A-49009, A-86305, MAY 26, 1937, 16 COMP. GEN. 1037

A-49009,A-86305: May 26, 1937

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IS NOT A COMPLIANCE WITH SAID ACT. AS FOLLOWS: REFERENCE IS MADE TO SUBPARAGRAPH 6A. RELATIVE TO THE FURNISHING BY VENDORS OF CERTIFICATES IN REGARD TO DOMESTIC PRODUCTION WHEN SUPPLIES ARE PURCHASED IN THE OPEN MARKET OR UNDER CONTRACTS PROVIDING FOR DELIVERIES FROM TIME TO TIME ON CALL. - WHEN SUPPLIES ARE PURCHASED IN THE OPEN MARKET OR UNDER CONTRACTS PROVIDING FOR DELIVERIES FROM TIME TO TIME ON CALL. THERE IS INCLOSED COPY OF A LETTER FROM THE AUDIT DIVISION. READING IN PART AS FOLLOWS: "WHEN PURCHASES ARE UNDER CONTRACTS MADE BY THE WAR DEPARTMENT AND THERE HAS BEEN A SATISFACTORY SHOWING THAT THE ARTICLES TO BE FURNISHED THEREUNDER ARE OF DOMESTIC GROWTH. NO FURTHER SHOWING TO THAT EFFECT IS NECESSARY IN CONNECTION WITH VOUCHERS MAKING PAYMENTS THEREUNDER.'.

A-49009, A-86305, MAY 26, 1937, 16 COMP. GEN. 1037

CONTRACTS - CERTIFICATES - DOMESTIC ORIGIN OF ARTICLES INVOLVED THE PROCEDURE OF FILING WITH A CONTRACT A CERTIFICATE OF THE CONTRACTOR AS TO THE DOMESTIC ORIGIN OF DELIVERIES THEREUNDER, WITHOUT A SHOWING THAT EACH DELIVERY AS ACTUALLY MADE CONFORMED WITH THE TERMS OF THE ACT OF MARCH 3, 1933, 47 STAT. 1520, IS NOT A COMPLIANCE WITH SAID ACT, AND MAY NOT BE APPROVED.

ACTING COMPTROLLER GENERAL ELLIOTT TO THE SECRETARY OF WAR, MAY 26, 1937:

THERE HAS BEEN RECEIVED YOUR LETTER OF MAY 14, 1937, AS FOLLOWS:

REFERENCE IS MADE TO SUBPARAGRAPH 6A, AR 5-340, DATED AUGUST 10, 1936, AS AMENDED BY SECTION I, PROCUREMENT CIRCULAR NO. 20, DATED OCTOBER 26, 1936, RELATIVE TO THE FURNISHING BY VENDORS OF CERTIFICATES IN REGARD TO DOMESTIC PRODUCTION WHEN SUPPLIES ARE PURCHASED IN THE OPEN MARKET OR UNDER CONTRACTS PROVIDING FOR DELIVERIES FROM TIME TO TIME ON CALL, SUCH SUBPARAGRAPH READING AS FOLLOWS:

"A. CERTIFICATE BY VENDOR IN OPEN-MARKET PURCHASES OR CALLS ON CONTRACTOR.--- WHEN SUPPLIES ARE PURCHASED IN THE OPEN MARKET OR UNDER CONTRACTS PROVIDING FOR DELIVERIES FROM TIME TO TIME ON CALL, A CERTIFICATE AS FOLLOWS MUST BE MADE BY THE VENDOR AND FILED WITH THE VOUCHER COVERING SUCH PURCHASE. THE CERTIFICATE MAY BE FURNISHED AS A SEPARATE DOCUMENT OR MAY BE PLACED ON THE INVOICE OR VOUCHER. (SEE PAR. 5B.) THIS CERTIFICATE NEED NOT BE FILED WITH THE VOUCHER IF SUCH A CERTIFICATE HAS BEEN SEPARATELY FURNISHED TO THE GENERAL ACCOUNTING OFFICE AS A PART OF THE PROCURING INSTRUMENT OR OTHERWISE.'

IN THIS CONNECTION, THERE IS INCLOSED COPY OF A LETTER FROM THE AUDIT DIVISION, GENERAL ACCOUNTING OFFICE, TO THE CHIEF OF FINANCE, DATED MAY 27, 1932, READING IN PART AS FOLLOWS:

"WHEN PURCHASES ARE UNDER CONTRACTS MADE BY THE WAR DEPARTMENT AND THERE HAS BEEN A SATISFACTORY SHOWING THAT THE ARTICLES TO BE FURNISHED THEREUNDER ARE OF DOMESTIC GROWTH, PRODUCTION OR MANUFACTURE, NO FURTHER SHOWING TO THAT EFFECT IS NECESSARY IN CONNECTION WITH VOUCHERS MAKING PAYMENTS THEREUNDER.'

