A-10131, AUGUST 5, 1925, 5 COMP. GEN. 93

A-10131: Aug 5, 1925

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IS IN CONTRAVENTION OF SECTION 341 OF THE FEDERAL CRIMINAL CODE. ARE OPEN TO CRITICISM IRRESPECTIVE OF THE BONA FIDES WITH WHICH THE EMPLOYEE'S DETERMINATION MAY BE EXERCISED AND CAN NOT BE SANCTIONED BY THE GENERAL ACCOUNTING OFFICE. 1925: I HAVE YOUR LETTER OF JUNE 12. AS FOLLOWS: I HAVE TO ADVISE YOU THAT PUBLIC HEALTH SERVICE RELIEF STATION NO. 263 WAS ESTABLISHED AT KODIAK. CHARLES LYLE HAWK WAS THE ONLY PHYSICIAN RESIDING AT THAT POINT. WAS RECOMMENDED. WAS APPROVED BY THIS DEPARTMENT UNDER DATE OF FEBRUARY 1. BLANK PROPOSAL FORMS WERE MAILED TO DOCTOR HAWK AS THE REPRESENTATIVE OF THIS SERVICE AT KODIAK. HE WAS REQUESTED TO SOLICIT. " AND THAT THIS IS ABSOLUTELY THE ONLY HOSPITAL AT THAT PLACE FOR THE TREATMENT OF SERVICE BENEFICIARIES IN NEED OF HOSPITAL CARE.

A-10131, AUGUST 5, 1925, 5 COMP. GEN. 93

OFFICERS AND EMPLOYEES - CONTRACTING WITH GOVERNMENT A CONTRACT FOR HOSPITAL TREATMENT OF PUBLIC HEALTH SERVICE PATIENTS NEGOTIATED AND SIGNED BY THE ACTING ASSISTANT SURGEON AT A PUBLIC HEALTH STATION IN ALASKA, BOTH FOR HIMSELF AS PROPRIETOR OF THE HOSPITAL AND FOR THE UNITED STATES AS CONTRACTING OFFICER, IS IN CONTRAVENTION OF SECTION 341 OF THE FEDERAL CRIMINAL CODE, 35 STAT. 1153. CONTRACTS BETWEEN THE UNITED STATES AND AN EMPLOYEE TO FURNISH A SERVICE, THE EXTENT OF AND NECESSITY FOR WHICH REST UPON THE DETERMINATION OF THE CONTRACTING EMPLOYEE, ARE OPEN TO CRITICISM IRRESPECTIVE OF THE BONA FIDES WITH WHICH THE EMPLOYEE'S DETERMINATION MAY BE EXERCISED AND CAN NOT BE SANCTIONED BY THE GENERAL ACCOUNTING OFFICE.

ACTING COMPTROLLER GENERAL GINN TO THE SECRETARY OF THE TREASURY, AUGUST 5, 1925:

I HAVE YOUR LETTER OF JUNE 12, 1925, AS FOLLOWS:

I HAVE TO ADVISE YOU THAT PUBLIC HEALTH SERVICE RELIEF STATION NO. 263 WAS ESTABLISHED AT KODIAK, ALASKA, ON JANUARY 10, 1925, AND IT THEN DEVELOPED THAT ONE DR. CHARLES LYLE HAWK WAS THE ONLY PHYSICIAN RESIDING AT THAT POINT.

UPON HAVING ASCERTAINED THAT DOCTOR HAWK POSSESSED THE NECESSARY PROFESSIONAL QUALIFICATIONS, HIS APPOINTMENT AS A.A. SURGEON IN CHARGE OF THE PUBLIC HEALTH SERVICE RELIEF STATION AT KODIAK, ALASKA, WAS RECOMMENDED, AND WAS APPROVED BY THIS DEPARTMENT UNDER DATE OF FEBRUARY 1, 1925.

