code
of Fair Competition, asmodified by the addition thereto of said Chapter
II, comply in all respects with the pertinent provisions of Title I of
said Act, and that the requirements of Clauses (1) and (2) of Subsec-
tion (a) of Section 3 of the said Act have been met:
NOW, THEREFORE, I, Franklin D. Roosevelt, President of the
United States, pursuant to the authority vested in me by Title I of
the National Industrial Recovery Act, approved June 16, 1933, and
otherwise, do adopt and approve the report, recommendations and
findings of the Administrator and do order that the said Chapter II
be and it is hereby approved, and that the previous approval of said
Code of Fair Competition for the Construction Industry is hereby
modified to include an approval of said Code in its entirety as modified
by the addition thereto of said Chapter II.
FRANKLIN D. ROOSEVELT.
HUGH S. JOHNSON,
THE WHITE HOUSE,
February 17, 1934.
LETTER OF TRANSMITTAL
The lWhite House.
SIR: This is a report on Chapter II of the Code of Fair Competition
for the Construction Industry, which Chapter is a revision, after
public hearings conducted in Washington on September 6; 1933, and
on November 20, 1933, of a Code of Fair Competition for General
This Chapter, applicable specifically to the General Contractors
Division of the Construction Industry, supplements the basic Code
of Fair Competition for the Construction Industry, described as
Chapter I of such Code, which was approved by you on January 31,
1934. The hearings were conducted in accordance with the provisions
of the National Industrial Recovery Act.
The General Contractors are of major importance in the Construc-
tion Industry. They organize and correlate the activities of various
operations and sub-contractors as divisions of the Construction Indus-
try who furnish the products of skilled trades. General Contractors
are usually divided into several sub-groupings such as building, high-
way, heavy construction and engineering contractors. Provision is
made in the code for inclusion of specific provisions for such sub-
divisions of this division of the Construction Industry and for their
PROVISIONS FOR HOURS AND WAGES
The provisions for hours and wages are set out in Chapter I of the
Construction Code, which was approved by you on January 31, 1934,
and the same provisions are applicable, under this Chapter, to the
General Contractors division.
ECONOMIC EFFECT OF THE CODE
Due to the magnitude of the General Contractors' Industry, and
the mass of statistics relating to it, it is difficult to make an epitomi-
zation as to the economic effect of the Code. Construction volume
approached $11,500,000,000 in 1928 and direct employment in 1929
ranged from 3,200,000 to 3,400,000. It is safe to say, that with the
prohibition of unfair trade practices, and the establishment of uniform
rates of pay and hours of work, that more wholesome conditions will
prevail in th;s industry and that employers, employees and the public
will all be benefited. In the South the established minimum rate will
vastly increase purchasing power and greatly benefit the worker.
The Deputy Administrator in his final report to me on said Chapter
II Code of Fair Competition for the Construction Industry, as modi-
fied by the addition thereto of said Chapter II, having found as herein
set forth and on the basis of all the proceedings in this matter:
I find that:
(a) Said Chapter II and said Code of Fair Competition for the
Construction Industry, as modified by the addition thereto of said
Chapter II, is well designed to promote the policies and purposes of
Title I of the National Industrial Recovery Act, including removal of
obstructions to the free flow of interstate and foreign commerce which
tend to diminish the amount thereof and will provide for the general
welfare by promoting the organization of industry for the purpose of
cooperative action among the trade groups, by inducing and maintain-
ing united action of labor and management under adequate govern-
mental sanctions and supervision, by eliminating unfair competitive
practices, by promoting the fullest possible utilization of the present
productive capacity of industries, by avoiding undue restriction of
production (except as may be temporarily required), by increasing
the consumption of industrial and agricultural products through
increasing purchasing power, by reducing and relieving unemploy-
ment, by improving standards of labor, and by otherwise rehabili-
(b) Said Chapter II and the Code of Fair Competition for the
Construction Industry, as modified by the addition thereto of said
Chapter II, as approved, complies in all respects with the pertinent
provisions of said Title of said Act, including without limitation sub-
section (a) of Section 3, Sub-section (a) of Section 7, and sub-section
(b) of Section 10 thereof; and that the applicant association is an
industrial association truly representative of the aforesaid Industry;
and that said association imposes no inequitable restrictions on ad-
mission to membership therein.
(c) Said Chapter II and the Code of Fair Competition for the Con-
struction Industry, as modified by the addition thereto of said Chap-
ter II, is not designed to and will not permit monopolies or monopo-
(d) Said Chapter II and the Code of Fair Competition for the
Construction Industry, as modified by the addition thereto of said
Chapter II, is not designed to and will not eliminate or oppress small
enterprises and will not operate to discriminate against them.
