A-71634, MARCH 16, 1936, 15 COMP. GEN. 811

A-71634: Mar 16, 1936

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MOTOR VEHICLES - EXCHANGE OR TRADE-IN OF OLD ENGINES FOR RECONDITIONED ENGINES THERE IS NO OBJECTION TO THE PROCEDURE PROPOSED BY THE NATIONAL PARK SERVICE WITH RESPECT TO THE EXCHANGE OR TRADE-IN OF OLD MOTOR-VEHICLE ENGINES FOR RECONDITIONED ONES INVOLVING FUNDS APPROPRIATED UNDER THE EMERGENCY RELIEF APPROPRIATION ACT OF 1935. AS FOLLOWS: YOUR DECISION IS REQUESTED AS TO THE LEGALITY OF THE METHOD PROPOSED BY THE NATIONAL PARK SERVICE. COPIES OF THE FOLLOWING LETTERS ARE FORWARDED HEREWITH: (A) LETTER OF JANUARY 8. IT WOULD BE APPRECIATED IF YOUR DECISION IN THIS MATTER WERE EXPEDITED AS IT IS DESIRED TO INSTITUTE PROCUREMENT OF RECONDITIONED ENGINES AS SOON AS POSSIBLE. IT APPEARS THE PROPOSED PROCEDURE STATED IN YOUR INCLOSURE A WAS SUBSEQUENTLY AMENDED IN THE LETTER OF FEBRUARY 21.

A-71634, MARCH 16, 1936, 15 COMP. GEN. 811

MOTOR VEHICLES - EXCHANGE OR TRADE-IN OF OLD ENGINES FOR RECONDITIONED ENGINES THERE IS NO OBJECTION TO THE PROCEDURE PROPOSED BY THE NATIONAL PARK SERVICE WITH RESPECT TO THE EXCHANGE OR TRADE-IN OF OLD MOTOR-VEHICLE ENGINES FOR RECONDITIONED ONES INVOLVING FUNDS APPROPRIATED UNDER THE EMERGENCY RELIEF APPROPRIATION ACT OF 1935, THE PROCEDURE PROVIDING FOR THE SECURING OF BIDS FOR THE SEPARATE SALE OF THE OLD ENGINES IN ADDITION TO THE BIDS PROPOSING TRADE-IN ALLOWANCE, THE BID RESULTING IN THE LOWEST NET COST TO THE GOVERNMENT TO BE ACCEPTED, AND PROVIDING FURTHER FOR THE COVERING INTO THE TREASURY AS MISCELLANEOUS RECEIPTS THE AMOUNT RECEIVED FOR THE OLD ENGINES, WHETHER ON SEPARATE SALE OR AS A TRADE-IN ALLOWANCE, THE PURCHASE ORDER TO SHOW THE GROSS COST OF THE RECONDITIONED ENGINES TOGETHER WITH THE TRADE-IN ALLOWANCE.

ACTING COMPTROLLER GENERAL ELLIOTT TO THE DIRECTOR, EMERGENCY CONSERVATION WORK, MARCH 16, 1936:

THERE HAS BEEN RECEIVED YOUR LETTER OF FEBRUARY 26, 1936, AS FOLLOWS:

YOUR DECISION IS REQUESTED AS TO THE LEGALITY OF THE METHOD PROPOSED BY THE NATIONAL PARK SERVICE, DEPARTMENT OF THE INTERIOR, FOR TRADING IN OLD FORD MOTORS FOR FACTORY-RECONDITIONED MOTORS, THE PROCEDURE PROPOSED APPEARING IN INCLOSURE MARKED "A," ATTACHED.

FOR YOUR INFORMATION IN CONNECTION WITH THIS MATTER, COPIES OF THE FOLLOWING LETTERS ARE FORWARDED HEREWITH:

(A) LETTER OF JANUARY 8, 1936, FROM THE NATIONAL PARK SERVICE TO THE CHIEF OF FINANCE, WAR DEPARTMENT, WASHINGTON, D.C.

(B) LETTER OF FEBRUARY 4, 1936 (F.A.A. 112.5/9622 C.C.C. INTERIOR) FROM THE CHIEF OF FINANCE, WAR DEPARTMENT, TO THE NATIONAL PARK SERVICE.

(C) LETTER OF FEBRUARY 21, 1936, FROM THE NATIONAL PARK SERVICE TO THE ASSISTANT DIRECTOR, EMERGENCY CONSERVATION WORK.

IT WOULD BE APPRECIATED IF YOUR DECISION IN THIS MATTER WERE EXPEDITED AS IT IS DESIRED TO INSTITUTE PROCUREMENT OF RECONDITIONED ENGINES AS SOON AS POSSIBLE.

