B-128240, JAN 23, 1968

B-128240, JAN 23, 1968

PRECIS-UNAVAILABLE

SECRETARY OF THE ARMY:

WE REFER TO LETTER OF NOVEMBER 20, 1967, PDTATAC, FROM THE UNDER SECRETARY OF THE ARMY AND CHAIRMAN OF THE PER DIEM, TRAVEL AND TRANSPORTATION ALLOWANCE COMMITTEE, TRANSMITTED HERE ON NOVEMBER 29, 1967, PDTATAC 67-38, BY THE EXECUTIVE ASSISTANT OF THAT COMMITTEE, WHEREIN OUR DECISION IS REQUESTED CONCERNING THE LEGAL PROPRIETY OF A PROPOSED AMENDMENT TO JTR, VOLUME II. THE AMENDMENT WOULD PROVIDE THAT CERTAIN TRAVELERS MAY BE REQUIRED TO FURNISH BONDS OR OTHER SECURITY WHEN THE INTERESTS OF THE GOVERNMENT WOULD NOT OTHERWISE BE FULLY PROTECTED AND THAT WHEN SUCH BONDS ARE REQUIRED THE COST THEREOF WOULD BE REIMBURSABLE TO THE TRAVELER. BY WAY OF EXAMPLE THE UNDER SECRETARY'S LETTER LISTS 4 CATEGORIES OF PERSONS FOR WHOM REQUESTS FREQUENTLY ARE RECEIVED FOR ADVANCES OF TRAVEL FUNDS WHO ARE NOT NORMALLY WITHIN THE ADMINISTRATIVE OR JURISDICTIONAL CONTROL OF THE DEPARTMENT OR AGENCY FROM WHOM THE ADVANCES OF FUNDS ARE REQUESTED. IT IS INDICATED THAT IN THE SITUATIONS COVERED BY CATEGORIES 1 AND 2, BELOW, THE PROCURING OF A BOND GENERALLY WOULD BE NECESSARY TO FULLY PROTECT THE INTERESTS OF THE UNITED STATES.

THE CATEGORIES ENUMERATED IN THE UNDER SECRETARY'S LETTER ARE RESTATED AS FOLLOWS:

"1. MILITARY PERSONNEL OF FOREIGN COUNTRIES WHO ARE INVITED TO VISIT THE OFFICE OF THE SECRETARY OF DEFENSE, MILITARY INSTALLATIONS, ETC.;

"2. PERSONNEL FROM PRIVATE BUSINESS ORGANIZATIONS WHO ARE NOT APPOINTEES BUT ARE TRAVELING ON INVITATIONAL ORDERS;

"3. CIVILIAN PERSONNEL ON REIMBURSABLE OR NONREIMBURSABLE LOAN FROM OTHER DEPARTMENTS AND AGENCIES OF THE EXECUTIVE BRANCH;

"4. CIVILIAN PERSONNEL ON TEMPORARY DUTY FROM OTHER DOD COMPONENTS."

SECTION 14 OF TITLE 6, U.S.C. PROVIDES IN PART AS FOLLOWS:

"*** THE HEAD OF EACH DEPARTMENT AND INDEPENDENT ESTABLISHMENT IN THE EXECUTIVE BRANCH OF THE FEDERAL GOVERNMENT SHALL OBTAIN, UNDER REGULATIONS WHICH SHALL BE PROMULGATED BY THE SECRETARY OF THE TREASURY, BLANKET, POSITION SCHEDULE, OR OTHER TYPES OF SURETY BONDS COVERING THE CIVILIAN OFFICERS AND EMPLOYEES AND MILITARY PERSONNEL OF SUCH DEPARTMENT OR INDEPENDENT ESTABLISHMENT WHO ARE REQUIRED BY LAW OR ADMINISTRATIVE RULING TO BE BONDED. ***"

THE QUOTED CODE PROVISION APPLIES ONLY TO CIVILIAN OFFICERS AND EMPLOYEES AND MILITARY PERSONNEL OF A DEPARTMENT OR INDEPENDENT ESTABLISHMENT IN THE EXECUTIVE BRANCH WHO ARE REQUIRED BY LAW OR ADMINISTRATIVE RULING TO BE BONDED, AND IN SUCH A CASE THE STATUTORY PROVISION CONTEMPLATES THAT THE HEAD OF THE DEPARTMENT OR AGENCY, OR AN OFFICIAL TO WHOM HIS AUTHORITY IS DELEGATED, PROCURE THE BOND.

