A-24542, DECEMBER 7, 1928, 8 COMP. GEN. 284

A-24542: Dec 7, 1928

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ARE TO BE CREDITED AS A MISCELLANEOUS RECEIPT AND NOT TO THE RECLAMATION FUND. THERE IS CITED 12 COMP. IT IS SHOWN THAT J. FOR THE DELIVERY OF A QUANTITY OF SAND AND GRAVEL TO THE RECLAMATION SERVICE AT ISLAND SIPHON ON THE NORTH BANK OF THE RIO GRANDE RIVER AND THAT THE SAND AND GRAVEL WERE FOR USE IN A RECLAMATION PROJECT. MCMILLAN DEFAULTED UNDER HIS CONTRACT AND IT WAS NECESSARY TO SECURE THE SAND AND GRAVEL ELSEWHERE. WOULD HAVE BEEN $996. THE COST OF SECURING IT ELSEWHERE WAS $2. THERE WAS CREDITED AGAINST THE EXCESS COST THE SUM OF $48 DUE MCMILLAN AND HE IS TO BE CHARGED WITH THE BALANCE OF $1. THE CREDITED ITEM OF $48 WAS CERTIFIED FOR DEPOSIT IN THE TREASURY AS A . THE RECLAMATION FUND WAS ESTABLISHED BY THE ACTS OF JUNE 17.

A-24542, DECEMBER 7, 1928, 8 COMP. GEN. 284

CONTRACTS - DEFAULT - DAMAGES - RECLAMATION SERVICE WHERE A CONTRACTOR BREACHES HIS CONTRACT WITH THE UNITED STATES FOR WORK IN CONNECTION WITH THE RECLAMATION FUND, THE DAMAGES, IF ANY, COLLECTED ON ACCOUNT OF SUCH BREACH, ARE TO BE CREDITED AS A MISCELLANEOUS RECEIPT AND NOT TO THE RECLAMATION FUND.

COMPTROLLER GENERAL MCCARL TO THE SECRETARY OF THE INTERIOR, DECEMBER 7, 1928:

THERE HAS BEEN RECEIVED, PRESUMABLY BY YOUR DIRECTION, A LETTER DATED NOVEMBER 15, 1928, FROM THE COMMISSIONER OF THE BUREAU OF RECLAMATION, DEPARTMENT OF THE INTERIOR, REQUESTING THAT THE SUM OF $48 COLLECTED IN SETTLEMENT US-2650-I, DATED NOVEMBER 14, 1928, OF THE ACCOUNT OF J. C. MCMILLAN, UNDER CONTRACT NO. 1-16-R-199, DATED APRIL 16, 1928, BE DEPOSITED TO THE CREDIT OF ,RECLAMATION FUND" INSTEAD OF BEING CREDITED AS A MISCELLANEOUS RECEIPT IN THE TREASURY, AND IN SUPPORT THEREOF, THERE IS CITED 12 COMP. DEC. 733.

IT IS SHOWN THAT J. C. MCMILLAN ENTERED INTO THE CONTRACT OF APRIL 16, 1928, FOR THE DELIVERY OF A QUANTITY OF SAND AND GRAVEL TO THE RECLAMATION SERVICE AT ISLAND SIPHON ON THE NORTH BANK OF THE RIO GRANDE RIVER AND THAT THE SAND AND GRAVEL WERE FOR USE IN A RECLAMATION PROJECT. AFTER DELIVERY OF 40 CUBIC YARDS OF GRAVEL AT THE CONTRACT PRICE OF $48, MCMILLAN DEFAULTED UNDER HIS CONTRACT AND IT WAS NECESSARY TO SECURE THE SAND AND GRAVEL ELSEWHERE. THE COST OF THE REMAINING CONTRACT QUANTITY OF SAND AND GRAVEL UNDER THE CONTRACT OF APRIL 16, 1928, WOULD HAVE BEEN $996, AND THE COST OF SECURING IT ELSEWHERE WAS $2,130, OR AN EXCESS COST OF $1,134. THERE WAS CREDITED AGAINST THE EXCESS COST THE SUM OF $48 DUE MCMILLAN AND HE IS TO BE CHARGED WITH THE BALANCE OF $1,086. THE CREDITED ITEM OF $48 WAS CERTIFIED FOR DEPOSIT IN THE TREASURY AS A ,MISCELLANEOUS RECEIPT, ASSESSMENTS, AND REIMBURSEMENTS.'

