American Federation of Labor and Congress of Industrial Organizations v. Alfred E. Kahn, Chairman, Council on Wage and Price Stability

618 F.2d 784, 199 U.S. App. D.C. 300

• Court: Court of Appeals for the D.C. Circuit
• Decided: September 14, 1979
• Docket: 79-1564
• Status: Published

Opinions

J. SKELLY WRIGHT, Chief Judge:

This case presents the question whether Congress has authorized the President to deny Government contracts above $5 million to companies that fail or refuse to comply with the voluntary wage and price standards. We answer that question in the affirmative.

After presenting the facts of the case, we examine in Part II the authority granted to the President under the Federal Property and Administrative Services Act of 1949 (FPASA or Procurement Act).¹ In Part III we evaluate the contention of appellees, a group of labor unions, that the procurement compliance program is barred by the Council on Wage and Price Stability Act (COWPSA),² while in Part IV we review the claim that the program thwarts the national labor policy.

I. FACTS

On November 1, 1978 President Carter signed Executive Order 12092 directing the Council on Wage and Price Stability (Council) to establish voluntary wage and price standards for noninflationary behavior for the entire economy.³ For a business, the Order stated that noninflationary price increases would be no more than 0.5 percent less than that company’s recent rate of average price increase; for workers, noninflationary wage increases were defined as no more than a seven percent annual rise. The President ordered the Chairman of the Council to monitor compliance with these standards and to publish the names of noncomplying companies. The Executive Order also instructed the head of each Executive agency and Military Department to require that all contractors certify that they are in compliance with the wage and price standards. The Office of Federal Procurement Policy (OFPP) was charged with implementation of the procurement aspect of the program. The initial wage and price standards announced by the Council on December 21, 1978 largely followed the outline of the President’s November 1 Order,⁴ with the added provision that a company may be excepted from compliance in order to “avoid situations o[f] undue hardship or gross inequity.”⁵

OFPP issued a policy letter on January 4, ■ 1979, requiring that Government contracts worth more than $5 million and signed after February 15 must include certification that the contractor is in compliance with the wage and price standards.⁶ The letter provides that if the Council finds that the standards have not been respected by any such contractor or first-tier subcontractor whose contract exceeds $5 million, the relevant agency head may terminate the contract and the company may be ruled ineligible for future Government business.⁷ The policy letter established three grounds for waiving either termination or a finding of ineligibility: (1) if “the product or service is essential to National security or public safety,” and there are no feasible alternative sources of supply; (2) if Government action would “threaten the contractor’s or subcontractor’s ability to survive”; and (3) if the contractor agrees both to comply with the wage and price standards and to make an “equitable” reduction of the contract price.⁸ The procurement compliance program is expected to reach 65 to 70 percent of all Government procurement dollars, or about $50 billion worth.⁹

On March 31, 1979 plaintiff labor unions challenged the program in District Court as interfering with the exercise of the right to bargain collectively and as beyond the power of the President to initiate. The District Court granted the unions’ motion for summary judgment on the latter ground on May 31,1979, and enjoined the procurement compliance program.¹⁰ That injunction was stayed pending the outcome of this expedited appeal.¹¹

II

We note at the outset our disagreement with the contention that this case presents the same issue decided by the Supreme Court in Youngstown Sheet & Tube Co. v. Sawyer.12 In Youngstown President Truman argued that he could constitutionally seize and operate the steel mills, which had been closed by a labor dispute, under his “inherent powers” to deal with national emergencies and wartime situations. In arguing for the validity of Executive Order 12092, however, the Government relies entirely upon authority said to be delegated by statute, and makes no appeal to constitutional powers of the Executive that have not been confirmed by legislation. Thus, although both cases involve challenges to Executive actions, they raise sharply different legal questions.¹³ Although the separation of powers between Congress and the President was the dominant issue in Youngstown, here we primarily face a difficult problem of statutory interpretation. Appellees’ challenge to the Executive Order is directed at the procurement aspect of the Order, not at the Council’s authority under COWPSA to promulgate voluntary standards.¹⁴ Thus the central issue in this case is whether the FPASA indeed grants to the President the powers he has asserted.

A

The FPASA was a response to the recommendation of the Hoover Commission in 1949 that the Government’s method of doing business be streamlined and modernized.¹⁵ The statute was designed to central-, ize Government property management and to introduce into the public procurement process the same flexibility that characterizes such transactions in the private sector.¹⁶ These goals can be found in the terms “economy” and “efficiency” which appear in the statute and dominate the sparse record of the congressional deliberations.

The most important provision' of the Act for this case, Section 205(a), 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 * * ¹⁷ Because this language is open-ended, it is important to examine its genesis. The initial Hoover Commission study of procurement recommended that a General Services Agency oversee Government acquisitions, and that the Agency be placed within the Executive Office of the President to bolster its authority and to ensure central direction of the bureaucracy.¹⁸ Congress, however, was reluctant to saddle the relatively small Executive Office with such a vast administrative burden, so it set up the General Services Administration as an independent agency.¹⁹ But in response to the Hoover Commission’s concern that the strength of the presidency support the new agency, Congress added Section 205(a) to guarantee that “Presidential policies and directives shall govern — not merely guide — ” the agencies under the FPASA.²⁰ We believe that by emphasizing the leadership role of the President in setting Government-wide procurement policy on matters common to all agencies, Congress intended that the President play a direct and active part in supervising the Government’s management functions.

