Approved Code No. 244-Supplement No.1 Registry No. 1616-2-31 

NATIONAL RECOVERY ADMINISTRATION 

SUPPLEMENTARY 

CO·DE OF FAIR COMPETITION 

FOR THE 

I 

GENERAL CONTRACTORS 

INDUSTRY 

(A Division of th Construction Industry) 

AS APPROVED ON FEBRUARY 17, 1934 

BY 

PRESIDENT ROOSEVELT 

WE DO OUR PART 

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WASHINGTON : 1934 

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Approved Code No. 244. Supplement No. 1 

CODE OF FAIR COMPETITION 

FOR THE 

GENERAL CONTRACTORS INDUSTRY 

As approved en February 17, 1934 

BY 

PRESIDENT ROOSEVELT 

EXECUTIVE ORDER 

SuPPLEMENTARY ConE OF FAIR CoMPETITION FOR THE GENERAL 

CoNTRAC!ORsiNnusTRY 

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 N ationa.l 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 Administrator having found that the said Chapter II and the said Code 

of Fair Competition, as modified 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 Subsection (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. 

Approval recommended: 

HuGH S. JoHNsoN, 

AdministTator. 

THE WHITE HousE, 

February 17, 1934. 

FRANKLIN D. ROOSEVELT. 

41082°----376-99----34 (1) 
LETTER OF TRANSl\tfiTTAL 

The PRESIDENT, 

The White House. 

SrR: 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 

Contractors. 

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 INDUSTRY 

The General Contractors are of major importance in the Construction Industry. They organize and correlate the activities of various 

operations and sub-contractors as divisions of the Construction Industry who furnish the products of skilled trades. General Contractors 

are usually divided into several sub-groupings such as building, highway, heavy construction and engineering contractors. Provision is 

made in the code for indusion of specific provisions for such subdivisions of this division of the Construction Industry and for their 

self government. 

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 EFl''ECT OF THE CODE 

Due to the n1agnitude of the General Contractors' Industry, and 

the mass of statistics relating to it, it is difficult to ma.ke an epitomization as to the economic effect of the Code. Construction volun1e 

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 

rate of pay and hours of work, that more wholesome conditions will 

prevail in th1s 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. 

(2) 
3 

FINDINGS 

The Deputy Administrator in his final report to rne on said Chapter 

II Code of Fair Competition for the Construction Industry, as modified 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 an1ong the trade groups, by inducing and maintaining united action of labor and management under adequate governmental 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 unernployment, by improving standards of labor, and by otherwise rehabilitating industry. 

(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 subsection (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 admission to membership therein. 

(c) 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 permit monopolies or monopolistic practices. 

(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 

II thereof. 

For these reasons, therefore, I recommend approval of said Chapter 

II and said Code, as modified by the addition thereto of said Chapter II 

thereof. 

Respectfully, 

FEBRUARY 16, 1934. 

HuGH S. JoHNSON, 

Administrator. 
CHAPTER II 

GENERAL CONTRACTORS' DIVISION OF THE CONSTRUCTION INDUSTRY 

ARTICLE I-DEFINITIONS 

SECTION 1. A General ContTactor.-The term "general contru,ctor" 

is hereby defined to mean without limitation any individual, partnership, association, trust, trustee, trustee in bankruptey, receiver, corporation 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 modification thereof, or an addition or repair thereto, excluding any such 

operation aggregating in its entirety less than the smn of $1,000.00. 

It is recognized that the function of the architect or professional 

engineer is to design or plan construction projects nnd acting inhis 

professional eapacity to supervise the execution thereof on behalf of 

the owner. Sueh architects or professional engineers in the performance of their normal and custon1ary functions shall not be deemed to 

be included in the foregoing definition of a general contractor. 

SECTION 2. The term "Subdivision of the General Contraetors 

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 Contractors Subdivision, 

II c __ Highway Contractors Subdivision. 

The subdivisions under this c.hapter may in their respective subchapters 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 effeet as any other provisions of this Code. 

SECTION 3. The term ''Association " as used herein shall 1nean 

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 ha already 

contracted or otherwise arranged for its performance. 

ARTICLE II-ADMINISTRATION 

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. 

(4) 
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A. DIVISIONAL CODE AUTHORITY 

SECTION 1.-The Divisional Code Authority for General Contractors 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 Administrat.or, engaged in the business of 

general contracting who are not at the time of selection representative 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 ~hall be selected 

by the non-members of the Association pursuant to a method of 

selection sa.tisfactory to and approved by the Administrator. SECTIO_ 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 

Division. 

(a) Its members or its authorized representatives may upon request 

attend meetings of any administrative agency established for any 

sub-division. 

