Information Center, National Reporter Systems, Inc., 1976; Thomas J. Madden, "Future Directions for Federal Assistance Programs: Lessons From Block Grants and Revenue Sharing", 36 Federal Bar Journal 107-120 (1977); Thomas D. Morgan, "Achieving National Goals Through Federal Contracts: Giving Form To An Unconstrained Administrative Process", Wisconsin Law Review 301-348 (1974); a draft of Chapter VIII of a forthcoming book entitled CATEGORICAL GRANTS: THEIR ROLE AND DESIGN, by the Advisory Commission on Intergovernmental Relations; and, selected JURIS COMPUTER searches of the full text of the United States Code.

Part II of this report sets forth other selected federal statutes which attach significant national policy requirements to all or several federal assistance programs. These statutes may be considered along with those enumerated in Part I in creating a simplified and coordinated mechanism for administering generally applicable federal assistance requirements under Title I of the draft bill considered herein.

The following comments on recent governmental action in the grant area are offered as backround and perspective for the compliation which follows. There has occured in recent years a substantial increase in the number and size of federal grant programs, to the degree that the Federal Government now spends as much money on grant programs as it does in contract procurement. And, while the 1965 CATALOG OF FEDERAL DOMESTIC ASSISTANCE listed only 206 federal grant programs, in 1975 it listed over 500 programs, and the most recent 1977 CATALOG lists over 1,000 such programs. See FEDERAL GRANTS REPORTER, p. 101. President Carter's memorandum on grant reform, dated September 9, 1977, cites the importance

of the federal grant-in-aid system as a way of dealing with national problems in a way which encourages innovative participation by state and local governments. However, the President's memorandum goes on to state

that as grants have proliferated the system "has grown increasingly irrational, inefficient, and insensitive to the various local needs" it was designed to accomodate. Nearly every federal agency has produced its own grant-related regulations, guidelines and forms to assure compliance by recipients with numerous national policy goals. Many regulations have become burdensome to recipients and inconsistent with other agency

requirements.

The President cited the recent efforts of three agencies

to catalog the various grant requirements in the areas of environmental policy (Council on Environment asl Quality), civil rights (Equal Employment Opportunity Commission), and citizen participation (Community Services Administration). A copy of the President's memorandum is include with this report.

The most recent congressional action in this area is the enactment of Public Law 95-224, the Federal Grant and Cooperative Agreement Act of 1977, signed into law on February 3, 1978. The Act's stated purpose is to distinguish federal grant and cooperative agreement relationships from federal procurrement relationships. The Act also mandates a study by the Office of Management and Budget on the feasibility of developing a comprehensive system of guidelines for the use of federal grant assistance agreements. A copy of P. L. 95-224 is attached to this report.

I.

(1) Labor Practices Requirements

There are three major federal statutes which attach labor practices requirements to all or various federal assistance programs. The oldest is the Davis-Bacon Act, 40 U.S.c. § 276a (1970). The provisions of this Act, which originally applied only to construction contracts issued by the Federal Government itself, have been specifically incorporated into the enabling statutory authorization of numerous grant programs through the years. This Act provides that the Secretary of Labor make a determination of the minimum wages (the prevailing rate in the area of construction) to be paid laborers under a federal contract. A quick JURIS COMPUTER search located a number of grant programs which have DavisBacon provisions incorporated in them including the Headstart, Economic Opportunity, and Community Partnership Act of 1974, P.L. 93-644, the Indian Self-Determination and Education Assistance Act of 1974, P.L. 93-638, the Housing and Community Development Act of 1974, P.L. 93-383, and the Resource Recovery Act of 1970, P.L. 91-512.

In 1962 Congress passed the Work Hours Act, P.L. 87-581, 40 U.S.C.

§ 327 et seq., which provides that the wage rates in any federally-assisted program be computed on the basis of the eight-hour day and the forty-hour week. Overtime work must be paid for at the rate of one and a half times the computed wage rate. See 40 U.S.C. § 328, 329. Thus, the provisions of this statute apply to any contract for work which is "financed in whole or in part by loans or grants from ... the United States or any

agency or instrumentality thereof under any statute of the United States providing wage standards for such work." 40 U.S.C. § 329. If a contractor or subcontractor fails to comply with Work Hours Act provisions, the grantor agency may withhold grant funds sufficient to pay the amount of unpaid wages and any liquidated damages.

A third major statute which provides for labor requirements in an area of federal assistance programs is the Urban Mass Transportation Act of 1964, P.L. 93-503. This Act provides for governmental assistance in the area of mass transportation systems. The statute specifically provides that it shall be a condition of assistance under the Act that certain protections be afforded employees affected by such assistance. These protections include the preservation of rights, privileges and benefits under existing collective bargaining agreements, the protection of individual employees against a worsening of their positions with respect to their employment and paid training and retraining programs, etc. 49 U.S.C. 1609(c). Authority is given to the Secretary of Labor to specify the exact terms and conditions of such protective arrangements in each grant of federal assistance under the Act. Ibid.

(2) Equal Employment Opportunity Requirement s

Title VII of the Civil Rights Act of 1964, 42 U.S.C. 2000e-2, sets forth the basic federal prohibition against discrimination in public and private employment on the basis of race, color, religion, sex or national origin. Although this prohibition agianst discrimination in employment does not specifically apply to grant programs it has been applied to certain federally-assisted projects by Executive Order No. 11246, as amended by Executive Order No. 11478, August 8, 1969. This Executive Order, in Part III, specifically prohibits employment discrimination in all federally-assisted construction contracts and establishes the Office of Federal Contract Compliance Programs within the Department of Labor to oversee compliance with that Order.

Enforcement of equal employment opportunity provisions is scattered among various agencies, including the Equal Employment Opportunity Commission, the Office of Federal Contract Compliance Programs, the Department of Labor, the Department of Justice and the Civil Service Commission. The Equal Employment Opportunities Coordinating Council, established by Section 715 of the Civil Rights Act of 1972, has had limited success in coordinating guidelines of different agencies in this area. See U.S. Civil Rights Commission, FEDERAL CIVIL RIGHTS ENFORCEMENT TO ELIMINATE EMPLOYMENT DISCRIMINATION (Washington D.C.: U.S.

EFFORT -

Government Printing Office, 1975).