To define the President’s powers under Section 205(a), some content must be injected into the general phrases “not inconsistent with” the FPASA and “to effectuate the provisions” of the Act. The congressional declaration of policy for the FPASA sets forth the goal of an “economical and efficient system for * * * procurement and supply.”²¹ Section 201 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.”²² This language recognizes that the Government generally must have some flexibility to seek the greatest advantage in various situations. “Economy” and “efficiency” are not narrow terms; they encompass those factors like price, quality, suitability, and availability of goods or services that are involved in all acquisition decisions. Similar concerns can be seen in the specific direction to contracting officers in Section 303(b) that contracts should be awarded to bidders whose terms “will be most advantageous to the Government, price and other factors considered.”²³

Although the terms and legislative record of the FPASA are not unambiguous, the relationship of the Act to this case can be outlined. Section 205(a) grants the President particularly direct and broad-ranging authority over those larger administrative and management issues that involve the Government as a whole. And that direct presidential authority should be used in order to achieve a flexible management system capable of making sophisticated judgments in pursuit of economy and efficiency.²⁴

B

In light of the imprecise definition of presidential authority under the FPASA, it is useful to consider how the procurement power has been exercised under the Act. As the Commission on Government Procurement pointed out in its 1972 report, Congress itself has frequently imposed on the procurement process social and economic programs somewhat removed from a strict view of efficiency and economy.²⁵ More significant for this case, however, several Executive actions taken explicitly or implicitly under Section 205 of the FPASA have also imposed additional considerations on the procurement process.²⁶ Of course, the President’s view of his own authority under a statute is not controlling, but when that view has been acted upon over a substantial period of time without eliciting congressional reversal, it is “entitled to great respect.”²⁷ As the Supreme Court observed this Term, the “construction of a statute by those charged with its execution should be followed unless there are compelling indications that it is wrong.”²⁸

In February 1964 President Johnson directed by Executive Order that federal, contractors not “discriminate [against persons] because of their age except upon the basis of a bona fide occupational qualification, retirement plan, or statutory requirement * * *,”²⁹ In or(ier to ease this nation’s balance of payments problem in 1967, the General Services Administrator issued a regulation requiring that procurement of materials and supplies for use outside the United States be restricted to goods produced in this country, except when the Government has excess foreign currencies available for purchases overseas.³⁰ And through Executive Order 11755 in 1973 President Nixon continued in effect the exclusion from employment on federal contract work of certain state prisoners.³¹

Since 1941, though, the most prominent use of the President’s authority under the FPASA has been a series of anti-discrimination requirements for Government contractors. The early anti-discrimination orders were issued under the President’s war powers and special wartime legislation,³² but for the period from 1953 to 1964 only the FPA-SA could have provided statutory support for the Executive action.³³

The anti-discrimination orders were not tested in the courts until 1964, when the Third Circuit held that they did not grant a private right of action to an employee alleging racial discrimination in work assignment.³⁴ The court concluded that those orders were a proper exercise of presidential authority under Section 205 of the FPASA and the “declaration of policy” in the Defense Production Act of 1950.³⁵ In a 1967 ruling on the private cause of action question, the Fifth Circuit observed that the FPASA supported President Kennedy’s 1961 Order directing affirmative action by contractors to hire minority workers.

We would be hesitant to say that the antidiscrimination provisions of Executive Order No. 10925 are so unrelated to the establishment of “an economical and efficient system for * * * the procurement and supply” of property and services, 40 U.S.C.A. § 471, that the order should be treated as issued without statutory authority. * * * [³⁶]

After pointing out that the parties did not contest the validity of the Order, the court added, “We, therefore, conclude that Executive Order No. 10925 was issued pursuant to statutory authority, and has the force and effect of law.” ³⁷

The only direct court holding on the validity of the anti-discrimination orders was provoked by a challenge to the “Philadelphia Plan,” which required that bidders for federal or federally-assisted construction contracts submit an affirmative action program.³⁸ In Contractors Ass’n of Eastern Pennsylvania v. Secretary of Labor39 the Court of Appeals rejected a claim that the President exceeded his powers in issuing the affirmative action Order. Judge Gibbons, writing for a unanimous panel, offered several alternative holdings. Although the vitality of two of the claimed bases of decision is subject to question,⁴⁰ we note as relevant to the instant case his view that .the Orders were “authorized by the broad grant of procurement authority” under the FPASA.⁴¹ He stated, “[I]t is in the interest of the United States in all procurement to see that its suppliers are not over the long run increasing its costs and delaying its programs by excluding from the labor pool, available minority workmen,” and concluded that “[i]n the area of Government procurement Executive authority to impose non-discrimination con* tract provisions [represents] action pursuant to the express or implied authorization of Congress.” ⁴²

C

This survey of the terms of the FPASA, its legislative history, and Executive practice since its enactment suggests that the District Court misapprehended the President’s statutory powers in this case. Any order based on Section 205(a) must accord with the values of “economy” and “efficiency.” Because there is a sufficiently close nexus between those criteria and the procurement compliance program established by Executive Order 12092, we find that program to be authorized by the FPA-SA.

The District Court was alarmed by the prospect of Government contracts being diverted from low bidders who are not in compliance with the wage and price standards to higher bidders.⁴³ The result, it might seem, could be an unwarranted drain on the public fisc. Yet it is important to consider the procurement compliance program in its real-world setting. Much Government procurement takes place through the processes of negotiation rather than formal advertisement and competitive bidding. Military procurement, which is the largest single component of Government purchasing, is conducted almost exclusively through negotiated arrangements.⁴⁴ In the context of a negotiated contract, the procurement program announced by Executive Order 12092 will likely have the direct and immediate effect of holding down the Government’s procurement costs.