IT APPEARS THE PROPOSED PROCEDURE STATED IN YOUR INCLOSURE A WAS SUBSEQUENTLY AMENDED IN THE LETTER OF FEBRUARY 21, 1936, FROM THE NATIONAL PARK SERVICE TO THE ASSISTANT DIRECTOR, EMERGENCY CONSERVATION WORK, YOUR INCLOSURE C, AND IT IS ASSUMED THAT DECISION IS DESIRED ON THE LATTER PROPOSAL. THE SAID LETTER OF FEBRUARY 21, 1936, IS AS FOLLOWS:

IT IS DESIRED TO PROCURE RECONDITIONED ENGINES FOR CERTAIN E.C.W. MOTOR VEHICLES IN THE CUSTODY OF THIS SERVICE BY OBLIGATING FUNDS APPROPRIATED UNDER THE EMERGENCY RELIEF APPROPRIATION ACT OF 1935. AS A GUIDE FOR OUR PROCUREMENT OFFICERS, IT IS PROPOSED THAT INSTRUCTIONS BE ISSUED AS FOLLOWS:

"WHERE IT IS DETERMINED THAT A RECONDITIONED ENGINE IS NEEDED TO REPLACE A SIMILAR ENGINE IN ORDER TO PROLONG THE USEFULNESS OF THE VEHICLE, INVITATIONS TO BID SHOULD BE ISSUED IN ACCORDANCE WITH THE USUAL CONTRACT PROCEDURE OF THIS SERVICE.

"THE INVITATIONS SHOULD ALSO ASK THE BIDDER TO STATE WHAT TRADE-IN ALLOWANCE WILL BE MADE FOR THE OLD ENGINE. AT THE SAME TIME, SEPARATE BIDS SHOULD BE INVITED FOR THE SALE OF THE OLD ENGINE. THE BID OR BIDS RESULTING IN THE LOWEST NET COST TO THE GOVERNMENT SHOULD BE ACCEPTED.

"ON THE ENCUMBRANCE RECORDS OF THE PROCUREMENT OFFICER THERE SHOULD BE DEBITED AN AMOUNT EQUIVALENT TO THE COST OF THE RECONDITIONED ENGINE.

"IF THE OLD ENGINE IS SOLD FOR CASH, THE AMOUNT COLLECTED WILL BE FORWARDED TO THE WASHINGTON OFFICE TO BE COVERED INTO THE TREASURY AS MISCELLANEOUS RECEIPTS.

"IF THE BID GRANTING A TRADE-IN ALLOWANCE FOR THE OLD ENGINE HAS BEEN ACCEPTED AS BEING MOST ADVANTAGEOUS TO THE GOVERNMENT, UPON FORWARDING COPIES OF THE PURCHASE ORDER TO THE ARMY FINANCE OFFICER, REFERENCE SHOULD BE MADE TO THE CONTRACT AND THE FINANCE OFFICER SHOULD BE REQUESTED TO DEBIT THE APPROPRIATION INVOLVED WITH AN AMOUNT EQUIVALENT TO THE COST OF THE RECONDITIONED ENGINE AND TO PROCEED TO HAVE COVERED INTO THE TREASURY AS MISCELLANEOUS RECEIPTS, A CREDIT EQUIVALENT TO THE AMOUNT OF THE TRADE- IN ALLOWANCE. THE FINANCE OFFICER SHOULD BE REQUESTED TO SHOW THIS PROCEDURE ON THE VOUCHER WHEREON PAYMENT IS MADE FOR THE RECONDITIONED ENGINE.'

CORRESPONDENCE BETWEEN THIS OFFICE AND THE OFFICE OF THE CHIEF OF FINANCE, WAR DEPARTMENT, WHEREIN THE ACTING CHIEF OF FINANCE HAS SUGGESTED THAT THE MATTER BE SUBMITTED TO THE COMPTROLLER GENERAL FOR A CLARIFYING DECISION IS ENCLOSED FOR YOUR INFORMATION.

INASMUCH AS ANY DECISION ON THE SUBJECT WILL AFFECT THE ENTIRE E.C.W. ORGANIZATION, THE MATTER IS REFERRED TO YOU. IT IS REQUESTED THAT EFFORT BE MADE TO OBTAIN AN EARLY DECISION FROM THE COMPTROLLER GENERAL.

IN DECISION OF APRIL 26, 1935, 14 COMP. GEN. 796, IT WAS SAID RELATIVE TO THE PURCHASE AND EXCHANGE OF RECONDITIONED ENGINES FOR MOTOR VEHICLES:

IT WOULD SEEM CLEAR THAT WHERE THE APPROPRIATION PROVIDES FOR THE PURCHASE, MAINTENANCE, AND REPAIR OF MOTOR VEHICLES, THERE WOULD BE NO OBJECTION TO THE PURCHASE THEREUNDER OF RECONDITIONED ENGINES WHERE IT IS ADMINISTRATIVELY DETERMINED THAT SUCH ENGINES ARE NEEDED TO REPLACE SIMILAR ENGINES IN MOTOR VEHICLES IN ORDER TO PROLONG THE USEFULNESS OF SUCH VEHICLE AND WHERE IT IS IN THE INTERESTS OF THE UNITED STATES AND WHERE THE ENGINE IS TO BE USED IN THE CLASS OF VEHICLE--- THAT IS, PASSENGER CARRYING OR TRUCK--- THE PURCHASE, MAINTENANCE, AND REPAIR OF WHICH ARE PROVIDED FOR IN THE APPROPRIATION. AND ASSUMING ALSO THAT SUCH PURCHASE AND EXCHANGE ARE MADE AFTER ADVERTISING FOR COMPETITIVE BIDS.

