Bonds of Contractors on Public Works

dence of the contents, execution, and delivery of the original, and, in case final settlement of such contract has been made, a certified statement of the date of such settlement, which shall be conclusive as to such date. Applicants shall pay for such certified copies and certified statements such fees as the Comptroller General fixes to cover the cost of preparation thereof.

SEC. 4. The first proviso of section 1126 of the Revenue Act of 1926, as amended, is amended by inserting after the phrase "therein provided", the following: or in case any person files suit on a payment bond as provided in the Public Contractor Bonding Act and notifies the Comptroller General of such action,".

SEC. 5. As used in this Act the term person means any individual, association, partnership, or corporation.

SEC. 6. This Act may be cited as the "Public Contractor Bonding Act." SEC. 7. This Act shall take effect upon the expiration of after the date of its enactment, but shall not apply to any contract awarded pursuant to any invitation for bids issued on or before the date it takes effect, or to any persons or bonds in respect of any such contract. The Act entitled "An Act for the protection of persons furnishing materials and labor for the construction of public works", approved August 13, 1894, as amended (U. S. C., title 40, sec. 270), is repealed, except that such Act shall remain in force with respect to contracts for which invitations for bids have been issued on or before the date this Act takes effect, and to persons or bonds in respect of such contracts.

[H. R. 6115, 74th Cong., 1st sess.]

A BILL To amend an Act approved August 13, 1894, entitled "An Act for the protection of persons furnishing materials and labor for the construction of public works

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That the Act entitled "An Act for the protection of persons furnishing materials and labor for the construction of public works", approved August 13, 1894, is hereby amended so as to read as follows: "That hereafter any person or persons entering into a formal contract with the United States for the construction of any public work, or for repairs upon any public building or public work, shall be required before commencing such work to execute the usual penal bond to the United States, with good and sufficient sureties, and that in addition thereto he shall be required to furnish good and sufficient bond in such sum as the United States shall designate, not to exceed, however, the estimated cost of such work or improvement, nor less than 50 per centum of the estimated cost, which said bond shall be made to inure to the benefit of any and all mechanics, materialmen, subcontractors, artisans, machinists, builders, teamsters, draymen, and all persons and laborers of every class performing labor upon or bestowing skill or other necessary services or furnishing materials, provisions, provender, or other supplies to be used or consumed in or furnishing appliances, teams, or power contributing to the performance of such public work or improvement, and shall provide that if the contractor, company, or corporation to whom said contract was awarded fails to pay for any materials furnished for said work or improvement, or for any work or labor done thereon, or for such skill, services, appliances, teams, power, provisions, provender, or other supplies, that the sureties will pay the same to an amount not exceeding the penal sum of said bond; and any person, company, or corporation who has furnished labor or materials, or such skill, services, appliances, teams, power, provisions, provender, or other supplies used in the construction or repair of any public buildings or public work and payment for which has not been made shall have the right to prosecute in his own name, an action on said bond, which said action shall be instituted in the District Court of the United States in the district in which said contract was to be performed and executed, irrespective of the amount in controversy, and not elsewhere: Provided, That the person or persons supplying the contractor with labor or materials, or such skill, services, appliances, teams, power, provisions, provender, or other supplies, shall, prior to the commencement of said action, furnish an affidavit to the department under the direction of which said work has been prosecuted that labor or materials, or such skill, services, appliances, teams, power, provisions, provender, or other supplies, for the prosecution of said work, has been supplied by him or them and payment for which has not been made, and shall thereupon be furnished with a certified copy of said contract and bond upon which he or they have a direct right to action: Provided further, That

where suit is instituted by any of such creditors on such bond, it shall not be commenced until ninety days after the complete performance of the contract under which said creditor furnished such labor and material and under which he claims payment has not been made, and in no event shall such action be commenced more than one year after the completion of the said work and/or improvement as a whole: And provided, however, That in the event performance by the original contractor of such contract for the construction of public work be abandoned by such original contractor or such original contractor shall cease work thereon for any cause or be removed therefrom by the United States, or any agency thereof, and work under such contract shall thereupon cease for a period of six months, then such cessation from labor upon said original contract shall, at the end of said six months' period, be the equivalent of complete performance of said contract for the purpose only of the preceding provision, and action upon said labor and material bond may be instituted by any such creditor in such event at any time after ninety days after the constructive completion of such contract resulting from such cessation from labor thereon for said six months' period, and in the event of such constructive completion arising in the manner aforesaid, then in no event shall such action be commenced upon said labor and material bond more than one year after the constructive completion of such contract as aforesaid: And provided further, That if suit is so instituted by a creditor or creditors only one action shall be brought and any creditor may intervene in such action and be made a party thereto within the time herein allowed for the commencing of such action.