Moreover, to the extent that compliance with the wage and price standards is widespread a corresponding reduction (or more gentle increase) in Government expenses should take place.⁴⁵ There is every reason to anticipate general compliance throughout the economy. Executive officials have cited initial indications that most large companies will comply with the standards,⁴⁶ and the inflation problem is too serious for businessmen and workers not to understand the importance of compliance. In addition, by setting standards for both wages and prices Executive Order 12092 attempts to eliminate the need for either business or labor to seek price and wage increases. Finally, if the voluntary restraint program is effective in slowing inflation in the economy as a whole, the Government will face lower costs in the future than it would have otherwise.⁴⁷ Such a strategy of seeking the greatest advantage to the Government, both short- and long-term, is entirely consistent with the congressional policies behind the FPASA.⁴⁸

We do not deny that under Executive Order 12092 there may be occasional instances where a low bidder will not be awarded a contract. Nevertheless, we find no basis for rejecting the President’s conclusion that any higher costs incurred in those transactions will be more than offset by the advantages gained in negotiated contracts and in those cases where the lowest bidder is in compliance with the voluntary standards and his bid is lower than it would have been in the absence of standards.⁴⁹ Consequently, we conclude that Executive Order 12092 is in accord with the “economy and efficiency” touchstone of the FPASA. By acting to restrain procurement costs across the entire Government, the President was within his Section 205(a) powers.

We wish to emphasize the importance to our ruling today of the nexus between the wage and price standards and likely savings to the Government. As is clear from the terms and history of the statute and from experience with its implementation, our decision today does not write a blank check for the President to fill in at his will.⁵⁰ The procurement power must be exercised consistently with the structure and purposes of the statute that delegates that power.⁵¹

III

The District Court concluded that the compliance program involved here was mandatory. As a result, that court found the program barred by this statement in Section 3(b) of COWPSA:

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[.] [⁵²]

We disagree with the District Court’s conclusion. Although every denial of a benefit may be viewed in some sense as a sanction, we do not find in the procurement compliance program those elements of coercion and enforceable legal duty that are commonly understood to be part of any legally mandatory requirement.⁵³ The situation in this case seems analogous to those federal programs that offer funds to state and local governments on certain conditions. The Supreme Court has upheld such conditional grants, observing on one occasion through Justice Cardozo that “to hold that motive or temptation is equivalent to coercion is to plunge the law in endless difficulties.”⁵⁴

Further, any alleged mandatory character of the procurement program is belied by the principle that no one has a right to a Government contract. As the Supreme Court ruled in Perkins v. Lukens Steel Co., “[T]he Government enjoys the unrestricted power * * * to determine those with whom it will deal, and to fix the terms and conditions upon which it will make needed purchases.”⁵⁵ ■ Those wishing to do business with the Government must meet the Government’s terms; others need not.

The question presented by this case, however, is not whether in some abstract sense President Carter’s program is mandatory or voluntary, but whether it is barred by Section 3(b) of COWPSA. In our view, that provision refers to the sort of mandatory economic controls imposed, during World War II, the Korean War, and the early 1970s. The statute covers “prices, rents, wages, salaries, • [and] corporate dividends,” ⁵⁶ a likely reference to a similar list in Section 203(a) of the Economic Stabilization Act Amendments of 1971 which established legally enforceable wage and price controls.⁵⁷ Because COWPSA was enacted just a few months after the Economic Stabilization Act expired, it is reasonable to conclude that the language of Section 3(b) looks back to the provisions of the earlier Act. In addition, the standards in Executive Order 12092, which cover only wages and prices, are not as extensive as the list in Section 3(b). Consequently, we do not think the procurement compliance program falls within the coverage of Section 3(b), but rather is a halfway measure outside the contemplation of Congress in that enactment. This interpretation is reinforced by the fact that Executive Order 12092, unlike the earlier wage and price programs, makes no provision for civil or criminal penalties or injunctions.

Perhaps more, important, Section 3(b) is irrelevant to the President’s procurement compliance program. The statutory provision states that “[njothing in this Act * * authorizes * * * mandatory economic controls” (emphasis added). Executive Order 12092 relies on COWPSA for the Council’s power to establish the voluntary wage and price standards, but the Order rests on the FPASA for implementation of the procurement compliance program. Since we think the procurement feature of the President’s Order is supported by FPASA, it is of no concern that Section 3(b) may not also grant him that authority.⁵⁸

Finally, it is important to point out that just two months ago the Congress approved a one-year extension of COWPSA, a tripling of its budget, and a sixfold increase in its staff.⁵⁹ The legislative history of this 1979 extension of COWPSA, which was approved while this suit was pending in the District Court, contains several assertions that Congress did not intend to make any statement on the issues raised in this case.⁶⁰ Yet it strains credulity to maintain that COWPSA bars the procurement compliance program when Congress has just extended that statute knowing that the Council it established is charged with implementing the wage and price guidelines on which the procurement program is based.⁶¹ Congress can reverse incorrect Executive interpretations of its statutes and has used that power in the past.⁶² Congress, fully aware of the procurement program, renewed COWPSA without significant modification. In this context, a court could only in the most extreme case find that the Executive has violated the statute.

IV

Appellees also argue that Executive Order 12092 contravenes the policy of free collective bargaining embodied in the National Labor Relations and Railway Labor Acts. Although the Executive Order represents an important external factor in the economic environment surrounding collective bargaining, it does not subvert the integrity of that process.⁶³ Accordingly, we find this contention to be without merit.

V

The people of this country are experiencing a cruel period of economic inflation. In an effort to relieve the distress caused by that inflation, Congress has authorized the President to issue wage and price standards and to encourage voluntary compliance as an act of good citizenship.⁶⁴ The President has pursued this goal through his statutory authority over Government procurement. Given this cooperative effort by the legislative and executive branches of our government, it would be ironic indeed for the third branch to ignore the legal basis for the program challenged here and hold that the President may not deny Government contracts above $5 million to those who flout the voluntary standards.

Consequently, the order of the District Court is reversed and its injunction is vacated.⁶⁵

So ordered.

1 . 40 U.S.C. § 486(a) (1976).

