A-51368, OCTOBER 23, 1933, 13 COMP. GEN. 115

A-51368: Oct 23, 1933

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AMENDED - COURT REPORTERS - NOTARIES PUBLIC WHERE AUTHORITY EXISTS FOR OBTAINING REPORTING SERVICES BY CONTRACT AND THEY ARE SO OBTAINED AFTER ADVERTISING AND AWARD TO THE LOWEST QUALIFIED BIDDER. THE CONSIDERATION FOR THE CONTRACT IS NOT SUBJECT TO ANY PERCENTAGE REDUCTION UNDER THE ECONOMY ACT. STENOGRAPHIC SERVICES PERFORMED PERSONALLY BY NOTARIES PUBLIC DESIGNATED TO TAKE DEPOSITIONS CONSTITUTE SERVICES IN OR UNDER A BRANCH OF THE GOVERNMENT SERVICE AND THE COMPENSATION FOR SUCH SERVICES IS SUBJECT TO THE PERCENTAGE REDUCTION UNDER THE ECONOMY ACT. AS FOLLOWS: REFERENCE IS MADE TO NOTICE OF EXCEPTION. THE FOLLOWING LANGUAGE WAS USED: "IT WAS HELD IN A-50120. THAT WHERE A REPORTER PERSONALLY PERFORMS THE SERVICE FOR WHICH PAYMENT IS MADE.

A-51368, OCTOBER 23, 1933, 13 COMP. GEN. 115

ECONOMY ACT, AMENDED - COURT REPORTERS - NOTARIES PUBLIC WHERE AUTHORITY EXISTS FOR OBTAINING REPORTING SERVICES BY CONTRACT AND THEY ARE SO OBTAINED AFTER ADVERTISING AND AWARD TO THE LOWEST QUALIFIED BIDDER, THE CONSIDERATION FOR THE CONTRACT IS NOT SUBJECT TO ANY PERCENTAGE REDUCTION UNDER THE ECONOMY ACT. STENOGRAPHIC SERVICES PERFORMED PERSONALLY BY NOTARIES PUBLIC DESIGNATED TO TAKE DEPOSITIONS CONSTITUTE SERVICES IN OR UNDER A BRANCH OF THE GOVERNMENT SERVICE AND THE COMPENSATION FOR SUCH SERVICES IS SUBJECT TO THE PERCENTAGE REDUCTION UNDER THE ECONOMY ACT, BUT STENOGRAPHIC SERVICES HIRED BY A NOTARY PUBLIC CONSTITUTE REIMBURSABLE EXPENSES AND OFFICIAL CHARGES FOR ADMINISTERING OATHS AND AFFIXING OFFICIAL NOTARY SEAL.

COMPTROLLER GENERAL MCCARL TO THE ATTORNEY GENERAL, OCTOBER 23, 1933:

THERE HAS BEEN RECEIVED YOUR LETTER OF OCTOBER 4, 1933, AS FOLLOWS:

REFERENCE IS MADE TO NOTICE OF EXCEPTION, FORM 2084, DATED SEPTEMBER 12, 1933, DISALLOWING $4 OF A $48.00 PAYMENT TO BERNARD A. CARLIN, COURT REPORTER, ON VOUCHER 591, DECEMBER QUARTER, 1932, ACCOUNT OF J. A. STAFFORD, U.S. MARSHAL, MOBILE, ALA., (SYMBOL 31396).

THIS OFFICE INTERPOSES NO OBJECTION TO THE ACTION OF THE AUDIT DIVISION RESPECTING THE DISALLOWANCE IN POINT. HOWEVER, IN MAKING THE DISALLOWANCE, THE FOLLOWING LANGUAGE WAS USED:

"IT WAS HELD IN A-50120, AUG. 14, 1933, THAT JUSTICE CIRCULAR NO. 2372, DATED MARCH 29, 1933, IN EXEMPTING CONTRACT COURT REPORTERS FROM PERCENTAGE DEDUCTION IN COMPENSATION, FAILED TO DISTINGUISH BETWEEN THE DIFFERENT CLASSES OF COURT REPORTING; AND THAT WHERE A REPORTER PERSONALLY PERFORMS THE SERVICE FOR WHICH PAYMENT IS MADE, WHETHER UNDER FORMAL CONTRACT OR OTHERWISE, THE PAYMENT IS SUBJECT TO PERCENTAGE DEDUCTION.'

