A-80062, DECEMBER 5, 1936, 16 COMP. GEN. 553

A-80062: Dec 5, 1936

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WOULD REQUIRE THE FURNISHING OF THE STIPULATED SERVICES AT ALL STATIONS OPERATED BY IT AT THE TIME SUCH SERVICES ARE REQUIRED. THE CONTRACTOR IS NOT LIABLE FOR ANY EXCESS COST OF GASOLINE AND OIL OTHERWISE PROCURED BY THE UNITED STATES BECAUSE THE CONTRACTOR HAS DISPOSED OF A PART OR ALL OF ITS SERVICE STATIONS WITHOUT MAKING PROVISION FOR THE FURNISHING OF THE CONTRACT SERVICE ELSEWHERE. THE PRACTICE OF GOVERNMENT OFFICERS AND EMPLOYEES OBTAINING GASOLINE AND OIL ON CREDIT OR COURTESY CARDS IS SO OBVIOUSLY OPEN TO GRAVE ABUSE. ESPECIALLY IF SUCH CARDS ARE WIDELY ISSUED. IS AS FOLLOWS: HAVING LEARNED THAT CERTAIN OIL COMPANIES HAD EXECUTED CONTRACTS WITH OTHER GOVERNMENTAL AGENCIES FOR THE NATION-WIDE DELIVERY OF GASOLINE AND OIL.

A-80062, DECEMBER 5, 1936, 16 COMP. GEN. 553

GASOLINE AND OIL - GOVERNMENT CONTRACTS - CREDIT CARDS AND LEASING OF CONTRACTOR'S SERVICE STATIONS WHERE AN OIL COMPANY CONTRACTS TO FURNISH A GOVERNMENT AGENCY GASOLINE AND OIL AT ITS SERVICE STATIONS, AND THEN BY REASON OF A STATE CHAIN STORE TAX, OR OTHERWISE, LEASES PART OR ALL OF ITS STATIONS TO INDIVIDUAL DEALERS, PAYMENT MAY BE MADE TO THE CONTRACTOR FOR GASOLINE AND OIL FURNISHED BY SUCH DEALERS ON CREDIT CARDS ISSUED BY THE CONTRACTOR. WHERE AN OIL COMPANY CONTRACTS TO FURNISH A GOVERNMENT AGENCY GASOLINE AND OIL AT ITS SERVICE STATIONS UNDER CONTRACT PROVISIONS WHICH, REASONABLY INTERPRETED, WOULD REQUIRE THE FURNISHING OF THE STIPULATED SERVICES AT ALL STATIONS OPERATED BY IT AT THE TIME SUCH SERVICES ARE REQUIRED, BUT WOULD NOT REQUIRE THE MAINTENANCE OF SERVICE STATIONS FOR THAT PURPOSE, THE CONTRACTOR IS NOT LIABLE FOR ANY EXCESS COST OF GASOLINE AND OIL OTHERWISE PROCURED BY THE UNITED STATES BECAUSE THE CONTRACTOR HAS DISPOSED OF A PART OR ALL OF ITS SERVICE STATIONS WITHOUT MAKING PROVISION FOR THE FURNISHING OF THE CONTRACT SERVICE ELSEWHERE. A GOVERNMENT AGENCY MAY PURCHASE GASOLINE AND OIL UNDER A CONTRACT OF ANOTHER GOVERNMENT AGENCY WHERE THE CONTRACT SO PROVIDES, IF SAID AGENCY HAS ENTERED INTO NO CONTRACTS FOR SUCH SERVICES FOR THE TERRITORY AND PERIOD INVOLVED, OR, IF THE CONTRACTOR FOR THE AGENCY INVOLVED HAS LEASED ITS STATIONS TO INDIVIDUAL DEALERS WITHOUT ARRANGEMENTS FOR THE FURNISHING OF THE SUPPLIES FOR THE ACCOUNT OF THE CONTRACTOR. THE PRACTICE OF GOVERNMENT OFFICERS AND EMPLOYEES OBTAINING GASOLINE AND OIL ON CREDIT OR COURTESY CARDS IS SO OBVIOUSLY OPEN TO GRAVE ABUSE, ESPECIALLY IF SUCH CARDS ARE WIDELY ISSUED, AS TO REQUIRE THE CLOSEST ADMINISTRATIVE SUPERVISION AND POSSIBLY ITS DISCONTINUANCE UPON EVIDENCE OF ITS ABUSE.