2 . Pub.L.No. 93-387, 88 Stat. 750 (1974), 12 U.S.C. § 1904 note (1976), as amended, [1979] U.S.Code Cong. & Admin.News-.

3 . 43 Fed.Reg. 51375 (1978), reprinted in IV Legislative Appendix (Legis.App.) at 29.

4 . 43 Fed.Reg. 60772 (1978) (to be codified in 6 C.F.R. § 705), IV-A Legis.App. at 7. Among the exceptions to the general standards program are an optional modified price standard for the wholesale and retail trade industry and the food manufacturing and processing industries, id. at 60775, IV-A Legis.App. at 10, and a profit margin limitation standard for companies that have uncontrollable costs or that cannot calculate their average price change. Id. at 60774, IV-A Legis.App. at 9.

Special rules cover health benefits and pension plans under the wage standard. If the cost of maintaining existing health benefits increases by less than 7%, more than a 7% increase may be granted in the other wage components. Id. at 60781 (Interpretive Questions and Answers), IV-A Legis.App. at 16. If a pension plan is not amended during the effectiveness of Executive Order 12092 and the ben- , efit structure remains unchanged, the pension funding costs are excludable from all wage calculations. Id.

5 . Id. at 60775, IV-A Legis.App. at 10. See also id. at 60774, IV-A Legis.App. at 9.

6 . 44 Fed.Reg. 1229-1230 (1979), IV-A Legis. App. at 19-20.

7 . Id. at 1230, IV-A Legis.App. at 20. The letter also stated that as the Government gained experience with the compliance program, contracts worth less than $5 million might be Included. Id.

8 . Id. at 1231, IV-A Legis.App. at 21.

9 . Affidavit of Charles L. Schultze (Chairman of Council of Economic Advisers) at 3, II Appendix (App.) at 438, 440; Affidavit of James D. Currie (Acting Head of OFPP), at 3; III App. at 647, 649.

10 . AFL-CIO v. Kahn, 472 F.Supp. 88, (D.D.C. 1979). The District Court’s opinion in this case was flawed in several material respects: (1) it concluded that the situation here parallels that in Youngstown Sheet & Tube Co. v. Sawyer, 343 U.S. 579, 72 S.Ct. 863, 96 L.Ed. 1153 (1952), see p. 787 & n.13 infra; (2) it found, without actually examining congressional materials, that the legislative history of the FPA-SA demonstrated that Congress intended in that Act to prohibit the use of the procurement power to affect general price levels, see pp. 787-789 & n.24 infra; (3) it neglected the historical uses of the President’s powers under the FPASA, see pp. 789 — 792 infra; (4) it offered an unlikely interpretation of a key Court of Appeals decision on Executive power under the FPASA, see pp. 791-792 & n.40 infra; (5) it misunderstood the likely impact of Executive Order 12092 on Government procurement costs, see pp. 792-793 infra; and (6) it incorrectly viewed this program as “mandatory” within the meaning of COWPSA, see p. 794 infra.

11 . Twenty-four senators and members of Congress have filed a brief amicus curiae generally in support of appellees.

12 . Supra note 10.

13 . The contrast between the cases is highlighted by the three-part analysis of Executive powers put forth by Justice Jackson in Youngstown :

1. When the President acts pursuant to an express or implied authorization of Congress, his authority is at its maximum * * *. * * *

2. When the President acts in absence of either a congressional grant or denial of authority, he can only rely upon his own independent powers ******

3. When the President takes measures incompatible with the expressed or implied will of Congress, his power is at its lowest ebb * * * * * *

343 U.S. at 635-637, 72 S.Ct. at 870-871. The Supreme Court in Youngstown held that the seizure of the steel mills might fall in Justice Jackson’s second category, but most likely belonged in the third. See id. at 602-605, 72 S.Ct. 863 (Frankfurter, J., concurring). But the Government here claims to be within the first category, where the President’s power is greatest.

On the constitutional issue of legislative delegation in this case, see note 51 infra.

14 . See AFL-CIO v. Kahn, supra note 10, 472 F.Supp. at 94.

15 . The Concluding Report of the Hoover Commission espoused the goal of a “government which will act with dispatch, with greater internal coordination and harmony, with consistency of administrative policy, and economy of operation.” Concluding Report to the Congress by the Commission on Organization of. the Executive Branch of Government at 3 (May 1949).

16 . H.R.Rep.No.670, 81st Cong., 1st Sess. 2-5 (1949), I-A Legis.App. at 28-32. The Senate Report refers to the need for an “efficient, business-like system of property management.” S.Rep.No.475, 81st Cong., 1st Sess. 1 (1949), I-A Legis.App. at 88. See 95 Cong.Rec. 7438, I-A Legis.App. at 131 (remarks of Rep. Brown) (nation needs “sound, businesslike” procurement system); id. at 7441, I-A Legis.App. at 134 (remarks of Rep. Holifield). See also The Organization and Management of Federal Supply Activities, A Report to the Congress by the Commission on Organization of the Executive Branch of Government at 25-27, 35-37 (Feb. 1949).

17 . Federal Property and Administrative Services Act of 1949 (FPASA), ch. 288, § 205(a), 63 Stat. 389, codified at 40 U.S.C. § 486(a) (1976) (emphasis added).

18 . See Office of General Services, A Report to the Congress by the Commission on Organization of the Executive Branch of the Government at 1 (Feb. 1949).

19 . Representative Holifield, the House sponsor of FPASA, pointed out in floor debate that the proposed General Services Administration (GSA) would have about 35,000 employees, while the President’s personal staff numbered just over 1,000. To place GSA within the Executive Office, Holifield argued, would be “ridiculous” and “an unworkable extreme.” 95 Cong. Rec. 7441 (1949), I-A Legis.App. at 134.