(e) Those engaged in other steps of the economic process have not
been deprived of the right to be heard prior to approval of said Chapter
II and of said Code, as modified by the addition thereto of this Chapter
For these reasons, therefore, I recommend approval of said Chapter
II and said Code, as modified by the addition thereto of said Chapter II
HUGH S. JOHNSON,
Adm in istralor.
FEBRUARY 16, 1934.
GENERAL CONTRACTORS' DIVISION OF THE CONSTRUC-
SECTION 1. A General Contractor.-The term "general contractor"
is hereby defined to mean without limitation any individual, partner-
ship, association, trust, trustee, trustee in bankruptcy, receiver, cor-
poration or agency which undertakes, whether by formal contract or
otherwise, to direct, superintend, coordinate and execute either
directly or through others, the work of constructing, substantially in
its entirety, any fixed structural or physical improvement, or a modi-
fication thereof, or an addition or repair thereto, excluding any such
operation aggregating in its entirety less than the sum of $1,000.00.
It is recognized that the function of the architect or professional
engineer is to design or plan construction projects and acting inhis
professional capacity to supervise the execution thereof on behalf of
the owner. Such architects or professional engineers in the perform-
ance of their normal and customary functions shall not be deemed to
be included in the foregoing definition of a general contractor.
SECTION 2. The term "Subdivision of the General Contractors
Division of the Industry," or "Subdivision" shall mean a defined
section of this division, established for administration purposes.
Without limitation upon any additional subdivisions, the subdivisions
which shall be established and defined in Sub-Chapters II A, II B
and II C hereto are:
Chapter II A_ Building Contractors Subdivision,
II B__-Heavy Construction and Railroad Con-
II C__ Highway Contractors Subdivision.
The subdivisions under this chapter may in their respective sub-
chapters amplify and expand the provisions of this Code, and the
same, when approved by the Administrator, shall apply to the
respective subdivisions so proposing the same, with the same force
and effect as any other provisions of this Code.
SECTION 3. The term "Association" as used herein shall mean
The Associated General Contractors of America.
SECTION 4. The term "sub-contractor"' as used herein shall mean
anyone other than an employee who enters into a contract for the
performance of an act with the general contractor who has already
contracted or otherwise arranged for its performance.
To further effectuate the policies of the Act and to administer this
Code within the General Contractors Division and its subdivisions
there shall be established a Divisional Code Authority for General
Contractors as provided herein.
A. DIVISIONAL CODE AUTHORITY
SECTION 1.-The Divisional Code Authority for General Contrac-
tors intended to be referred to as "The Divisional Code Authority",
shall be composed of seventeen (17) members, twelve (12) of whom
shall be appointed annually by the Executive Committee of the
Association from its Board of Governors and/or its Advisory Board,
and each member so appointed shall serve until the new annual
Executive Committee of the Association shall reappoint him or
appoint his successor. The twelve (12) members so appointed shall
appoint to the Divisional Code Authority five (5) additional persons,
to be approved by the Administrator, engaged in the business of
general contracting who are not at the time of selection representa-
tive of or responsible to members of the Association and each of the
five (5) members so appointed shall serve until he is so reappointed
or his successor selected, or until he or his successor shall be selected
by the non-members of the Association pursuant to a method of
selection satisfactory to and approved by the Administrator.
SECTION 2. The Divisional Code Authority shall have, in addition
to the powers and duties conferred upon it by Chapter 1 thereof, the
following powers and duties applicable to the General Contractors
(a) Its members or its authorized representatives may upon request
attend meetings of any administrative agency established for any
(b) It. is authorized under the supervision of and in cooperation
with the Construction Code Authority in the exercise of tle power
conferred upon it in Section 2 (d) of Article IV A of Chapter I to
require the registration in such manner as it may deem appropriate
of all construction work undertaken by general contractors as herein
defined exceeding two thousand dollars ($2,000.00) in value, and, in
order to defray the expenses of such registration, of the collection of
the reports and the data herein required and of the administration
of this code, to charge and collect as a registration fee not to exceed
one tenth of one percent of the value of the work. From the funds
so collected, The Divisional Code Authority shall defray its expenses,
and the general contractors' proportionate share of the expenses of
the Construction Code Authority, in administering this Code, and
make an equitable apportionment between the Divisional Code
Authority and the subdivisional committees or agencies as shall
cooperate in procuring the registration of such work or services.