THE SENTENCE IN DEPARTMENT CIRCULAR 2372 THAT "EXPERT WITNESSES AND CONTRACT COURT REPORTERS ARE EXEMPT FROM THE PERCENTAGE REDUCTION IN COMPENSATION" WAS BASED UPON YOUR DECISION OF SEPTEMBER 2, 1932, 12 C.G. 322, WHEREIN IT IS HELD, QUOTING IN PART:

"WHERE THE SERVICE PERFORMED UNDER A CONTRACT IS SUCH THAT IT MAY BE COVERED BY SPECIFICATIONS AND THE CONTRACT THEREFOR AWARDED EITHER TO AN INDIVIDUAL, A FIRM, OR A CORPORATION, THERE IS NOT INVOLVED THE RENDERING OF SERVICES OF ANY PERSON IN OR UNDER ANY BRANCH OR SERVICE OF THE GOVERNMENT WITHIN THE MEANING OF THE DEFINITION OF THE TERMS "OFFICER" AND "EMPLOYEE" IN SECTION 104 OF THE ECONOMY ACT, AND THE CONTRACT PAYMENTS TO THE HOLDER OF SUCH A CONTRACT, WHETHER A CORPORATION, A FIRM, OR AN INDIVIDUAL, ARE NOT SUBJECT TO PERCENTAGE OR OTHER REDUCTIONS UNDER THE PROVISIONS OF TITLE I OF THE ECONOMY ACT. AS THE CONTRACTS FOR COURT- REPORTING SERVICE MAY BE COVERED BY SPECIFICATIONS, SUBMITTED TO COMPETITION, AND AWARDED EITHER TO AN INDIVIDUAL, A FIRM, OR A CORPORATION, THE RULE ABOVE STATED IS APPLICABLE, AND, ACCORDINGLY, THE CONTRACT PAYMENTS ARE NOT SUBJECT TO REDUCTIONS UNDER THE PROVISIONS OF TITLE I OF THE ECONOMY ACT.'

THE DECISION OF AUGUST 14, 1933, A-50120, RELIED UPON BY THE AUDIT DIVISION, STATES IN PART:

"WHERE A REPORTER PERSONALLY PERFORMS THE SERVICE FOR WHICH HE IS HIRED HE PERFORMS SERVICES ,IN OR UNDER" A BRANCH OF THE GOVERNMENT OF THE UNITED STATES AND HIS COMPENSATION IS SUBJECT TO THE REDUCTIONS REQUIRED BY THE ECONOMY ACT OF JUNE 30, 1932, FOR THE PERIOD JULY 1, 1932, TO APRIL 1, 1933, OR BY THE ACT OF MARCH 20, 1933, THEREAFTER. WHERE, HOWEVER, THE REPORTING SERVICES ARE CONTRACTED FOR AND ARE NOT PERFORMED BY THE CONTRACTOR IN PERSON BUT BY SUCH PERSONS AS HE MAY SELECT AND HIRE FOR THAT PURPOSE, THE MATTER IS CONTRACTUAL AND THE CONSIDERATION FOR THE CONTRACT IS NOT SUBJECT TO REDUCTION. A-48740, JUNE 3, 1933, AND A-48944, JULY 1, 1933.'

THE DECISION OF JUNE 3, 1933, A-48740, RELATES TO REPORTERS IN CASES BEFORE THE COURT OF CLAIMS WHOSE SERVICES ARE NOT SECURED AFTER PREPARATION OF SPECIFICATIONS, ADVERTISEMENT, AND AWARD OF CONTRACT. SEEMS THAT THE COURT-MARTIAL REPORTERS, INVOLVED IN THE DECISION OF JULY 1, 1933, A-48944, WERE HIRED OR SELECTED WITHOUT REGARD TO SPECIFICATIONS, ADVERTISEMENT, OR AWARD OF FORMAL CONTRACT. IT IS NOT BELIEVED EITHER DECISION DEFINITELY REVERSES THE EARLIER DECISION OF SEPTEMBER 2, 1932, 12 C.G. 322, WHEREIN YOU SPECIFICALLY HELD THAT THE COMPENSATION OF THE HOLDER OF SUCH A CONTRACT, EVEN AS AN "INDIVIDUAL," IS NOT SUBJECT TO THE DEDUCTION; NOR THAT THE DECISION OF AUGUST 14, 1933, A-50120, JUSTIFIES THE BROAD LANGUAGE USED BY THE AUDIT DIVISION IN THE NOTICE OF EXCEPTION.