20 . Id. (remarks of Rep. Holifield) (emphasis added). See S.Rep.No.475, supra note 16, at 3, I-A Legis.App. at 90. In the words of Representative Bolling:

In drafting this legislation the President was given the power to prescribe policies and directives which he may deem necessary to carry out the provisions thereunder. These policies and directives must govern the action of the Administrator and the executive agencies. This accomplishes for all intents and purposes the same objective that could be obtained by placing the General Services Administration in the Office of the President.

95 Cong.Rec. 7452 (1949), I-A Legis.App. at 145.

21 . FPASA of 1949, ch. 288, § 2, 63 Stat. 378, codified at 40 U.S.C. § 471 (1976).

22 . Id. § 201(a), codified at 40 U.S.C. § 481(a) (1976) (emphasis added). The words “economy” and “efficiency” echo through the legislative history. See, e. g., H.R.Rep.No.670, supra note 16, at 2, 7, I-A Legis.App. at 29, 34; S.Rep.No.475, supra note 16, at 6, 8, I-A Legis. App. at 93, 95.

23 . 41 U.S.C. § 253(b) (1976). The Armed Services Procurement Act of 1947, whose “principles" were to be applied under FPASA, see H.R.Rep.No.670, supra note 16, at 6, I-A Legis. App. at 33; S.Rep.No.475, supra note 16, at 5, I-A Legis.App. at 92, was also designed to encourage procurement officers to consider ■ “need, quality of product, or lower ultimate cost” as well as price. S.Rep.No.571, 80th Cong., 1st Sess. 2 (1947), I Legis.App. at 42.

24 . The District Court relied on a report by the General Accounting Office (GAO) for the conclusion that in enacting FPASA Congress specifically did not intend to authorize the President to use the procurement system to regulate prices. AFL-CIO v. Kahn, supra note 10, 472 F.Supp. at 94. See GAO, Authority for President’s Program Applying Mandatory Wage and Price Standards to Government Procurement (Executive Order 12092) at 14-18 (Feb. 5, 1979), Supplemental Legis.App. at 80-84. The GAO Report, however, is extremely unreliable . on this point. The Report spotlights Representative Holifield’s endorsement of granting authority to the proposed GSA to contract with regulated transportation common carriers. 95 Cong.Rec. 8277-8278 (1949), I-A Legis.App. at 176-177. Such authority, Holifield said, would not disrupt the regulation of such carriers by the Interstate Commerce Commission (ICC). There is certainly no basis in those remarks for GAO’s conclusion that Congress intended to bar the use of procurement to influence general price levels in the economy. See GAO Report, supra, at 17, Supp.Legis.App. at 83. Rather, Representative Holifield was addressing one discrete issue — GSA jurisdiction over the purchase of transportation services — and he simply stated the obvious point that such a function would not intrude on the ICC’s regulatory role. The GAO Report also pointed to 40 U.S.C. § 474 (1976), which states that nothing in the FPASA shall “impair or affect” programs of, inter alia, “price support” or “stabilization.” GAO Report, supra, at 18, Supp.Legis.App. at 84. This provision would appear to refer to the farm commodity support programs of the federal government, without any direct relevance for procurement policy generally. Even if it refers to general price control measures, it hardly supports GAO’s view. The “no impairment” provision has meant substantial freedom from GSA regulations for affected programs. 1 Report of Commission on Government Procurement 17 (1972). Thus the statute prescribes only that procurement shall not obstruct stabilization programs, not that procurement policy cannot support such programs.

25 . For example, the FPASA itself included a directive that a fair portion of Government purchases and contracts be placed with small businesses. Act of June 30, 1949, ch. 288, Title II, § 302, 63 Stat. 393, currently codified at 41 U.S.C. § 252(b) (1976). Other prominent examples enacted since 1949 include directives that Government service contractors meet minimum standards for wages and working conditions, Service Contract Act of 1965, § 2, 41 U.S.C. § 351 (1976), and that the Government not contract with any company that has been found in criminal violation of air pollution standards, Clean Air Amendments of 1970, § 12(a), 42 U.S.C. § 7606 (Supp. I 1977). See 1 Report of the Commission on Government Procurement 114-115 (1972).

26 . See Northeast Construction Co. v. Romney, 157 U.S.App.D.C. 381, 389-390, 485 F.2d 752, 760-761 (1973).

27 . Board of Governors of the Federal Reserve System v. First Lincolnwood Corp., 439 U.S. 234, 248, 99 S.Ct. 505, 513, 58 L.Ed.2d 484 (1978). See Red Lion Broadcasting Co. v. FCC, 395 U.S. 367, 381, 89 S.Ct. 1794, 23 L.Ed.2d 371 (1969).

28 . Miller v. Youakim, 440 U.S. 125, 144 n.25, 99 S.Ct. 957, 59 L.Ed.2d 194 (1979) (quoting Red Lion Broadcasting Co. v. FCC, supra note 27, 395 U.S. at 381, 89 S.Ct. 1794 (footnote omitted)).

29 . Executive Order 11141, 3 C.F.R. 179 (1964-65 Compilation), reprinted in 5 U.S.C. § 3301 note (1976). Although the Order can now be justified under the Age Discrimination in Employment Act of 1967, 29 U.S.C. §§ 621-634 (1976), and the Age Discrimination Act of 1975, 42 U.S.C. §§ 6101-6107 (1976), for the first three years of its operation this Order was apparently based on only the FPASA. The Executive Order itself simply cites “the authority vested in [the President] by the Constitution and statutes of the United States.”

30 . See 32 Fed.Reg. 5622 (1967), see 41 C.F.R. § 1-6.8 (1978). This regulation specifically invokes only the 1949 Act as authority (citing 40 U.S.C. § 486(c), see 32 Fed.Reg. 5622 (1967). (The Buy American Act, 41 U.S.C. §§ 10a-10d (1976), could not justify the Order since it expressly does not apply to use of goods, outside the United States. Id. § 10a.)