B. SUB-DIVISIONAL ADMINISTRATIVE COMMITTEES OR AGENCIES
SECTION 1. There shall be established for each sub-division of the
General Contractors Division an Administrative Committee or
Agency which shall, within the limitations provided herein, administer
within such sub-division the provisions of this Code applicable specif-
ically to such subdivision. The procedure for establishing each such
administrative committee or agency shall be defined in the sub-
chapter pertaining to that sub-division of the General Contractors
SECTION 2. Each such subdivisional administrative committee or
agency shall have in addition to such duties and powers as the Divi-
sional Code Authority may delegate, the following powers and duties:
(a) It may establish rules and regulations for the conduct of its
affairs and may appoint such committees, agencies and representatives
and delegate to them such of its powers and duties as it may deem
necessary for the proper discharge of its functions hereunder.
(b) It shall cooperate with the Divisional Code Authority in making
investigations as to the functioning and observance of this Code within
its subdivision at its own instance or on complaint of any person
affected, and shall collect from members of the subdivision and com-
pile and furnish to the Divisional Code Authority, any reports and
other information required under the Act.
(c) It shall study the trade practice provisions applicable to its
own sub-division, and the operation thereof, and may make such
recommendations to the Divisional Code Authority as it deems
desirable for modification or addition thereto. Such recommenda-
tions, upon approval of the Administrator after such notice and
hearing as he may prescribe, shall become a part of this Code and
have full force and effect as provisions hereof.
(d) It shall receive and so far as possible adjust all complaints as
to trade practices between members of its sub-division in the opera-
tion of the provisions of this Code applicable to that sub-division.
(e) It. may prescribe bidding rules, requiring the inclusion in each
bid of all direct and indirect costs properly defined, and methods for
administering such rules, and such rules and methods, when approved
by the Administrator, shall apply to the members of its sub-division.
SECTION 1. Controversies or complaints within any sub-division
shall be fully determined and adjusted locally so far as practicable,
otherwise by the administrative committee or agency established for
SECTION 2. Any party directly affected shall have the right of
appeal to the Divisional Code Authority and of a prompt hearing
and decision, under such rules of procedure and proper charges to
cover costs of investigation and hearing as it may prescribe, in
respect of any decision, rule, regulation, order or finding made by
any subdivisional administrative committee or agency.
SECTION 3. The Divisional Code Authority shall have original juris-
diction of all controversies affecting more than one subdivision of
ARTICLE IV-PRACTICES AS TO SUBMITTING BIDS
SECTION 1. In order that whenever contracts are to be let by com-
petitive bidding the terms of the competition shall be such as to insure
fair competition, a general contractor, in submitting bids for the con-
struction or improvement of either private or public works, shall be
governed by the following provisions:
(a) All bids shall be in writing, signed by an authorized representa-
tive of the bidder. Alternate proposals may be submitted with the
original bid, providing the same privilege is extended to all bidders.
(b) A general contractor shall not take advantage in his bid of any
special privilege, favor or understanding had with him by persons in
control of the award. This, however, shall not prevent any such com-
petitor, even though not the lowest bidder, from taking such contract,
providing the award is made at his original competitive price, nor shall
it prevent any contractor from accepting the award of such contract
at any price where no competitive bids are taken.
(c) A general contractor shall not revise his bid after bids have been
opened in order to improve his position with the owner. Bona fide
mistakes discovered after the opening of bids shall be grounds for
Where supplemental bids are requested because of substantial
changes in the plans and/or specifications, such bids shall reflect only
the true value of the changes.
A general contractor shall not bid upon a private construction proj-
ect upon which bids have been opened, or at any time within 90 days
next thereafter, except there be substantial changes in the plans and
(d) Standards of accounting, cost keeping and estimating may be
prescribed by sub-divisions for the purpose of determining a fair price
for services or products and systems for the interchange of such infor-
mation subsequent to the award of specific work may be established.
Such standards shall be subject to the approval of the Divisional Code
Authority and of the Administrator.
ARTICLE V-GENERAL TRADE PRACTICES
SECTION 1. A general contractor bidding upon or undertaking to
execute construction contracts shall be properly qualified by capital,
organization and experience. He shall own or have available suffi-
cient and proper equipment to execute the work bid upon or furnish
evidence of his ability to acquire same.
SECTION 2. Credit Injormation.-A general contractor shall make
available upon request to those responsible for the award of construc-
tion contracts, pertinent information as to his current financial posi-
tion, using the Standard questionnaire forms developed and approved
by and available through the Joint Conference on Construction Prac-
tices, Washington, D.C., or other forms approved or prescribed by
the Administrator, and may request equivalent information from the
SECTION 3. Records and Accounts.-A general contractor shall
maintain and employ an adequate system of records and accounts,
which system shall clearly show the allocation as to each specific
project of all funds received or disbursed on account thereof.