THE RECLAMATION FUND WAS ESTABLISHED BY THE ACTS OF JUNE 17, 1902, 32 STAT. 388, AS AMENDED BY THE ACT OF JUNE 12, 1906, 34 STAT. 259, AUGUST 13, 1914, 38 STAT. 690, AND JUNE 12, 1917, 40 STAT. 149. THE ACT OF 1902 PROVIDED THAT MONEYS RECEIVED FROM THE SALE AND DISPOSAL OF PUBLIC LANDS IN CERTAIN WESTERN STATES AND THE SURPLUS OF FEES AND COMMISSIONS IN EXCESS OF ALLOWANCES TO REGISTERS AND RECEIVERS AND AND CERTAIN PROCEEDS SET ASIDE FOR EDUCATIONAL AND OTHER PURPOSES, SHOULD CONSTITUTE A SPECIAL FUND IN THE TREASURY TO BE KNOWN AS THE "RECLAMATION FUND" TO BE USED IN THE EXAMINATION, SURVEY, ETC., OF IRRIGATION WORK IN THE ARID AND SEMIARID LANDS IN THE SAID STATES AND TERRITORIES. THE ACT OF JUNE 25, 1910, 36 STAT. 836, REQUIRED THE RECLAMATION FUND TO BE DEVOTED EXCLUSIVELY TO THE COMPLETION OF WORK ON RECLAMATION PROJECTS AND THERE HAVE BEEN PROVISIONS FROM TIME TO TIME FOR REPLENISHMENT OF SAID FUND. THE ACT OF JUNE 12, 1917, PROVIDED THAT:

ALL MONEYS HERETOFORE OR HEREAFTER REFUNDED OR RECEIVED IN CONNECTION WITH OPERATIONS UNDER THE RECLAMATION LAW, EXCEPT REPAYMENTS OF CONSTRUCTION AND OPERATION AND MAINTENANCE CHARGES, SHALL BE A CREDIT TO THE APPROPRIATION FOR THE PROJECT OR OPERATION FROM OR ON ACCOUNT OF WHICH THE COLLECTION IS MADE, AND SHALL BE AVAILABLE FOR EXPENDITURE IN LIKE MANNER AS IF SAID SUM HAD BEEN SPECIFICALLY APPROPRIATED FOR SAID PROJECT OR OPERATION.

IT APPEARS TO BE CONTENDED THAT THE DAMAGES OF $1,134, INCLUDING THE COLLECTED ITEM OF $48, SHOULD BE DEPOSITED IN THE TREASURY TO THE CREDIT OF THE RECLAMATION FUND INSTEAD OF TO THE GENERAL FUND IN THE TREASURY IN ACCORDANCE WITH SECTION 3617, REVISED STATUTES.

THE DECISION IN 12 COMP. DEC. 733 IS NOT APROPOS. IT WAS HELD IN THAT DECISION THAT THE PROCEEDS OF SALES OF PROPERTY BELONGING TO THE RECLAMATION SERVICE, REQUIRED BY THE ACT OF MARCH 3, 1905, 33 STAT. 1032, TO BE DEPOSITED TO THE CREDIT OF THE RECLAMATION FUND SHOULD NOT BE DEPOSITED AS A MISCELLANEOUS RECEIPT. THE PRESENT CASE DOES NOT INVOLVE A SALE OF PROPERTY BELONGING TO THE RECLAMATION SERVICE. IT ARISES OUT OF A BREACH OF CONTRACT WITH THE UNITED STATES. WHILE IT IS TRUE THAT THE CONTRACT WAS IN CONNECTION WITH THE RECLAMATION SERVICE, IT IS EQUALLY TRUE THAT THE COST OF ANY PROCEEDINGS TO COLLECT DAMAGES SUSTAINED BECAUSE OF THE FAILURE OF THE CONTRACTOR TO COMPLY WITH THE TERMS OF HIS CONTRACT WOULD NOT BE CHARGEABLE TO THE RECLAMATION FUND. EVEN IF IT WERE NOT FOR THE TERMS OF THE STATUTE ESTABLISHING THE RECLAMATION FUND AND WHICH DOES NOT PROVIDE THAT DAMAGES SUSTAINED BY THE UNITED STATES ON THE BREACH OF A CONTRACT, IF AND WHEN COLLECTED, SHALL BE CREDITED THERETO, IT IS OBVIOUSLY IMPROPER TO CREDIT SAID FUND WITH DAMAGES COLLECTED AND NOT CHARGE IT WITH THE EXPENSE OF COLLECTING SUCH DAMAGE.

THE ACTION HERETOFORE TAKEN IN CREDITING THE ITEM OF $48 TO MISCELLANEOUS RECEIPTS APPEARS PROPER AND IS AFFIRMED.