THERE IS ALSO INCLOSED COPY OF CIRCULAR LETTER (FINANCE NO. 71, OFFICE, CHIEF OF ENGINEERS, DATED MAY 19, 1933, QUOTING A LETTER FROM THE GENERAL ACCOUNTING OFFICE, DATED MARCH 21, 1933, READING IN PART AS FOLLOWS:

"* * * IT SHOULD BE POINTED OUT FOR YOUR INFORMATION THAT A CERTIFICATE FROM THE PAYEE, REGARDING THE DOMESTIC GROWTH, PRODUCTION, OR MANUFACTURE OF THE ARTICLES FURNISHED, IS REQUIRED TO BE FILED WITH EACH INDIVIDUAL VOUCHER; FOR SUCH A CERTIFICATE, FILED WITH THE CONTRACT ALONE, AFFORDS NO ASSURANCE THAT THE ARTICLES ACTUALLY FURNISHED WERE OF DOMESTIC GROWTH, PRODUCTION, OR MANUFACTURE.'

IN VIEW OF THE FACT THAT THE REGULATIONS OF THE WAR DEPARTMENT REQUIRE EVERY BID TO BE ACCOMPANIED BY A CERTIFICATE OF DOMESTIC GROWTH, PRODUCTION, OR MANUFACTURE, AND SINCE A COPY OF ALL SUCH BIDS IS EITHER FURNISHED YOUR OFFICE WITH THE RESULTANT CONTRACT OR IS ATTACHED TO THE VOUCHER, IT WOULD APPEAR THAT A SEPARATE CERTIFICATE WOULD NOT BE NECESSARY EXCEPT IN THOSE CASES WHERE A CERTIFICATE HAS NOT ALREADY BEEN FURNISHED YOUR OFFICE. THEREFORE, YOUR APPROVAL OF THE EXISTING INSTRUCTIONS CONTAINED IN AR 5-340, AS AMENDED BY PROCUREMENT CIRCULAR NO. 20, WAR DEPARTMENT, 1936, IS REQUESTED.

IT IS A MANDATORY RESPONSIBILITY OF THE ADMINISTRATIVE OFFICERS TO COMPLY WITH THE TERMS OF THE ACT OF MARCH 3, 1933, 47 STAT. 1520, 1521, IN THE MAKING OF PURCHASES AS SUCH COMPLIANCE IS A CONDITION PRECEDENT TO CHARGING APPROPRIATED MONEYS WITH THE AMOUNT OF SUCH PURCHASES. NECESSARILY IT MUST BE SHOWN IN CONNECTION WITH THE AUDIT AND SETTLEMENT OF THE ACCOUNTS THAT THE PURCHASES WERE SO MADE AND THE RULE STATED IN GENERAL ACCOUNTING OFFICE LETTER OF MARCH 21, 1933, IS TO BE APPLIED RATHER THAN THE RULE STATED IN GENERAL ACCOUNTING OFFICE LETTER OF MAY 27, 1932, WHICH WAS BEFORE THE APPROVAL OF THE SAID ACT OF MARCH 3, 1933. OBVIOUSLY THE CONTRACTOR MIGHT FILE THE CERTIFICATE OR OTHER EVIDENCE WITH THE CONTRACT THAT HE INTENDED TO CONFORM TO THE TERMS OF THE ACT OF MARCH 3, 1933, IN THE PERFORMANCE OF THE CONTRACT, BUT THE ACTUAL DELIVERIES MADE MIGHT NOT BE IN ACCORDANCE WITH THE TERMS OF SAID ACT.

THERE HAS BEEN CONSIDERABLE CORRESPONDENCE BETWEEN THIS OFFICE AND VARIOUS VENDORS WITH RESPECT TO UNIFORM TERMS OF CERTIFICATES, AND IT APPEARS THAT MANY OF THE CONTRACTORS HAVE PREPARED RUBBER STAMP CERTIFICATES FOR USE ON INVOICES FOR PARTICULAR DELIVERIES UNDER CONTRACTS. THIS OFFICE PROPERLY MAY NOT APPROVE THE PROCEDURE STATED IN SUBPARAGRAPH 6A, AR 5-340, DATED AUGUST 10, 1936, AS AMENDED BY SECTION 1, PROCUREMENT CIRCULAR NO. 20, DATED OCTOBER 26, 1936, WHICH WOULD PERMIT THE FILING WITH THE CONTRACT OF A CERTIFICATE AS TO THE DOMESTIC ORIGIN OF DELIVERIES TO BE MADE UNDER THE CONTRACT WITHOUT A SHOWING THAT EACH DELIVERY AS ACTUALLY MADE THEREUNDER CONFORMED WITH THE TERMS OF SAID ACT.