SECTION 3709, REVISED STATUTES, PROVIDES THAT COMPETITIVE PROPOSALS BE SOLICITED FOR ALL SERVICES TO BE FURNISHED TO THE GOVERNMENT. ACCORDINGLY, BLANK PROPOSAL FORMS WERE MAILED TO DOCTOR HAWK AS THE REPRESENTATIVE OF THIS SERVICE AT KODIAK, AND HE WAS REQUESTED TO SOLICIT, THROUGH POSTER AND CIRCULAR LETTER ADVERTISING, PROPOSALS FOR FURNISHING THE VARIOUS SUPPLIES AND SERVICES REQUIRED AT THAT STATION DURING THE FISCAL YEAR ENDING JUNE 30, 1926.

AS A RESULT OF THIS ACTION IT DEVELOPED THAT DOCTOR HAWK OWNS AND OPERATES AN INSTITUTION AT KODIAK UNDER THE NAME OF "KODIAK HOSPITAL," AND THAT THIS IS ABSOLUTELY THE ONLY HOSPITAL AT THAT PLACE FOR THE TREATMENT OF SERVICE BENEFICIARIES IN NEED OF HOSPITAL CARE, AND THAT THE NEAREST POINT WHERE OTHER HOSPITAL CARE COULD BE SECURED IS AT CORDOVA, ALASKA, APPROXIMATELY 325 MILES DISTANT FROM KODIAK.

DOCTOR HAWK, AS PROPRIETOR OF THE KODIAK HOSPITAL, SUBMITTED A PROPOSAL TO FURNISH THE NECESSARY HOSPITAL CARE FOR SERVICE BENEFICIARIES DURING THE FISCAL YEAR 1926, AND, FOR OBVIOUS REASONS, NO OTHER PROPOSAL WAS RECEIVED.

HOWEVER, IN VIEW OF THE PROVISIONS OF SECTION 1783, REVISED STATUTES, WHICH APPEAR TO PROHIBIT THE UTILIZATION OF THE HOSPITAL FACILITIES OFFERED BY DOCTOR HAWK OR PROHIBIT HIS EMPLOYMENT BY THE UNITED STATES IF HIS HOSPITAL FACILITIES ARE USED, ALSO IN VIEW OF THE ISOLATED LOCATION OF THE RELIEF STATION IN QUESTION AND OF THE NECESSITY FOR MAINTAINING RELIEF FACILITIES FOR SERVICE BENEFICIARIES AT THAT POINT, DECISION IS DESIRED AS TO WHETHER THE PROPOSAL SIGNED BY DOCTOR HAWK AS PROPRIETOR OF THE KODIAK HOSPITAL COULD PROPERLY BE ACCEPTED AND VOUCHERS BASED THEREON PAID FROM THE APPROPRIATION "PAY OF PERSONNEL AND MAINTENANCE OF HOSPITALS, PUBLIC HEALTH SERVICE, 6.'

SECTION 1783, REVISED STATUTES, CITED BY YOU, WAS EXPRESSLY REPEALED BY SECTION 341 OF THE FEDERAL CRIMINAL CODE, 35 STAT. 1153, BUT SIMILAR LANGUAGE WAS USED IN SECTION 41 OF THAT CODE, 35 STAT. 1097, WHICH PROVIDES:

NO OFFICER OR AGENT OF ANY CORPORATION, JOINT STOCK COMPANY, OR ASSOCIATION, AND NO MEMBER OR AGENT OF ANY FIRM, OR PERSON DIRECTLY OR INDIRECTLY INTERESTED IN THE PECUNIARY PROFITS OR CONTRACTS OF SUCH CORPORATION, JOINT STOCK COMPANY, ASSOCIATION, OR FIRM, SHALL BE EMPLOYED OR SHALL ACT AS AN OFFICER OR AGENT OF THE UNITED STATES FOR THE TRANSACTION OF BUSINESS WITH SUCH CORPORATION, JOINT STOCK COMPANY, ASSOCIATION OR FIRM * * *.

