Evening star. [volume] (Washington, D.C.) 1854-1972, 1929-04-11
TRADE COMMISSION.
WILL HEAR CHARGE
OF BID PEDDL|NG'
General Contractors Accused
of Trafficking in Govern
ment Construction Jobs.
"UNFAlR PRACTICES"
HIT BY ASSOCIATION
Law Does Not Prevent Shopping"
Said to Encourage Cut
Rate Tactics.

A complaint that general contractors
on Government building operations
shop" for bids from subcontractors--
q practice said to have a "demoralizing
and perniciouS" effect on the building
industry-will be laid before the Fed
eral Trade Commission this afternoon
by the National Association of Builders
Exchanges, it was learned today.
At least one alleged case of IBID
peddling" by a general contractor
awarded contract for one of the huge
structures included in the Federal build
ing program in Washington is the basis
of the complaint which the national as
ISOLATION will cite as an unfair trade
practice" in the appeal to the Federal
Trade Commission for an Investigation.
While explaining that there is moth
ing in law to prevent general con-
tractor awarded Government job
from later seeking a lower bid from
subcontractor than the one he made,
Earl F. Stokes, executive secretary of
the National Association of Builders
Exchanges. charges that such practice
brings into the picture the cut-rate
subcontractor who is willing to do any
thing to get job, even though he takes
1t at a loss"
This type of bidder. says Mr.. Stokes.
lis frequently incompetent, poorly
financed using unfair methods. shoddy
materials" and otherwise is objectiona-
bic.
Appealed to McCarl.
The complaint is made at the in
stance of the Builders & Manufac-
turerS' Exchange of the District, an or
gan1zation of prominent local contrac-
tors and Subcontractors, which is affil-
lated with the national organiza ton.
Decision to take the complaint to the
Federal Trade Commission was reached
after the national association had laid
the matter before Controller General
McCarl of the Treasury Department
and the office of James A. Wetmore,
supervising architect of the Treasury
Department. Both Gen. McCarl and
Carl T. Schuneman, Assistant Secretary
of the Treasury, who replied for Mr..
Wetmore. declined to initiate steps de-
signed to regulate the selection of the
subcontractor as suggested by the ma
tional exchange. Government inspectors
are employed to see that Federal build
1ngs are erected according to specifi-
cations, general contractors being held
responsible.
Gen. McCarI, in his reply, stated that
while his Office was interested in econ
of1y and efficiency in the conduct of the
Governments business and in securing
observance of the terms of appropria-
tons made by Congress, there appears
nothing requiring action by this office
to protect the interests of the United
States" on the basis of the complaint
by the exchange
In correspondence with the SUPER
Vising architect, the exchange, through
Secretary Stokes, stated that COM
mittee studying the matter requested
the following plan:
That the supervising architect
write into the specifications of all pro-
posed Federal construction jobs a no
tice requiring that all general con-
tractors when submitting bids shall
include q slist of the Subcontractors
whose figures were used in making up
the general contractors bid and that
these names be read Immediately fol-
lowing the announcement of the price
of the successful bidder" Provision
should also be made, it was added
whereby the supervising architect
could reject the bid of any subcon-
tractor on the list submitted, If proper
proof was submitted showing that the
particular subcontractor was not a re-
liable or financially responsible opera
tor.
Doubts Success Of Regulation
To this suggestion, Mr.. Schuneman
replied that while the department
appreciates the motives that actuate
subcontractors in their endeavor to
secure some regulations which will do
away with the practice of bid shop
ping followed by some general contrac-
to remedy this matter by regulations
would prove unsatisfactory"
Mr.. Schunen1an added that at one
time the Treasury required contractors
to submit for approval the names OF
their principal Subcontractors, not be-
fore but after the award Of the con-
tract, and that at sometimes happened
that these subcontractors proved I'M
satisfactory and there sometimes devel-
oped a disposition on the part of the
general contractor to evade response
bility therefore, because Of the approval
which the department had given such
Subcontractors.
Furthermore, replied Mr.. Schune-
man, delay was occasioned in some in
stances due to the necessity of inveS-
tigating the standing and ability of
Subcontractors. Altogether the ex-
perience of the department led to the
adoption of the principle that the con-
tractor must be held responsible for
the acts of his SubcontractorS. and 1t
seemed unfair to so hold the contrac-
tor and at the the same time limit
his freedom of action In selecting his
SiIbcontractorS,