I. IN VIEW OF THE CONSTRUCTION PLACED UPON YOUR LATEST DECISION, BY THE AUDIT DIVISION, KINDLY ADVISE (A) AS TO WHETHER DEDUCTIONS ARE REQUIRED TO BE MADE FROM PAYMENTS TO INDIVIDUAL REPORTERS, WHO PERSONALLY DO THE REPORTING, UNDER FORMAL CONTRACTS AWARDED TO THE LOWEST BIDDER AS THE RESULT OF ADVERTISED SPECIFICATIONS. PLEASE REFER TO CONTRACTS J-9435, WITH E. W. POWERS; J-9486, A. O. RAY; AND J 9575, NORBERT O-LEARY. SHOULD BE NOTED THAT CONTRACT J-8615 WITH C. R. TRIAY, REFERRED TO IN THE SUBMISSION RESULTING IN YOUR DECISION OF SEPTEMBER 2, 1932, WAS WITH AN INDIVIDUAL AND WAS PURPOSELY INCLUDED ON ACCOUNT OF THE PERSONAL-SERVICE FEATURE.

(B) IF YOUR REPLY IS IN THE AFFIRMATIVE, WHAT DEDUCTIONS, IF ANY, MUST BE MADE FROM PAYMENTS WHERE THE REPORTER IS OBLIGED TO SECURE THE SERVICES OF ADDITIONAL REPORTERS IN ORDER TO FURNISH COPY (AS IN DAILY COPY CASES), AND THE GOVERNMENT PAYS A SECOND PER DIEM TO THE CONTRACT HOLDER, FOR EACH ADDITIONAL REPORTER, IT BEING UNDERSTOOD THAT THE CONTRACTOR PERFORMS PART OF THE WORK PERSONALLY; SEE CONTRACT J-9577, WITH GEORGE A. BAILEY. THIS CONNECTION SEE THE DECISION OF AUGUST 28, 1933, A-50459, WHEREIN IT IS STATED "IF THE SERVICES ARE RENDERED BY PERSONS SELECTED AND EMPLOYED BY THE CONTRACTOR, THE CONSIDERATION FIXED IN THE CONTRACT IS NOT SUBJECT TO ANY REDUCTION UNDER THE ECONOMY ACT.'

II. THE DEPARTMENT IS ADVISED THAT THE AUDIT DIVISION, SUBSEQUENT TO YOUR DECISION OF AUG. 28, 1933, A-50459, HAS BEEN QUESTIONING PAYMENTS MADE TO NOTARIES PUBLIC FOR SERVICES IN CONNECTION WITH THE TAKING OF DEPOSITIONS, THE PAYMENTS BEING FOR STRICTLY NOTARIAL SERVICES AT FEES OR RATES FIXED BY STATE STATUTES. THERE ARE THOUSANDS OF WAR RISK INSURANCE CASES PENDING, AND DEPOSITIONS ARE TAKEN IN PRACTICALLY ALL OF THEM. PLEASE ADVISE WHETHER THE FEES OF THE NOTARIES PUBLIC ARE SUBJECT TO THE DEDUCTION UNDER THE ECONOMY ACT.

III. REFERENCE IS AGAIN MADE TO THE DECISION OF AUGUST 28, 1933, A 50459, AND TO 11 COMP. GEN. 428. ASSUMING THAT THE NOTARY PUBLIC RENDERS THE STENOGRAPHIC SERVICE PERSONALLY, I.E., SERVES IN THE DUAL CAPACITY OF NOTARY PUBLIC AND AS STENOGRAPHER, IS ANY DEDUCTION REQUIRED UNDER THE ECONOMY ACT?

IN A RECENT DECISION OF OCTOBER 11, 1933, TO THE SECRETARY OF THE DECISION IN 12 COMP. GEN. 322, IT WAS STATED:

HOWEVER, WHERE A PARTICULAR REPORTER IS DESIGNATED OR OTHERWISE ENGAGED ON A PERSONAL-SERVICE BASIS FOR AN INDEFINITE PERIOD AT SO MUCH PER DAY OR SO MUCH PER FOLIO, ETC., TO PERFORM ALL THE REPORTING SERVICES THAT MAY BE REQUIRED AT A GIVEN PLACE, THE COMPENSATION OR FEES HAVING BEEN FIXED UNDER SOME LAW, SCHEDULE, REGULATION, EXECUTIVE ORDER, OR DEPARTMENTAL ORDER IN FORCE PRIOR TO APRIL 1, 1933, THEN SUCH INDIVIDUAL IS TO BE REGARDED AS AN OFFICER OR EMPLOYEE OF THE GOVERNMENT AND HIS COMPENSATION IS SUBJECT TO THE 15 PERCENT REDUCTION. BUT UNDER THE ABOVE RULE QUOTED FROM THE DECISION OF SEPTEMBER 2, 1932, WHERE THERE IS STATUTORY AUTHORITY TO ENGAGE REPORTING SERVICES BY CONTRACT AND THE SERVICES ARE SO ENGAGED IN ACCORDANCE WITH THE LAWS RELATING TO SUCH CONTRACTS, THE FACT THAT THE CONTRACT MAY BE AWARDED TO AN INDIVIDUAL WHO DOES ALL THE REPORTING HIMSELF DOES NOT NECESSARILY MAKE SUCH INDIVIDUAL AN OFFICER OR EMPLOYEE OF THE GOVERNMENT NOR THE COMPENSATION SUBJECT TO THE 15 PERCENT REDUCTION.