WHILE THIS STATUTE DOES NOT PROHIBIT AN EMPLOYEE CONTRACTING WITH THE GOVERNMENT IF THE EMPLOYEE DOES NOT AT THE SAME TIME ACT AS AGENT FOR THE GOVERNMENT IN NEGOTIATING OR SIGNING THE CONTRACT (SEE DECISION OF THIS OFFICE OF JANUARY 5, 1925, A-6515; ALSO 14 OP.ATTY.GEN. 482; 24 ID. 557), IT IS INTENDED TO PROHIBIT EMPLOYEES OF THE UNITED STATES ACTING FOR BOTH THE GOVERNMENT AND THE CONTRACTOR IN CONTRACTING WITH THE GOVERNMENT. CONTRACT NEGOTIATED OR SIGNED BY DOCTOR HAWK, BOTH FOR HIMSELF AS PROPRIETOR OF THE HOSPITAL, AND FOR THE UNITED STATES AS CONTRACTING OFFICER, WOULD BE IN CONTRAVENTION OF THIS STATUTE.

THERE IS NO STATUTE PROHIBITING GENERALLY CONTRACTS BETWEEN THE GOVERNMENT AND ITS EMPLOYEES OR OFFICERS, UNLESS THE SERVICE TO BE RENDERED UNDER THE CONTRACT IS SUCH AS COULD HAVE BEEN REQUIRED OF THE EMPLOYEE IN HIS OFFICIAL CAPACITY. UNDER SUCH CIRCUMSTANCES ANY CONTRACT FOR ADDITIONAL COMPENSATION WOULD BE IN CONTRAVENTION OF SECTIONS 1764 AND 1765, REVISED STATUTES, 2 COMP. GEN. 397, 730, 837. WHILE NOT NECESSARILY UNLAWFUL, IF NOT IN CONTRAVENTION OF SPECIFIC STATUTORY PROHIBITIONS, CONTRACTS BETWEEN THE GOVERNMENT AND ITS EMPLOYEES PRESENT AN UNDESIRABLE SITUATION, SUGGESTING FAVORITISM, AND ARE NOT TO BE ENTERED INTO EXCEPT FOR THE MOST CONVINCING REASONS, SUCH AS THE NONAVAILABILITY OF OTHER SOURCES FOR THE SERVICE TO BE RENDERED, AND EVEN THE NONAVAILABILITY OF OTHER SOURCES MAY NOT ALWAYS JUSTIFY SUCH CONTRACTS. ESPECIALLY IS THE PRACTICE OBJECTIONABLE WHEN THE CONTRACTING IS BETWEEN AN EMPLOYEE AND THE PARTICULAR SERVICE IN WHICH HE IS EMPLOYED, AS IN THE INSTANT CASE. COMP. GEN. 116; MS. DECISION OF COMPTROLLER GENERAL OF JANUARY 5, 1925, A- 6516; 14 OP.ATTY.GEN. 482.

UNDER THE CIRCUMSTANCES PRESENTED IN THE QUESTION SUBMITTED BY YOU IT IS UNDERSTOOD THAT IT WOULD BE THE DUTY OF THE ACTING ASSISTANT SURGEON TO DETERMINE THE NECESSITY FOR THE HOSPITALIZATION OF PATIENTS APPLYING TO HIS STATION FOR RELIEF, SUCH HOSPITALIZATION TO BE FURNISHED BY HIM UNDER A CONTRACT FROM WHICH HE WOULD ULTIMATELY RECEIVE A BENEFIT. CONTRACTING BETWEEN THE GOVERNMENT AND AN EMPLOYEE TO FURNISH A SERVICE THE EXTENT OF AND NECESSITY FOR WHICH REST UPON THE DETERMINATION OF THE CONTRACTING EMPLOYEE PRESENTS A SITUATION INVITING CRITICISM, IRRESPECTIVE OF THE BONA FIDES WITH WHICH THE EMPLOYEE'S DETERMINATION MAY BE EXERCISED, AND CAN NOT BE SANCTIONED BY THIS OFFICE. YOUR QUESTION IS ACCORDINGLY ANSWERED IN THE NEGATIVE.