"If the recovery on the bond shall be inadequate to pay the amounts found found due to all creditors, judgment shall be given to each creditor pro rata of the amount of the recovery. The surety on said bond may pay into court, for distribution among the claimants and creditors, the full amount of the penal obligation on said bond, and in so doing the surety shall be relieved from further liability: Provided, That in all suits instituted under the provisions of this Act such personal notice of the pendency of such suits, informing them of their right to intervene as the court may order, shall be given to all known creditors, and in addition thereto notice of publication in some newspaper of general circulation, published in the State or town where the contract is being performed, for at least three successive weeks, the last publication to be at least three months before the time limited therefor."

[H. R. 6677, 74th Cong., 1st sess.]

A BILL requiring contracts for the construction, alteration, and repair of any public building or public work of the United States to be accompanied by a performance bond protecting the United States and by an additional bond for the protection of persons furnishing material and labor for the construction, alteration, or repair of said public buildings or public work

Be it enacted by the Senate and House of Representatives of the United States States of America in Congress assembled, That (a) before any contract, exceeding $2,000 in amount, for the construction, alteration, or repair of any public building or public work of the United States is awarded to any person, such person shall furnish to the United States the following bonds, which shall become binding upon the award of the contract to such person, who is hereinafter designated as contractor":

1. A performance bond with a surety or sureties satisfactory to the officer awarding such contract, and in such amount as he shall deem adequate, for the protection of the United States.

2. A payment bond with a surety or sureties satisfactory to such officer, for the protection of all persons supplying labor and material in the prosecution of the work provided for in said contract for the use of each such person. Said payment bond shall be in a sum not less than one-half of the total amount payable by the terms of the contract: Provided, That whenever the total amount so payable shall be not less than $5,000,000 nor more than $10,000,000, a bond in a sum not less than one-fourth of the amount payable under the terms of the contract may be accepted and if the amount payable under any such contract exceeds the sum of $10,000,000 a bond in the sum of $2,500,000 may be accepted.

(b) The contracting officer in respect of any contract is authorized to waive the requirement of a performance bond and payment bond for so much of the work under such contract as is to be performed in a foreign country if he finds that it is impracticable for the contractor to furnish such bonds.

(c) Nothing in this section shall be construed to limit the authority of any contracting officer to require a performance bond or other security in addition to those, or in cases other than the cases specified in subsection (a) of this section.

SEC. 2. (a) Every person who has furnished labor or material in the prosecution of the work provided for in such contract in respect of which a payment bond is furnished under this Act and who has not been paid in full therefor before the expiration of a period of ninety days after the day on which the last of the labor or material for which such claim is made was done, performed, furnished, or supplied by him, shall have the right to sue on such payment bond for such amount, or the balance thereof, unpaid at the time of institution of such suit and to prosecute said action to final execution and judgment for such sum or sums as may be justly due him: Provided, however, That any such person who has no contractual relationship, express or implied, with the contractor furnishing said payment bond shall not have a right of action upon the said payment bond unless such person shall have given written notice to said contractor within ninety days after such labor or material has been supplied by such person, stating with substantial accuracy the amount claimed and the name of the party with whom said person contracted. Such notice shall be served in any manner in which the United States marshal of the district in which the contractor does business or resides is authorized by law to serve a summons, save that such service need not be made by the marshal, or by mailing said notice by registered mail, postage prepaid, in an envelop addressed to the contractor at his last-known place of business or residence.

(b) Every suit instituted under this section shall be brought in the name of the United States for the use of the person suing, in the United States District Court for any district in which the contract was to be performed and executed and not elsewhere, irrespective of the amount in controversy in such suit, but no such suit shall be commenced after the expiration of one year after the date of final settlement of such contract. The United States shall not be liable for the payment of any costs or expenses of any such suit. SEC. 3. The Comptroller General is authorized and directed to furnish, to any person making application therefor who submits an affidavit that he has supplied labor or materials for such work and payment therefor has not been made or that he is being sued on any such bond, a certified copy of such bond and the contract for which it was given, which copy shall be prima facie evidence of the contents, execution, and delivery of the original, and, in case final settlement of such contract has been made, a certified statement of the date of such settlement, which shall be conclusive as to such date upon the parties. Applicants shall pay for such certified copies and certified statements such fees as the Comptroller General fixes to cover the cost of preparation thereof.

SEC. 4. The term person and the masculine pronoun as used throughout this Act shall include all persons whether individuals, assosiations, copartnerships, or corporations.

SEC. 5. This Act shall take effect upon the expiration of sixty days after the date of its enactment, but shall not apply to any contract awarded pursuant to any invitation for bids issued on or before the date it takes effect, or to any persons or bonds in respect of any such contract. The Act entitled "An Act for the protection of persons furnishing materials and labor for the construction of public works", approved August 13, 1894, as amended (U. S. C., title 40, sec. 270), is repealed, except that such Act shall remain in force with respect to contracts for which invitations for bids have been issued on or before the date this Act takes effect, and to persons or bonds in respect of such contracts. This Act shall thereupon replace the aforesaid Act of August 13, 1894 (U. S. C., title 40, sec. 270).