31 . President Nixon’s Order derived from Executive Order 325A issued by President Theodore Roosevelt in 1905, which forbade employment of all state prisoners on federal contract work. Roosevelt’s Order, in turn, was inspired by the Act of February 23, 1887 (codified at 18 U.S.C. § 436 (1976)), which banned employment of federal prisoners by federal contractors. By Act of September 10, 1965, codified at 18 U.S.C. § 4082(c)(2) (1976), the restriction against employment of federal prisoners was somewhat relaxed, so President Nixon’s Executive Order 11755, 3 C.F.R. 837 (1971-75 Compilation) (1973), made a corresponding change in the way state prisoners would be treated, see 41 C.F.R. § 1-12.2 (1978). The only authority claimed for the Nixon Order and the regulations thereunder is the FPASA (specifically, 40 U.S.C. § 486(c) (1976), see 39 Fed.Reg. 24009 (1974)). See also Executive Order 11598, 3 C.F.R. 565 (1971-75 Compilation) (1971) (requiring that Government contractors list “suitable employment openings with the appropriate office of the State employment service sys-' tern” in order to encourage employment of returning veterans; claiming only authority of President of the United States).

32 . President Franklin Roosevelt issued three Executive Orders dealing with fair employment practices. See Executive Order 8802, 3 CIF.R. 957 (1938-43 Compilation) (1941) (citing no specific statutory authority); Executive Order 9001, 3 C.F.R. 1054 (1938-43 Compilation) (1941) (citing Act of Dec. 18, 1941, Pub.L.No. 77-354, ch. 593, 55 Stat. 838); Executive Order 9346, 3 C.F.R. 1280 (1938-43 Compilation) (1943) (apparently premised on President’s war powers). President Truman also signed three Executive Orders concerning fair employment practices which continued the policies embodied in President Roosevelt’s Orders. See Executive Order 9664, 3 C.F.R. 480 (1943^8 Compilation) (1945) (citing no specific statutory authority); Executive Order 10210, 3 C.F.R. 390 (1949-53 Compilation) (1951) (citing Act of Jan. 12, 1951, Pub.L.No. 81-921, ch. 1230, 64 Stat. 1257); Executive Order 10308, 3 C.F.R. 837 (1949-53 Compilation) (1951) (citing Defense Production Act of 1950, Pub.L.No. 81-774, ch. 932, 64 Stat. 798, now codified at 50 U.S.C. App. §§ 2061-2169 (1976)).

33 . Two Eisenhower Executive Orders and one Kennedy Executive Order substantially continued the anti-discrimination policy, Executive Order 10479, 3 C.F.R. 961 (1949-53 Compilation) (1953); Executive Order 10557, 3 C.F.R. 203 (1954-58 Compilation) (1954); Executive Order 10925, 3 C.F.R. 448 (1959-63 Compilation) (1961), but none of them referred to substantive statutes. President Kennedy extended the anti-discrimination policy to construction contracts, see Executive Order 11114, 3 C.F.R. 774 (1959-63 Compilation) (1963), and in 1965 President Johnson transferred enforcement of the policy to the Secretary of Labor, see Executive Order 11246, 3 C.F.R. 339 (1964-65 Compilation) (1965). In the early 1970s Congress indicated its approval of the anti-discrimination orders. See AFL-CIO v. Kahn, supra note 10, 472 F.Supp. at 97.

34 . Farmer v. Philadelphia Electric Co., 329 F.2d 3 (3d Cir. 1964).

35 . Id. at 8.

36 . Farkas v. Texas Instrument, Inc., 375 F.2d 629, 632 n.1 (5th Cir.), cert. denied, 389 U.S. 977, 88 S.Ct. 480, 19 L.Ed.2d 471 (1967).

37 . Id.

38 . The Philadelphia Plan regulations, issued by the Secretary of Labor in 1969 for certain projects in a five-county area around Philadelphia, required that contractors set specific goals for utilization of minority manpower in certain crafts. The regulations were based on Executive Order 11246, supra note 33.

39 . 442 F.2d 159, 170 (3d Cir.), cert. denied, 404 U.S. 854, 92 S.Ct. 98, 30 L.Ed.2d 95 (1971).

40 . Judge Gibbons suggested that, even if the FPASA did not apply, the President acted within his “implied authority,” and that the Orders were impliedly ratified when Congress approved appropriations for construction projects covered by the Philadelphia Plan. Id. at 171. Unlike the District Court in this case, we find that these portions of Judge Gibbons’ opinion are not only of little relevance to the instant case, but also of doubtful force. The Supreme Court has recently criticized the interpretation of appropriations measures as implied approvals of substantive administrative action, see TVA v. Hill, 437 U.S. 153, 190, 98 S.Ct. 2279, 57 (1978), and much uncertainty attends any claim of “implied” or “inherent” presidential authority under the Constitution.

41 . 442 F.2d at 170.

42 . Id.; see id. at 171 (anti-discrimination orders not based on “notions of desirable social legislation,” but instead involved “the one area in which discrimination in employment was most likely to affect the cost and the progress of [federal] projects * * *.”).

43 . AFL-CIO v. Kahn, supra note 10, 472 F.Supp. at 95.

44 . Bureau of the Census, Statistical Abstract of the United States 1978 at 376 (in 1977, 91.5% of all military procurement, or $41.7 billion worth, was accomplished by negotiated contract rather than through advertising and competitive bidding). Although figures are not available on the portion of norimilitary procurement taking place through negotiated contracts, the practice is widespread in that area as well.

