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FOR IMMEDIATE RELEASE

NOVEMBER 1, 1978

Office of the White House Press Secretary

THE WHITE HOUSE

EXECUTIVE ORDER
PROHIBITION AGAINST INFLATIONARY
PROCUREMENT PRACTICES

By the authority vested in me as President and as'
Commander in Chief of the Armed Forces -by the Constitution
and statutes of the United States of America, including

Sections 2(c) and 3(a) of the Council on Wage and Price -

Stability Act, as amended .(12 U.S.C. 1904 note) and

Section 205(a) of the Federal Property and Administrative

Services Act of 1949, as amended (40 U.S.C. 486(a)), and
in order to encourage noninflationary pay and price behavior
by private industry and labor, and to provide,for the
procurement by Executive agencies and Military Departments
of personal property and services at .prices and wage rates
which are noninflationary, it is hereby ordered as follows;
1-101. The Chairman of the Council on Wage and Price
Stability shal1:

(a)

Monitor company pay and price practices in order-

to determine compliance with the standards set. forth in
Section 1-102 of this Order;

(b) Promulgate "regulations and guidance to fu-rther .define these standards', and provide for appropriate

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exemptions and axceptions:
!

(c) Publish, or cause to be published, in accordance
with procedures designed to ensure fairness' and due process,

the names of individuals or companies which are not in
compliance with the standards;

(d)

Promulgate pr"cedures to be used in proceedings

before the Council' on n,alters pertaining to the standards,
and take such other action as may be necessary and consistent
with the purposes of this Section.

1-102.

Noninflationary wage and price -behavior shall

be measured by the following standards:

(a) For prices, noninflationary price behavior is
the deceleration by companies- of their current rate of
average price increase by at, least 0.5 percentage points

from their historical rate of annual price increase during

197 6-1977 except -where prof its have not increased.

.(b) For pay, noninflationary pay behavior is the
h-o'dirp of pay increases to not more than' 7 .percent annually
abo.ve .,h;eir recent historical levels.

(c)

These standards, which shall be further defined

by the Cha'irm.an of the Council on Wage and Price Stability,
shall be subject to certain limitations and exemptions as
determined by the Chairman.

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(OVER)

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I-I03. In order to ensure economy and efficiency in
government procurement, the head of each Executive agency

and Military Department shall ensure that their contracts

incorporate, on and after January 1, 1979» a clause which
requires compliance by the contractor, and by his subcon
tractors and suppliers, with the standards set forth in

Section 1-102 of this Order.

I-IOU. Each Executive agency and each Military Department
shall comply with the directions of the Administrator for
Federal Procurement Policy, who, in accord with Section 6
of the Office of Federal Procurement Policy Act (Ml U.S.C.
M05), shall be responsible for the overall direction of
the implementation of Section 1-103 including the issuance
of regulations and procedures for determining exceptions
and granting exemptions.

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