(b) It is authorized under the supervision of and in cooperation 

with the Construction Code Authority in the exercise of the pO\~ r 

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 

Ageney which shall, within the limitations provided herein, administer 

within such sub-division the provisions of this Code applicable specifically to such subdivision. The procedure for establishing each such 

administrative committee or agency shall be defined in the subchapter pertaining to that sub-division of the General Contractors 

Division. 
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SECTION 2. Each such subdivisional administrative committee or 

agency shall have in addition to such duties and powers as the Divisional Code Authority may delegate, the following powers and duties: 

(a) It may establish rules and regulations for the conduct of its 

affairs and may appoit'1t such committee , 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 

inve tigations as to the functioning and obsen-ance of this Code within 

its subdi\ision at its own instance or on complaint of any person 

affected, and shall collect from members of the subdivision and compile and furnish to the Di,-isional Code Authority, any reports and 

other information required under the Act. 

(c) It shall study the trade practice provisions applicable to its 

wn sub-di,ision, and the operation thereof, and may make such 

recommendations to the Divisional Code Authority as it deems 

desirable for modification or addition thereto. Such recommendations, upon approval of the Administrator after such notice and 

hearing as he rnay 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 rnembers of its sub-division in the operation 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 rnethods for 

administering such rules, and such rules and methods, when approved 

by the Administrator, shall apply to the members of its sub-division. 

ARTICLE III-APPEALS 

SECTION 1. Controversies or complaints within any sub-division 

shall be fully determined and adjusted loeally so far as practicrtble, 

otherwise by the administrative committee or agency established for 

sueh subdivision. 

SECTION 2. Any party directly affeeted shall have the right of 

appeal to the Divisional Code Authority and of a prompt hearing 

and deeision, 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 adn1inistrative committee or agency. 

SECTION 3. The Divisional Code Authority shall have original juris- dietion of all controversies affecting more than one subdivision of 

General Contraetors. 

ARTICLE IV-PRACTICES AS TO SuBMITTING Bins 

SECTION 1. In order that whenever contracts are to be let by competitive bidding the terms of the competition shall be such as to insure 

fair competition, a general contractor, in ubmitting bids for the eonstruction 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 representative 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 
7 

control of the award. This, however, shall not prevent an:y such competitor, 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 a,:-lard 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 

withdrawal only. 

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 project upon ·which bids have been opened, or at any time within 90 days 

next thereafter, except there be substantial changes in the plnn and 

specifications. · (d) Standards of accmmting, 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 information subsequent to the award of specific work may be established. 

Such standards shall be subject to the approval of the DiYisional 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 capitrJ, 

organization and experience. He shall own or have availnble sufficient and proper equipment to execute the work bid upon or furnish 

evidence of his ability to acquire sa.me. 

SECTION 2. Credit lriformation.-A general contractor shall make 

available upon request to those responsible for the award of con truction contracts, pertinent information as to his current finan cial position, using the Standard questionnaire forms developed and approved 

by and available through the Joint Conference on Construction Practices, w·ashington, D.C., or other forms approved or pre cribed by 

the Administrator, and may request equivalent information from the 

owner. 

SECTION 3. Records and Accounts.-A general contructor shall 

1naintain 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 Agreements.-The following bases of contractual 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 

are met. 

SEcTION 5. Prohibited Agreements.-A general contractor shall not 

enter into any agreement or understanding prior to the award of 

a contr.act 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. 'Vhere arbitration as 
8 

a method of settling disputed ma+ters is agreed upon, the rules of 

procedure as established by the American Arbitration Association 

shall govern, except as otherwise required by law or contract. Payment, 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 performed 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 am.ount due to employees, material men, subcontractors and others. The e provisions shall not be construed to 

require a general contractor to keep in separate bank accounts or 

depo its the funds received under separate contracts, provided that 

he shall maintain books of accounts which shall clearly show the allocation 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 receipt thereof, to the payment of the balances due from him to such 

employees, material men, sub-contractors and others, provided satisfactory evidence is furnished showing that all outstanding claims 

against said parties, for which the general contractor would otherwise 

be liable, hr~ve 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-contractors, 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. liJ aiver of Legal Rights.-A general contractor shall 

promptly inform sub-contractors with whom he is contracting of any 

wRiver of lien rights executed by the general contractor. 

SECTION 11. In competitive bidding a general eontractor shall not 

offer or agree to assume the responsibility for deficiencies in or omissions 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 seeuring an unfair 

competitive advantage. 

SECTION 12. Labor VlTelfare.-A general contractor shall provide 

for the welfare and safety of his workmen, con1plying with all applicable laws governing such matters. Except where such laws otherwise 

require, he shall comply with the provisions of the safety manual heretofore 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 liJ ages.-A general contractor shall as 

promptly as possible make payment of all wages due, in lawful currency of the United States, or by a negotiable check at par therefor 
9 

payable on demand. . A general contractor or his agents shall accept 

no rebates directly or indirectly on such wages, nor give anything of 

value or·· extend favors to any person for the purpcse 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 tills Chapter II, apply 

with like force and effect within this division of the Construction 

Industry, as if ineorporated herein. 

ARTICLE VII-l\10DIFICA.TION 

Subject to the provisions of Section 2, (c) of Article IV, B, of Chapter I of tills Code, the provisions of tills 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 application 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. 

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UNIVERSITY OF FLORIDA 

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