A-56523, AUGUST 2, 1934, 14 COMP. GEN. 90

A-56523: Aug 2, 1934

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NOR A RECEIPT PURPORTING TO SHOW THAT THERE HAVE BEEN SET ASIDE IN THE CONTRACTOR'S OWN WAREHOUSE SUPPLIES AND SERVICES FOR FUTURE DELIVERY. AS FOLLOWS: THE CIVIL WORKS PROGRAM WAS. WITH THE EXCEPTION OF CERTAIN FEDERAL PROJECTS WHICH WERE CONTINUED UNTIL APRIL 28. ON WHICH DATE ALL CIVIL WORKS PROJECT ACTIVITIES WERE STOPPED. MANY OF THE WORK PROJECTS FORMERLY CARRIED ON BY THE CIVIL WORKS ADMINISTRATION WERE CONTINUED BY THE STATE EMERGENCY RELIEF ADMINISTRATIONS SUBSEQUENT TO MARCH 31 AND APRIL 28. IT WAS THEREFORE DETERMINED THAT IN ORDER TO RELIEVE THE SITUATION DELIVERIES WOULD BE ACCEPTED BY THE STATE CIVIL WORKS ADMINISTRATIONS UP TO AND INCLUDING MAY 31. THERE IS INCLOSED FOR YOUR INFORMATION IN THIS CONNECTION A COPY OF AN ORDER ISSUED BY THE FEDERAL ADMINISTRATOR UNDER DATE OF MAY 15.

A-56523, AUGUST 2, 1934, 14 COMP. GEN. 90

PAYMENTS - ADVANCES - FEDERAL CIVIL WORKS ADMINISTRATION NEITHER A BOND FOR THE FUTURE DELIVERY OF SUPPLIES, NOR A RECEIPT PURPORTING TO SHOW THAT THERE HAVE BEEN SET ASIDE IN THE CONTRACTOR'S OWN WAREHOUSE SUPPLIES AND SERVICES FOR FUTURE DELIVERY, CAN BE HELD TO CONSTITUTE DELIVERY WITHIN THE PURVIEW OF SECTION 3648, REVISED STATUTES, NOR TO AUTHORIZE PAYMENT FOR SUCH SUPPLIES PRIOR TO ACTUAL DELIVERY.

COMPTROLLER GENERAL MCCARL TO THE ADMINISTRATOR, FEDERAL CIVIL WORKS ADMINISTRATION, AUGUST 2, 1934:

THERE HAS BEEN RECEIVED YOUR LETTER OF JULY 6, 1934, AS FOLLOWS:

THE CIVIL WORKS PROGRAM WAS, AS YOU PROBABLY KNOW, TERMINATED MARCH 31,1934, WITH THE EXCEPTION OF CERTAIN FEDERAL PROJECTS WHICH WERE CONTINUED UNTIL APRIL 28, 1934, ON WHICH DATE ALL CIVIL WORKS PROJECT ACTIVITIES WERE STOPPED, WITH THE EXCEPTION OF ADMINISTRATIVE PROJECTS NECESSARY FOR THE PURPOSE OF PREPARATION, AUDIT, AND PAYMENT OF BILLS, AND CLEARING UP OF RECORDS. MANY OF THE WORK PROJECTS FORMERLY CARRIED ON BY THE CIVIL WORKS ADMINISTRATION WERE CONTINUED BY THE STATE EMERGENCY RELIEF ADMINISTRATIONS SUBSEQUENT TO MARCH 31 AND APRIL 28, 1934. THERE REMAINED UPON TERMINATION OF THE CIVIL WORKS PROJECT ACTIVITIES A LARGE NUMBER OF UNCOMPLETED CONTRACTS FOR SUPPLIES AND MATERIALS CONTRACTED FOR PRIOR TO THE RESPECTIVE DATES OF TERMINATION, AND BECAUSE OF THE RESTRICTIONS PLACED UPON MATERIAL PURCHASES FROM RELIEF FUNDS GRANTED THE STATES, THE STATE EMERGENCY RELIEF ADMINISTRATIONS COULD NOT TAKE DELIVERY OF THE UNCOMPLETED PORTIONS OF ALL SUCH CONTRACTS FOR CHARGING AGAINST RELIEF FUNDS.

IT WAS THEREFORE DETERMINED THAT IN ORDER TO RELIEVE THE SITUATION DELIVERIES WOULD BE ACCEPTED BY THE STATE CIVIL WORKS ADMINISTRATIONS UP TO AND INCLUDING MAY 31, 1934, FOR CHARGING TO CIVIL WORKS FUNDS BUT FOR ACTUAL USE OF THE SUPPLIES AND MATERIALS ON EMERGENCY RELIEF PROJECTS. THERE IS INCLOSED FOR YOUR INFORMATION IN THIS CONNECTION A COPY OF AN ORDER ISSUED BY THE FEDERAL ADMINISTRATOR UNDER DATE OF MAY 15, 1934, PERMITTING ACCEPTANCE OF DELIVERIES TO AND INCLUDING MAY 31ST, BUT NOT THEREAFTER FOR CHARGING TO CIVIL WORKS FUNDS.