AS TO THE TRADE-IN OF A USED ENGINE, IT MAY BE SAID THAT WHILE THE APPROPRIATION ACTS WHICH PROVIDE FOR THE PURCHASE AND EXCHANGE OF MOTOR VEHICLES DO NOT EXPRESSLY PROVIDE FOR THE EXCHANGE OF A PART OF A MOTOR VEHICLE, IT WOULD APPEAR THAT THE EXCHANGE OF A USED ENGINE IN NEED OF REPAIRS IN PART PAYMENT FOR A RECONDITIONED ENGINE OF A SIMILAR TYPE TO REPLACE SUCH USED ENGINE WOULD NOT CONTRAVENE THE APPROPRIATION WHERE SUCH EXCHANGE IS IN THE INTERESTS OF THE UNITED STATES. NO OBJECTION WILL BE RAISED BY THIS OFFICE TO SUCH A COURSE WHERE THE APPROPRIATION PROVIDES FOR THE PURCHASE AND EXCHANGE OF MOTOR VEHICLES WHERE THE VEHICLES ARE OF THE CLASS DESIGNATED IN THE APPROPRIATION; WHERE THE USED ENGINE IS IN NEED OF OVERHAULING AND REPAIRS; AND WHERE THE EXCHANGE APPEARS TO BE IN THE INTERESTS OF THE UNITED STATES, UNLESS, HOWEVER, THE APPROPRIATION AUTHORIZES THE EXCHANGE IN THE PURCHASE OF A NEW VEHICLE ONLY. HOWEVER, IN VIEW OF THE TERMS OF SECTION 3 (C) OF THE ACT OF MARCH 15, 1934, 48 STAT. 450, THERE SHOULD BE DEBITED TO THE APPROPRIATION INVOLVED AND CREDITED AS MISCELLANEOUS RECEIPTS AN AMOUNT EQUIVALENT TO THE SALES VALUE OF THE ENGINE USED AS A TRADE-IN ALLOWANCE FOR THE ENGINE REPLACED IN THE FORD TRUCK OR OTHER VEHICLE AND THIS SHOULD BE SHOWN ON THE VOUCHER WHEREON PAYMENT IS MADE FOR THE RECONDITIONED ENGINE.

WITH RESPECT TO THE EXCHANGE OR TRADE-IN OF OLD ENGINES FOR RECONDITIONED ENGINES, AS THE PROPOSED INSTRUCTIONS CLEARLY PROVIDE FOR SECURING BIDS FOR THE SEPARATE SALE OF THE OLD ENGINES IN ADDITION TO THE BIDS PROPOSING TRADE-IN ALLOWANCES, THE BID OR BIDS RESULTING IN THE LOWEST NET COST TO THE GOVERNMENT TO BE ACCEPTED, AND AS SUCH INSTRUCTIONS PROVIDE, ALSO, THAT THE AMOUNT RECEIVED FOR THE OLD ENGINES, WHETHER ON A SEPARATE SALE OR AS A TRADE-IN ALLOWANCE, SHALL BE CREDITED AS MISCELLANEOUS RECEIPTS, IT MAY BE VIEWED THAT ANY TRADE IN TRANSACTION UNDER SUCH CONDITIONS WOULD BE, IN EFFECT, THE SALE OF AN OLD ENGINE AND THE PURCHASE OF A RECONDITIONED ENGINE, RATHER THAN THE EXCHANGE OF EQUIPMENT. ON THIS BASIS, NO OBJECTION IS PERCEIVED TO THE PROPOSED PROCEDURE. SEE 3 COMP. GEN. 304; 5 ID. 798; 7 ID. 230. HOWEVER, THE LAST PARAGRAPH OF THE INSTRUCTIONS SHOULD BE AMENDED TO PROVIDE THAT IN ADDITION TO THE PROCURING OFFICER REFERRING TO THE CONTRACT AND REQUESTING THE FINANCE OFFICER TO DEBIT THE APPROPRIATION WITH THE AMOUNT OF THE TRADE-IN ALLOWANCE, TO BE COVERED INTO THE TREASURY AS MISCELLANEOUS RECEIPTS, THE PURCHASE ORDER ITSELF SHALL SHOW THE GROSS COST OF THE RECONDITIONED ENGINE, TOGETHER WITH THE AMOUNT OF TRADE-IN ALLOWANCE TO BE DEDUCTED THEREFROM FOR CREDITING AS MISCELLANEOUS RECEIPTS.