SECTION 4. Contractual Agreenments.-The following bases of con-
tractual agreements are recognized as fair trade practices; guaranteed
price, cost of the work plus a fee, unit price, lump sum, and other
contractual methods not inimical to the public interest, providing
that the regulations contained in this Code of Fair Competition
SECTION 5. Prohibited Agreements.-A general contractor shall not
enter into any agreement or understanding prior to the award of
a contract where such award is made as a result of competitive
bidding by which agreement or understanding he agrees to accept
a lesser amount for his services than the amount stated in his bid.
SECTION 6. Disputes.--A general contractor shall be ready and
willing to settle disputed matters promptly. Where arbitration as
a method of settling disputed matters is agreed upon, the rules of
procedure as established by the American Arbitration Association
shall govern, except as otherwise required by law or contract. Pay-
ment, exceeding that sufficient to cover the amount in dispute,
shall not be withheld from the parties affected.
SECTION 7. Payments by General Contractor.-Funds received by
a general contractor for construction work performed or to be per-
formed by him shall be accepted and applied first for the purpose of
paying amounts due from him to others in respect of any portion of
such work including amounts due to employees, material men, sub-
contractors and others. These provisions shall not be construed to
require a general contractor to keep in separate bank accounts or
deposits the funds received under separate contracts, provided that
he shall maintain books of accounts which shall clearly show the al-
location to each and every contract of the funds deposited in his
general or special bank account or accounts, and he shall devote the
final payments to him from the owner, within ten days after the re-
ceipt thereof, to the payment of the balances due from him to such
employees, material men, sub-contractors and others, provided satis-
factory evidence is furnished showing that all outstanding claims
against. said parties, for which the general contractor would otherwise
be liable, have been fully satisfied or provided for. Earlier payments
and/or greater amounts may be mutually agreed upon.
Nothing in this section shall supersede any Federal, State or local
laws imposing more stringent requirements with respect to matters
referred to herein.
SECTION 8. Rebates.-A general contractor shall not give or accept
rebates, refunds, allowances, unearned discounts or special services to
or from sub-contractors, material vendors or others which are not
extended under like terms and conditions to or by other sub-contrac-
tors, material vendors and others of equal credit rating.
SECTION 9. Financing.-A general contractor shall not permit or
require sub-contractors or material vendors to finance his accounts
unless such arrangement is expressly provided for in the original
contract between the parties.
SECTION 10. W1airer of Legal Rights.-A general contractor shall
promptly inform sub-contractors with whom he is contracting of any
waiver of lien rights executed by the general contractor.
SECTION 11. In competitive bidding a general contractor shall not
offer or agree to assume the responsibility for deficiencies in or omis-
sions from the plans and/or specifications, which he has not prepared
or caused to be prepared by others, and upon which the contract is
based, for the purpose or with the effect of securing an unfair
SECTION 12. Labor Welfare.-A general contractor shall provide
for the welfare and safety of his workmen, complying with all applic-
able laws governing such matters. Except where such laws otherwise
require, he shall comply with the provisions of the safety manual here-
tofore adopted by the Associated General Contractors of America.
SECTION 13. No Prison Labor.-A general contractor shall not
employ prison labor in the execution of the work.
SECTION 14. Payment of Wages.-A general contractor shall as
promptly as possible make payment of all wages due, in lawful cur-
rency of the United States, or by a negotiable check at par therefore
payable on demand. A general contractor or his agents shall accept
no rebates directly or indirectly on such wages, nor give anything of
value orextend favors to any person for the purpose of influencing
rates of wages or the working conditions of his employees.
ARTICLE VI-REFERENCE TO PROVISIONS OF CHAPTER I
The mandatory provisions required by the Act, and all other of the
provisions contained in Chapter I of this Code (approved January
31, 1934) except as otherwise provided in this Chapter II, apply
with like force and effect within this division of the Construction
Industry, as if incorporated herein.
Subject to the provisions of Section 2, (c) of Article IV, B, of Chap-
ter I of this Code, the provisions of this chapter, except as to provisions
required by the Act, may be modified on the basis of experience or
changes in circumstances, such modifications to be based upon applica-
tion to the Administrator and such notice and hearing as he shall
specify, and to become effective on his approval.
ARTICLE VIII-EFFECTIVE DATE
This chapter shall become effective on the thirtieth (30th) day
after its approval by the President.
Approved Code No. 244 Supplement No. 1.
Registry No. 1616-2-31.
UNIVERSITY OF FLORIDA
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