IT HAS DEVELOPED IN A NUMBER OF CASES THAT THE STATE ADMINISTRATIONS COULD NOT TAKE DELIVERY OF THE UNCOMPLETED PORTIONS OF CONTRACTS BY MAY 31ST, SO IN ORDER TO FURNISH WHAT THEY CONSIDERED WAS SUBSTANTIAL COMPLIANCE WITH THE ORDER PERFORMANCE BONDS WERE ACCEPTED PRIOR TO MAY 31ST, INSURING DELIVERY AFTER THAT DATE.

THE QUESTION NOW ARISES AS TO WHETHER OR NOT PAYMENT MAY BE MADE ON VOUCHERS PRESENTED WHERE THE STATE ADMINISTRATION HOLDS SUCH A BOND IN LIEU OF ACTUAL DELIVERY OF SUPPLIES OR MATERIALS. THE ADMINISTRATIVE CERTIFICATION ON VOUCHER, STANDARD FORM 1034, INCLUDES THE STATEMENT "* * * AND DELIVERY PRIOR TO PAYMENT AS REQUIRED BY LAW.' THE QUESTION THEREFORE SUMS ITSELF UP INTO WHETHER OR NOT THE FURNISHING OF A BOND IN AN ADEQUATE AMOUNT GUARANTEEING FUTURE DELIVERY CONSTITUTES A SUFFICIENTLY SUBSTANTIAL COMPLIANCE WITH THE REQUIREMENT THAT DELIVERY BE MADE PRIOR TO PAYMENT, OR WHETHER ACTUAL PHYSICAL DELIVERY OF THE SUPPLIES OR MATERIALS CONTRACTED FOR MUST BE MADE PRIOR TO PAYMENT.

IN SOME CASES IT IS FOUND THAT ALTHOUGH ACTUAL PHYSICAL DELIVERY TO THE CIVIL WORKS ADMINISTRATION WAS NOT MADE PRIOR TO THE DEAD LINE OF MAY 31ST, SUPPLIES AND SERVICES HAVE BEEN SET ASIDE IN THE CONTRACTOR'S WAREHOUSE AND A WAREHOUSE RECEIPT FURNISHED AS THE BASIS OF PAYMENT FOR THE VENDOR'S INVOICE. THIS QUESTION RESOLVES ITSELF INTO WHETHER OR NOT PAYMENT MAY BE MADE ON THE BASIS OF SUCH A WAREHOUSE RECEIPT IN LIEU OF ACTUAL PHYSICAL DELIVERY OF THE SUPPLIES OR MATERIALS TO THE CIVIL WORKS ADMINISTRATION.

IN CONNECTION WITH BOTH OF THE QUESTIONS HERE PRESENTED IT MAY BE STATED FOR YOUR INFORMATION THAT PRACTICALLY ALL OF THE CONTRACTS INVOLVED CALL FOR DELIVERY BY THE CONTRACTOR AT POINT OF DESTINATION.

IT WILL BE APPRECIATED IF YOU WILL LET ME HAVE A DECISION AS TO WHETHER OR NOT PAYMENT MAY BE MADE ON VOUCHERS SUPPORTED BY PERFORMANCE BONDS OR WAREHOUSE RECEIPTS, AS DISCUSSED HEREIN, WITH THE UNDERSTANDING THAT ACTUAL PHYSICAL DELIVERY OF THE SUPPLIES AND MATERIALS INTO THE HANDS OF THE CIVIL WORKS ADMINISTRATION HAS NOT BEEN MADE AT THE TIME THE VOUCHERS ARE PRESENTED FOR PAYMENT.

SECTION 3648, REVISED STATUTES, PROVIDES:

NO ADVANCE OF PUBLIC MONEY SHALL BE MADE IN ANY CASE WHATEVER. AND IN ALL CASES OF CONTRACTS FOR THE PERFORMANCE OF ANY SERVICE, OR THE DELIVERY OF ARTICLES OF ANY DESCRIPTION, FOR THE USE OF THE UNITED STATES, PAYMENT SHALL NOT EXCEED THE VALUE OF THE SERVICE RENDERED, OR OF THE ARTICLES DELIVERED PREVIOUSLY TO SUCH PAYMENT. * * *

NEITHER A BOND FOR THE FUTURE DELIVERY OF SUPPLIES NOR A RECEIPT PURPORTING TO SHOW THERE HAVE BEEN SET ASIDE IN THE CONTRACTOR'S OWN WAREHOUSE "SUPPLIES AND SERVICES" FOR FUTURE DELIVERY, CAN BE HELD TO CONSTITUTE DELIVERY WITHIN THE PURVIEW OF SECTION 3648, REVISED STATUTES. HENCE, NEITHER SUCH BOND NOR RECEIPT MAY BE ACCEPTED IN LIEU OF ACTUAL DELIVERY AS A BASIS FOR PAYMENT.