THE PERSONS REFERRED TO IN THE CATEGORIES ENUMERATED IN THE UNDER SECRETARY'S LETTER FOR THE MOST PART ARE NOT CIVILIAN OFFICERS OR EMPLOYEES OR MILITARY PERSONNEL OF THE DEPARTMENT OR AGENCY REQUIRING THE BONDS AND WHOSE APPROPRIATIONS WOULD BE CHARGEABLE WITH THE COST OF THE BONDS. THUS THE QUOTED CODE PROVISION DOES NOT EXPRESSLY AUTHORIZE THE BONDING OF SUCH INDIVIDUALS.

THE QUESTION REMAINS WHETHER, INDEPENDENTLY OF 6 U.S.C. 14, THE INDIVIDUALS IN THE ENUMERATED CATEGORIES WHO ARE NOT EXPRESSLY COVERED BY SUCH SECTION MAY BE BONDED AT GOVERNMENT EXPENSE WHEN IT IS DEEMED NECESSARY TO PROTECT THE INTERESTS OF THE GOVERNMENT. IF THEY ARE REQUIRED TO PAY FOR THE BONDS THEMSELVES WITHOUT REIMBURSEMENT - PARTICULARLY PRIVATE INDIVIDUALS TRAVELING UNDER INVITATIONAL ORDERS - THEY MAY REFUSE TO RENDER NEEDED SERVICE OR CONSULTATION FOR THE BENEFIT OF THE UNITED STATES. THUS, IT IS OUR VIEW THAT IN ANY CASE WHERE IT IS DETERMINED THAT AN INDIVIDUAL'S SERVICES ARE NECESSARY FOR THE FULFILLMENT OF THE PURPOSES FOR WHICH THE DEPARTMENT'S OR AGENCY'S APPROPRIATIONS WERE MADE, SUCH APPROPRIATIONS MAY BE CHARGED WITH THE COST OF PROCURING BONDS NECESSARY FOR THE PROTECTION OF THE INTERESTS OF THE UNITED STATES. IT IS OUR FURTHER VIEW THAT WHETHER THE BOND SHOULD BE PROCURED DIRECTLY BY THE AGENCY INVOLVED OR BY THE PERSON COVERED BY THE BOND WHO WILL BE REIMBURSED THE COST THEREOF BY THE AGENCY IS A MATTER WHICH SHOULD BE DETERMINED UPON THE BASIS OF THE INTERESTS OF THE UNITED STATES, INCLUDING THE COST FACTOR AND OTHER PERTINENT CONSIDERATIONS.

WHILE, AS INDICATED ABOVE, WE FIND NO LEGAL OBJECTION TO THE PROPOSED AMENDMENT TO JTR, VOLUME II, WE HAVE SOME DOUBT WHETHER THE AMOUNTS THAT WOULD BE RECOVERED UNDER THE PROPOSED BONDING PROGRAM WOULD EQUAL THE COST OF PROCURING THE BONDS.

IN OUR AUDIT REPORT ON THE REVIEW OF BONDING PROGRAM FOR EMPLOYEES OF THE FEDERAL GOVERNMENT, MARCH 29, 1962, WE POINTED OUT THAT THE TOTAL COST TO THE GOVERNMENT FOR BOND PREMIUMS FOR THE PERIOD JANUARY 1, 1956 - EFFECTIVE DATE OF 6 U.S.C. 14 QUOTED ABOVE - TO JUNE 30, 1961, WAS $1,673,000. DURING THAT SAME PERIOD ONLY SEVEN AGENCIES REPORTED HAVING FILED CLAIMS AGAINST SURETIES UNDER SUCH BONDS. THE AGGREGATE AMOUNT OF THE CLAIMS SO FILED TOTALED $922,000 OF WHICH ONLY $793,400 HAS BEEN RECOVERED. HENCE, UNLESS YOU HAVE FACTUAL INFORMATION DEMONSTRATING THAT THE PROPOSED CHANGE IN THE REGULATION WOULD BE TO THE FINANCIAL ADVANTAGE OF THE UNITED STATES WE WOULD NOT RECOMMEND THAT SUCH CHANGE BE MADE IN THE PRESENT PROVISIONS OF JTR, VOLUME II.

THE QUESTIONS PRESENTED IN YOUR UNDER SECRETARY'S LETTER ARE ANSWERED ACCORDINGLY.