ACTING COMPTROLLER GENERAL ELLIOTT TO THE ATTORNEY GENERAL, DECEMBER 5, 1936:

CONSIDERATION HAS BEEN GIVEN THE MATTERS INVOLVED IN LETTERS OF AUGUST 12 AND SEPTEMBER 17, 1936, FROM THE GENERAL AGENT, DEPARTMENT OF JUSTICE, TRANSMITTING MEMORANDA DATED AUGUST 6, SEPTEMBER 8, AND SEPTEMBER 15, 1936, FROM THE DIRECTOR, FEDERAL BUREAU OF INVESTIGATION, CONCERNING THE DIFFICULTIES ENCOUNTERED IN PROCURING OR ARRANGING FOR THE PROCUREMENT OF GASOLINE AND OIL BY AGENTS OF THE BUREAU AT SERVICE STATIONS UNDER STATE- WIDE CONTRACTS WITH OIL COMPANIES.

THE MEMORANDUM OF AUGUST 6, IS AS FOLLOWS:

HAVING LEARNED THAT CERTAIN OIL COMPANIES HAD EXECUTED CONTRACTS WITH OTHER GOVERNMENTAL AGENCIES FOR THE NATION-WIDE DELIVERY OF GASOLINE AND OIL, THE BUREAU HAS CAUSED INQUIRY TO BE MADE BY THE INDIANAPOLIS, INDIANA, OFFICE IN THE EFFORT TO DETERMINE WHETHER ANY OF THE OIL COMPANIES IN THE STATE OF INDIANA ARE IN A POSITION TO CONTRACT WITH THE BUREAU FOR SERVICE STATION DELIVERY OF THESE PRODUCTS FOR THE FISCAL YEAR 1937. YOUR ATTENTION IS INVITED TO PREVIOUS MEMORANDA CONCERNING THE INABILITY OF OIL COMPANIES TO CONTRACT IN THE STATE OF INDIANA DUE TO THE LEASING OF SERVICE STATIONS IN ORDER TO AVOID THE PAYMENT OF THE CHAIN STORE SALES TAX.

MR. M. E. A. MCMANUS, CHIEF CLERK OF SALES, THE INDIAN REFINING COMPANY, 1023 CIRCLE TOWER BUILDING, INDIANAPOLIS, INDIANA, WAS CONTACTED AND STATED THAT THE TEXAS COMPANY IS REPRESENTED IN THE STATE OF INDIANA BY THE INDIAN REFINING COMPANY. HOWEVER, BOTH THE TEXAS COMPANY AND THE INDIAN REFINING COMPANY HAVE SERVICE STATIONS IN INDIANA, KNOWN AS INDIAN STATIONS AND TEXACO STATIONS. THE TWO COMPANIES HAVE AN AGREEMENT WHEREBY CREDIT CARDS OF EITHER COMPANY ARE HONORED AT STATIONS OF BOTH COMPANIES. THEY HAVE 1,273 OUTLETS FOR RETAIL SALE OF GASOLINE AND OIL IN INDIANA.

HE STATED THAT, IN VIEW OF THE STORE TAX WHICH BECAME EFFECTIVE IN THE STATE OF INDIANA ON JULY 1, 1936, ALL OF THEIR SERVICE STATIONS AND THOSE OF THE TEXAS COMPANY WERE LEASED TO INDIVIDUALS PRIOR TO THAT DATE. THE COMPANY SELLS GASOLINE AND OIL TO THE SERVICE STATION LESSEES. ALL OF THE GASOLINE AND OIL AT THE SERVICE STATIONS IS, THEREFORE, THE PROPERTY OF THE SERVICE STATION LESSEES, AND NONE OF IT IS THE PROPERTY OF THE COMPANY.