45 . See Currie Affidavit, supra note 9, III App. at 650:

Firms that meet the President’s price and pay standards will be reducing their overall rate of increase in costs and prices. By directing procurement toward such firms an incentive will be provided to large numbers of Government suppliers to meet the standards. To the extent that this occurs, the inflationary element in overall Government procurement costs will be lessened, and the cost of procurement reduced.

46 . See Adequacy of the Administration's Anti-Inflation Program (Part I), Hearings Before a Subcommittee of the House Committee on Government Operations, 96th Cong., 1st Sess. 293-294 (1979) (testimony of A. Kahn, Chairman, Council on Wage and Price Stability) (hereinafter cited as 1979 Hearings).

⁴⁷

[Olbservance of the [wage and price] standard^] by large numbers of individual firms who supply the Government will put competitive pressure on other suppliers to do the same, tending to spread the cost-reducing consequences more broadly across the spectrum of procurement.

48 . See text at and note 23 supra.

49 . “Given that some remedial measure was authorized, the question remaining is whether the measure chosen is reasonably related to its objectives.” Mourning v. Family Publications Service, Inc., 411 U.S. 356, 371, 93 S.Ct. 1652, 1661, 36 L.Ed.2d 318 (1973).

50 . Amicus argues that a decision upholding Executive Order 12092 would give the President power, for example, to establish by Executive Order the sort of program proposed in the National Labor Reform Act of 1977, which was not enacted, that “willful” violators of the National Labor Relations Act should be suspended from seeking Government contracts for three years. See H.R. 8410, § 8(3), 95th Cong., 1st Sess. (1977), printed in Labor Reform Act of 1977 Part I, Hearings Before the Subcommittee on Labor-Management Relations of the House Committee on Education and Labor, 95th Cong., 1st Sess. 13 (1977). The approach we take today might raise serious questions about the validity of such an Order, but we need not reach that issue here.

51 . Amicus argues that if the FPASA gives the President authority to adopt the procurement compliance program, the Act must run afoul of the constitutional prohibition against excessive delegation of legislative power to the President. As articulated by the Supreme Court, the delegation doctrine requires that legislation provide some standards, albeit not necessarily precise or specific ones, by which administrative actions may be judged. See 1 K. Davis, Administrative Law Treatise 149-223 (2d ed. 1978).

The FPASA requires the President to make procurement policy decisions based on considerations of economy and efficiency. Although broad, this standard can be applied generally to the President’s actions to determine whether those actions are within the legislative delegation. At a more particular level, administrative standards exist to test the President’s actions. Executive Order 12092 specifies percentage increases as standards for judging compliance with the program. Where noncompliance is found, moreover, exceptions to the policy can be granted on the basis of “undue hardship or gross inequity,” or if a corporation’s survival is at stake. See pp. 785-786 supra. These are factual determinations not unlike those reviewed by courts every day. The standards for this program compare favorably with those found sufficient for purposes of judicial review of administrative action in Amalgamated Meat Cutters & Butcher Workmen v. Connally, 337 F.Supp. 737, 744-763 (D.D.C.1971) (three-judge court). That the procurement compliance program involves governmental contracting practices would’not immunize actions under it from court challenge as arbitrary and capricious or contrary to law. See M. Steinthal & Co. v. Seamans, 147 U.S.App.D.C. 221, 230-231, 455 F.2d 1289, 1298-1299 (1971); Scanwell Laboratories, Inc. v. Shaffer, 137 U.S.App.D.C. 371, 386, 424 F.2d 859, 874 (1970); Gonzalez v. Freeman, 118 U.S.App.D.C. 180, 185-186, 334 F.2d 570, 575-576 (1964).

52 . 12 U.S.C. § 1904 note (1976). See AFL-CIO v. Kahn, supra note 10, 472 F.Supp. at 99-101.

53 . Mandatory has been defined as “[cjontaining a command; preceptive; imperative; peremptory.” Black’s Law Dictionary 1114 (rev. 4th ed. 1968). Cf. Adams v. Tackett, 236 Ark. 171, 365 S.W.2d 125 (1963); State v. Barnell, 109 Ohio St. 246, 142 N.E. 611 (1924); Muskego-Norway Consolidated Schools Joint School District No. 9 v. Wisconsin Employment Relations Board, 32 Wis.2d 478, 145 N.W.2d 680 (1966).

54 . Steward Machine Co. v. Davis, 301 U.S. 548, 589-590, 57 S.Ct. 883, 892, 81 L.Ed. 1279 (1937). In Steward the Court upheld as non-coercive a federal statute conditioning tax credits for private employers upon enactment by the state of a federally-approved unemployment compensation law. See Oklahoma v. United States Civil Service Comm’n, 330 U.S. 127, 67 S.Ct. 544, 91 L.Ed. 794 (1947); City of New York v. Richardson, 473 F.2d 923 (2d Cir.), cert. denied, 412 U.S. 950, 93 S.Ct. 3012, 37 L.Ed.2d 1002 (1973); State of North Carolina ex rel. Morrow v. Califano, 445 F.Supp. 532 (E.D.N.C.1977) (three-judge court), aff'd, 435 U.S. 962, 98 S.Ct. 1597, 56 L.Ed.2d 54 (1978); Dupler v. City of Portland, 421 F.Supp. 1314 (D.Me.1976).

55 . 310 U.S. 113, 127, 60 S.Ct. 869, 876, 84 L.Ed. 1108 (1940). Although the holding in Perkins that contractors lack standing to challenge arbitrary contracting decisions has withered, see Scanwell Laboratories, Inc. v. Shaffer, supra note 51, nothing has undercut the Perkins Court’s view of the Government’s contracting power. United States Brewers Ass’n, Inc. v. EPA, 600 F.2d 974, 984 (D.C.Cir.1979). See United States v. New Orleans Public Service, Inc., 553 F.2d 459, 469 (5th Cir. 1977), vacated on other grounds, 436 U.S. 942, 98 S.Ct. 2841, 56 L.Ed.2d 783 (1978); Southern Illinois Builders Ass’n v. Ogilvie, 327 F.Supp. 1154, 1161 (S.D.Ill.1971), aff'd, 471 F.2d 680 (7th Cir. 1972).