REGARDING THE FURNISHING OF MATERIAL AND EQUIPMENT BY A STENOGRAPHIC REPORTER, IT MAY BE STATED THAT WHILE THE MERE FACT THAT AN EMPLOYEE MAY FURNISH SOME MATERIAL OR EQUIPMENT WOULD NOT NECESSARILY EXEMPT HIS COMPENSATION FROM THE 15-PERCENT REDUCTION, THE FACT AS TO WHAT A REPORTER IS REQUIRED TO FURNISH IN ADDITION TO HIS SERVICES IS FOR CONSIDERATION IN DETERMINING WHETHER THE ARRANGEMENT IN A GIVEN CASE--- WHERE THE ENGAGING OF REPORTING SERVICES BY CONTRACT IS AUTHORIZED--- CONSTITUTED AN EMPLOYMENT OR A CONTRACT. THE MERE FACT THAT THE ENGAGING OF A REPORTER'S SERVICES MAY BE EVIDENCED BY A FORM OF CONTRACT RATHER THAN BY A LETTER OR NOTICE OF APPOINTMENT IS NOT DETERMINATIVE OF THE QUESTION AS TO WHETHER THE REPORTER IS OR IS NOT AN OFFICER OR EMPLOYEE.

CONTRACTS J-8615 WITH C. R. TRIAY, J-9435 WITH E. W. POWERS, J-9486 WITH A. O. RAY, AND J-9575 WITH NORBERT O-LEARY ALL APPEAR TO HAVE BEEN AWARDED TO THE LOWEST QUALIFIED BIDDER AFTER ADVERTISING BY CIRCULAR LETTERS SENT TO THREE OR MORE REPORTERS, AND THERE APPEARS TO BE AUTHORITY OF LAW FOR YOUR DEPARTMENT TO OBTAIN SUCH REPORTING BY CONTRACT. THESE CONTRACTS THEREFORE COME WITHIN THE RULE ANNOUNCED IN 12 COMP. GEN. 322, AND THE DECISION OF OCTOBER 11, 1933, SUPRA, AND THE COMPENSATION PAID THEREUNDER WILL NOT BE SUBJECT TO PERCENTAGE REDUCTION UNDER THE ECONOMY ACTS.

WITH RESPECT TO PAYMENTS TO NOTARIES PUBLIC FOR TAKING DEPOSITIONS, THIS OFFICE HAS DISALLOWED CREDIT FOR THE AMOUNT OF THE PERCENTAGE REDUCTION REQUIRED UNDER THE ECONOMY ACTS INSOFAR AS IT WAS NOT DEDUCTED FROM PAYMENTS FOR STENOGRAPHIC SERVICES RENDERED BY SUCH OFFICERS PERSONALLY IN TRANSCRIBING DEPOSITIONS. AS TO SUCH SERVICES THE SAME RULES ARE FOR APPLICATION AS APPLY TO COURT REPORTERS, BUT IT WOULD SEEM THAT SERVICES ACCORDINGLY, IF THEY PERSONALLY PERFORM THE STENOGRAPHIC SERVICE THEY ARE FOR THAT PURPOSE CONSIDERED AS RENDERING SERVICE IN OR UNDER A BRANCH OF THE GOVERNMENT SERVICE AND SUCH COMPENSATION IS ACCORDINGLY SUBJECT TO THE PERCENTAGE REDUCTIONS UNDER THE ECONOMY ACTS. HOWEVER, IF IT SHOULD BECOME NECESSARY FOR A NOTARY PUBLIC TO HIRE A STENOGRAPHER, THE COST OF THE STENOGRAPHIC SERVICE BECOMES A REIMBURSABLE EXPENSE AND NOT COMPENSATION FOR SERVICE OF THE NOTARY PUBLIC, AND IS NOT SUBJECT TO REDUCTION, 12 COMP. GEN. 111. THE FEES CHARGED BY A NOTARY PUBLIC FOR ADMINISTERING OATHS AND AFFIXING OFFICIAL SEALS, ETC., BEING PERFORMED UNDER HIS COMMISSION AS NOTARY PUBLIC, ARE NOT SUBJECT TO A PERCENTAGE REDUCTION UNDER THE ECONOMY ACTS.