THE INDIAN REFINING COMPANY, OR THE TEXAS COMPANY, WILL FURNISH GOVERNMENT AGENCIES WITH BOOKS OF BLANK INVOICES, OR WITH CREDIT CARDS, WHICHEVER THE AGENCIES MAY PREFER. IF INVOICE BOOKS ARE USED WHEN GASOLINE OR OIL IS PURCHASED AT SERVICE STATIONS, THE AMOUNT OF THE GASOLINE AND OIL PURCHASED IS ENTERED ON AN INVOICE, AND A DUPLICATE IS LEFT IN THE BOOK FOR USE OF THE GOVERNMENT AGENCY MAKING THE PURCHASE.

PURCHASES MADE ON CREDIT CARDS ARE HANDLED IN THE SAME MANNER AS THEY HAVE PREVIOUSLY BEEN HANDLED WHEN SUCH PURCHASES WERE MADE BY THE INDIANAPOLIS OFFICE OF THIS BUREAU FROM THE STANDARD OIL COMPANY OF INDIANA.

THE ABOVE SET-UP IS PRACTICALLY THE SAME AS THAT OF THE STANDARD OIL COMPANY OF INDIANA, WHOSE CREDIT CARDS THE BUREAU INSTRUCTED ITS INDIANAPOLIS OFFICE TO DISCONTINUE USING BECAUSE THE GASOLINE AND OIL WAS NO LONGER THE PROPERTY OF THE COMPANY, BUT WAS THE PROPERTY OF THE SERVICE STATIONS. HOWEVER, MR. MCMANUS MADE THE FURTHER EXPLANATION OF THE ARRANGEMENT BETWEEN THE COMPANY, THE SERVICE STATIONS, AND THE GOVERNMENT AGENCIES: THE GASOLINE AND OIL IS THE PROPERTY OF THE SERVICE STATION LESSEE. AT THE TIME THE SERVICE STATION PLACES THE GASOLINE IN THE TANK OF THE GOVERNMENT AGENCY'S AUTOMOBILE, THE GASOLINE SO PLACED IN THE TANK AUTOMATICALLY BECOMES THE PROPERTY FIRST OF THE COMPANY, AND THE LESSEE MERELY ACTS AS THE AGENT OF THE COMPANY IN SELLING IT TO THE GOVERNMENT AGENCY.

MR. MCMANUS STATED THAT THE COMPANY HAS CONTRACT T3S-254 WITH THE TREASURY DEPARTMENT FOR SUPPLYING GASOLINE AND OIL FOR CARS OF THE SECRET SERVICE AND THE NARCOTIC INSPECTORS. THE COMPANY ALSO HAS CONTRACTS WITH THE RESETTLEMENT ADMINISTRATION AND THE NAVY DEPARTMENT.

IN VIEW OF THE FACT THAT THE STANDARD OIL COMPANY OF INDIANA HAS MORE SERVICE STATIONS THAN OTHER COMPANIES, IT WAS THOUGHT THAT IF THE INDIAN REFINING COMPANY AND THE TEXAS COMPANY COULD MAKE CONTRACTS UNDER THE ABOVE OUTLINED CONDITIONS, PERHAPS THE STANDARD OIL COMPANY OF INDIANA ALSO COULD DO SO.

WITH THIS IN MIND, AN INTERVIEW WAS HAD WITH MR. J. M. KISSINGER, CREDIT MANAGER, STANDARD OIL COMPANY OF INDIANA, 137 WEST 11TH STREET, INDIANAPOLIS, INDIANA. MR. KISSINGER STATED THAT HE REGRETS THAT THIS BUREAU'S OFFICE OF INDIANAPOLIS CANNOT SEE ITS WAY CLEAR TO USE THE CREDIT CARDS OF THAT COMPANY, JUST AS IT WAS DOING PRIOR TO JULY 1, 1936, AND AS CERTAIN OTHER FEDERAL AGENCIES ARE CONTINUING TO DO.