[H. R. 8519, 74th Cong., 1st sess.]

A BILL Requiring contracts for the construction, alteration, and repair of any public building or public work of the United States to be accompanied by a performance bond protecting the United States and by an additional bond for the protection of persons furnishing material and labor for the construction, alteration, or repair of said public buildings or public work

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That (a) before any contract, exceeding $2,000 in amount, for the construction, alteration, or repair of any

public building or public work of the United States is awarded to any person, such person shall furnish to the United States the following bonds, which shall become binding upon the award of the contract to such person, who is hereinafter designated as contractor":

(1) A performance bond with a surety or sureties satisfactory to the officer awarding such contract, and in such amount as he shall deem adequate, for the protection of the United States.

(2) A payment bond with a surety or sureties satisfactory to such officer for the protection of all persons supplying labor and material in the prosecution of the work provided for in said contract for the use of each such person. Whenever the total amount payable by the terms of the contract shall be not more than $1,000,000 the said payment bond shall be in a sum of one-half the total amount payable by the terms of the contract. Whenever the total amount payable by the terms of the contract shall be more than $1,000,000 and not more than $5,000,000, the said payment bond shall be in a sum of 40 per centum of the total amount payable by the terms of the contract. Whenever the total amount payable by the terms of the contract shall be more than $5,000,000 the said payment bond shall be in the sum of $2,500,000.

SEC. 2 (a) Every person who has furnished labor or material in the prosecution of the work provided for in such contract, in respect of which a payment bond is furnished under this Act and who has not been paid in full therefor before the expiration of a period of ninety days after the day on which the last of the labor was done or performed by him or material was furnished or supplied by him for which such claim is made, shall have the right to sue on such payment bond for the amount, or the balance thereof, unpaid at the time of institution of such suit and to prosecute said action to final execution and judgment for the sum or sums justly due him: Provided, however, That any person having direct contractual relationship with a subcontractor but no contractual relationship express or implied with the contractor furnishing said payment bond shall have a right of action upon the said payment bond upon giving written notice to said contractor within ninety days from the date on which such person did or performed the last of the labor or furnished or supplied the last of the material for which such claim is made, stating with substantial accuracy the amount claimed and the name of the party to whom the material was furnished or supplied or for whom the labor was done or performed. Such notice shall be served by mailing the same by registered mail, postage prepaid, in an envelop addressed to the contractor at any place he maintains an office or conducts his business, or his residence, or in any manner in which the United States marshal of the district in which the public improvement is situated is authorized by law to serve summons.

SEC. 3. The Comptroller General is authorized and directed to furnish, to any person making application therefor who submits an affidavit that he has supplied labor or materials for such work and payment therefor has not been made or that he is being sued on any such bond, a certified copy of such bond and the contract for which it was given, which copy shall be prima facie evidence of the contents, execution, and delivery of the original, and, in case final settlement of such contract has been made, a certified statement of the date of such settlement, which shall be conclusive as to such date upon the parties. Applicants shall pay for such certified copies and certified statements such fees as the Comptroller General fixes to cover the cost of preparation thereof.

SEC. 4. The term "person" and the masculine pronoun as used throughout this Act shall include all persons whether individuals, associations, copartnerships, or corporations.

Mr. Collins asked to be excused from attendance here this morning, on account of another engagement he has on another committee; and we have excused him. But I understand that Mr. Mead and Mr. Dockweiler are present; and Mr. Taylor is also here, and I believe we would like to hear from him first.

Mr. Taylor, we will be glad to hear from you in reference to your bill, H. R. 2068.

STATEMENT OF HON. J. WILL TAYLOR, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF TENNESSEE

Mr. TAYLOR. Mr. Chairman, I introduced this bill by request, and I do not profess to be an authority on this subject. But I have a gentleman here who has made a very close study of all these bills, and he is a prominent attorney of Philadelphia, and I would like to yield to him to have him analyze my bill and the other measures that have been introduced and referred to this committee.

Mr. MILLER. That is all right, Mr. Taylor.

Mr. TAYLOR. Would you like to have me address the committee? Mr. MILLER. You need not do so just now.

Mr. Dockweiler, I know that you are busy, like all the other Members, and the subcommittee will be glad to hear from you now. You may proceed.

Are you going to address your remarks to the bill introduced by you?

STATEMENT OF HON. JOHN F. DOCKWEILER, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF CALIFORNIA

Mr. DOCKWEILER. That is correct, Mr. Chairman-it is H. R. 5054.

That bill amends, of course, a very old act, which was approved August 13, 1894, for the protection of persons furnishing material and labor for construction on public works.

The subcommittee can well understand why a demand for that kind of a bill-a bill similar to that introduced by me-becomes prominent now, because of the tremendous amount of public works that is being undertaken throughout the country; and our public works are not confined any more to just building a post office and doing a little river and harbor work, but they seem to be ramified into all kinds and characters and classes of business and construction.

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