56 . Pub.L.No. 93-387, § 3(b), 88 Stat. 751 (1974), III Legis.App. at 2, codified at 12 U.S.C. § 1904 note (1976).

57 . Pub.L.No. 92-210, § 203, 85 Stat. 744 (1971), II Legis.App. at 8. Under the Economic Stabilization Act Amendments, economic controls could be enforced by criminal penalty, civil fine, injunction, or private treble damage action.

58 . We are also not persuaded that the President’s program is barred by the Moore Amendment of 1946 to the Second War Powers Act, Act of June 29, 1946, ch. 526, § 2, 60 Stat. 346, 50 U.S.C.App. § 645b (1976), as suggested by appellees. The amendment states:

Nothing contained in this Act [the Second War Powers Act] or any other federal Act * * * shall be construed to authorize the establishment by any officer or agency of the Government of maximum prices for any commodity or maximum rents for any housing accommodations.

The statute prohibits only the “establishment * * * of maximum prices for any commodity.” President Carter has not established any maximum prices, but has only restricted Government contracting to those firms in compliance with voluntary standards. In addition, because the language of the Amendment refers directly to language used in legislation establishing wage and price controls during World War II, see, e.g., Emergency Price Control Act of 1942, §§ 2, 205, Pub.L.No. 77-421, 56 Stat. 24-27, 33-35; Act of Oct. 2, 1942, Pub.L.No. 77-729, 56 Stat. 765, 766, we think the Moore Amendment bans only that sort of mandatory control. Finally, the legislative history of this section suggests that Congress intended the phrase “any other federal Act” to refer to then-existing acts, not laws subsequently enacted. See 92 Cong.Rec. 7872 (June 28, 1946) (statement of Senator Joseph O’Mahoney, Manager of the Senate bill) (“[t]he purpose of the amendment was to make certain that none of the war powers should be used for the purpose of carrying into effect any of the powers granted by the Price Control Act [and] the Stabilization Act”) (emphasis added).

59 . See 125 Cong.Rec. H1545-H1546 (daily ed. March 21, 1979); id. at S3769 (daily ed. April 2, 1979); id. at H2324-H2325 (daily ed. April 25, 1979); id. at S4759 (daily ed. April 26, 1979), III—C Legis.App. at 92-93, 143, 145. The terms of the 1979 extension are set out in H.R.Rep.No. 96-33, 96th Cong., 1st Sess. 12-13 (1979), and the Conference Report, H.R. Rep.No. 96-93, 96th Cong., 1st Sess. 1-2 (1979).

In September 1978, before the President’s program was announced, the Senate approved a “Sense of the Senate” resolution stating that neither the FPASA nor any other statute empowered the President to impose mandatory economic controls. 124 Cong.Rec. S16781 (daily ed. Sept. 30, 1978). The resolution, however, has no force of law, predates the President’s program, and, most important, is not applicable to the nonmandatory program that we review today.

60 . See, e.g., H.R.Rep.No. 96-33, supra note 59, at 3, III—C Legis.App. at 8 (committee “did not seek to resolve” controversy “on the issue of whether the Executive * * * has exceeded the authority granted by Congress”); 125 Cong.Rec. H2322 (daily ed. April 25, 1979), III — C Legis.App. at 95 (remarks of Rep. Moorhead).

61 . In fact, the final version of the 1979 extension acknowledges that the Council will be “determin[ing] compliance with promulgated standards.” See H.R.Rep.No. 96-93, supra note 59, at 1, III—C Legis.App. at 1. Other factors indicate that Congress well understood the Council’s role in the procurement compliance program. Administration officials made no secret of the fact that some of the additional funding for the Council would go to the contract compliance aspect of the Council’s mission. See 1979 Hearings, supra note 46, at 291-294 (testimony of A. Kahn, Chairman, Council on Wage and Price Stability). And in an exchange with Senator Heinz in floor debate Senator Proxmire, a sponsor of the measure, assured his colleague that if the courts found that the procurement compliance program was illegal, Congress could “reduce the personnel assigned to the agency.” 125 Cong.Rec. S3745 (daily ed. April 2, 1979), III—C Legis.App. at 119. In view of these indications, and the pervasive public attention directed to the procurement program in recent months, we have no concern that Congress as a whole was not aware of the intimate relationship between the 1979 extension and the procurement program. See SEC v. Sloan, 436 U.S. 103, 120-122, 98 S.Ct. 1702, 56 L.Ed.2d 148 (1978).

62 . For example, the Motor Vehicle and School-bus Safety Amendments of 1974 reversed the requirement of the Secretary of Transportation that automobile ignitions not function until passengers put on their seatbelts. . Pub.L.No. 93-492, § 109, 88 Stat. 1482 (codified at 15 U.S.C. § 1410b (1976)).

63 . Contractors Ass'n of Eastern Pennsylvania v. Secretary of Labor, supra note 39, 442 F.2d at 174-175. See Amalgamated Meat Cutters & Butcher Workmen v. Connally, supra note 51, 337 F.Supp. at 763-764.

64 . See note 61 supra.

65 . We note our disagreement with the view taken by Judge MacKinnon in his lengthy dissent as to the role of Congress with respect to this case. We do not think it without any significance at all that the FPASA has not been revised in reaction to Executive Orders by Presidents Eisenhower, Kennedy, Johnson, and Nixon that explicitly or implicitly relied on the statute, and which deployed the procurement power in pursuit of ends that might not strictly be defined as economy or efficiency. See Part II-B supra; MacKinnon dissent at 870.