MR. KISSINGER STATED, HOWEVER, THAT HIS COMPANY HAS LEASED ALL OF ITS SERVICE STATIONS, AND THAT THE GASOLINE AND OIL AT THE SERVICE STATIONS IS THE PROPERTY OF THE LESSEES; AND WHEN A GOVERNMENT AGENCY'S CAR IS FILLED WITH GASOLINE AT A SERVICE STATION, IT IS THE GASOLINE OF THE SERVICE STATION AND NOT THE GASOLINE OF THE STANDARD OIL COMPANY; AND THAT FOR THE COMPANY TO UNDERTAKE TO MAKE ANY DIFFERENT STATEMENT WOULD BE FALSE, AND SERIOUS TROUBLE MIGHT ENSUE WITH THE TAXING POWERS OF THE STATE OF INDIANA BY ATTEMPTING TO SAY THAT WHEN THE GASOLINE WAS PLACED IN THE AUTOMOBILE IT FIRST BECAME AGAIN THE COMPANY'S PROPERTY.

UNDER THE PRESENT SYSTEM, SPECIAL AGENTS OF THIS BUREAU ARE MAKING CASH PAYMENT FOR GASOLINE AND OIL PURCHASED BY THEM FOR USE IN BUREAU AUTOMOBILES AND CLAIMING REIMBURSEMENT THEREFOR IN THEIR MONTHLY EXPENSE ACCOUNTS. THIS, OF COURSE, IS A VERY UNDESIRABLE PROCEDURE AND, TAKING THE ABOVE OUTLINED INFORMATION INTO CONSIDERATION, YOUR ADVICE IS REQUESTED AS TO ANY POSSIBLE SOLUTION OF THE MATTER AT HAND.

THE MEMORANDUM OF SEPTEMBER 8 IS AS FOLLOWS:

THIS BUREAU IS IN RECEIPT OF INFORMATION FROM SEVERAL OF ITS OFFICES TO THE EFFECT THAT THE CONCERNS WITH WHICH THESE OFFICES HAD EXECUTED GASOLINE AND OIL CONTRACTS FOR THE CURRENT FISCAL YEAR, HAVE NOTIFIED THE RESPECTIVE SPECIAL AGENTS IN CHARGE THAT PURCHASES COULD NOT LONGER BE MADE THROUGH DEALER STATIONS ON CREDIT CARDS WHICH HAD BEEN ISSUED TO OUR AGENTS ATTACHED TO THESE OFFICES. THIS NOTIFICATION WAS PREDICATED UPON A RULING OF THE COMPTROLLER GENERAL. SUBSEQUENT TO THIS NOTIFICATION, THESE CONCERNS INFORMED THE ABOVE OFFICES THAT ALL CUSTOMERS WHO ALREADY HAD CONTRACTS WITH THESE COMPANIES COULD USE CREDIT CARDS AT DEALER OUTLETS AS WELL AS AT COMPANY OPERATED STATIONS DURING THE LIFE OF THE CONTRACT.

YOUR ADVICE IS REQUESTED AS TO WHETHER OUR AGENTS MAY CONTINUE THE PURCHASE OF GASOLINE AND OIL FROM THESE CONCERNS, REGARDLESS OF WHETHER THE SOURCE OF THE SERVICE IS A DEALER OPERATED STATION OR OWNED BY THE OIL COMPANY.

THE MEMORANDUM OF SEPTEMBER 15 IS AS FOLLOWS:

REFERENCE IS MADE TO YOUR MEMORANDUM DATED AUGUST 26, 1936, CONCERNING THE PURCHASE OF GASOLINE IN THE STATE OF INDIANA AT GASOLINE STATIONS OWNED BY MAJOR GAS COMPANIES BUT LEASED BY THEM IN AN ATTEMPT TO AVOID PAYMENT OF CHAIN STORE TAX.

IT IS NOTED IN YOUR MEMORANDUM AFOREMENTIONED THAT YOUR OFFICE WAS ADVISED ORALLY AND INFORMALLY BY THE GENERAL ACCOUNTING OFFICE TO THE EFFECT THAT WE SHOULD INSTRUCT OUR AGENTS IN THE LOCALITIES INVOLVED TO PURCHASE THE GASOLINE AT THE SAME STATIONS AT WHICH THEY WOULD HAVE MADE THE PURCHASE UNDER THE CONTRACT, PAY CASH FOR THE SAME, TAKE RECEIPTS IN DUPLICATE AS PROVIDED BY EXISTING REGULATIONS AND CLAIM REIMBURSEMENT IN THEIR EXPENSE ACCOUNTS IN THE USUAL MANNER.

AS HAS BEEN POINTED OUT HERETOFORE, SUCH A PROCEDURE WOULD BE CLUMSY AND NOT AT ALL DESIRABLE. IT HAS BEEN ASCERTAINED BY THE BUREAU THAT THE INTERIOR DEPARTMENT HAS COUNTRY WIDE CONTRACTS WITH THE VARIOUS GAS AND OIL COMPANIES AND SUCH CONTRACTS HAVE BEEN CONSIDERED SATISFACTORY AND ARE STILL IN FORCE. THE BUREAU HAS TAKEN ADVANTAGE OF THESE CONTRACTS IN NUMEROUS STATES AND AT THE PRESENT TIME AGENTS ASSIGNED TO THE FIELD OFFICES IN QUESTION ARE MAKING PURCHASES UNDER INTERIOR DEPARTMENT CONTRACTS.

IT HAS COME TO THE ATTENTION OF THE BUREAU THAT THERE IS A POSSIBILITY THAT THE GENERAL ACCOUNTING OFFICE MAY HOLD THE ORIGINAL CONTRACTORS LIABLE FOR DAMAGES IN THE EVENT PRICES CHARGED UNDER THE INTERIOR DEPARTMENT CONTRACTS ARE IN EXCESS OF PRICES QUOTED ON CONTRACTS EXECUTED AT THE BEGINNING OF THIS FISCAL YEAR WITH THIS BUREAU.

THE BUREAU HAD OPPORTUNITY OF EXECUTING NEW CONTRACTS WITH SOME OF THE GASOLINE AND OIL COMPANIES WHO STILL MAINTAIN THEIR OWN SERVICE STATIONS. HOWEVER THE SAME QUESTION HAS ARISEN CONCERNING THESE CONTRACTS.

IT IS BELIEVED IT IS HIGHLY DESIRABLE FROM AN ADMINISTRATIVE STANDPOINT THAT THIS MATTER BE SETTLED AT THE EARLIEST POSSIBLE DATE SO THAT WE SHALL NOT HAVE ANY DIFFICULTY WITH THE GENERAL ACCOUNTING OFFICE IN THE FUTURE COVERING THE PAYMENT OF GASOLINE AND OIL VOUCHERS.

IT IS REQUESTED THAT THE BUREAU BE ADVISED AS TO WHETHER IT WILL BE POSSIBLE TO EXECUTE NEW CONTRACTS FOR THE PURCHASE OF GASOLINE AND OIL IN THE VARIOUS FIELD OFFICE DISTRICTS WHERE THE PRESENT CONTRACTORS HAVE LEASED THEIR VARIOUS SERVICE STATIONS, THEREBY BREACHING THEIR CONTRACTS. IF SUCH IS POSSIBLE, IT IS DESIRED THAT THE BUREAU BE INFORMED AS TO WHETHER IT WILL BE NECESSARY TO TAKE INTO CONSIDERATION POSSIBLE SUITS FOR DAMAGES BY THE GENERAL ACCOUNTING OFFICE AGAINST THE ORIGINAL CONTRACTORS IN THE EVENT THE NEW CONTRACTS REFLECT PRICES IN EXCESS OF THE ORIGINAL ONES.

IT IS FURTHER REQUESTED THAT THE BUREAU BE ADVISED AS TO WHETHER THERE WILL BE ANY DIFFICULTY ENCOUNTERED IN THE FUTURE THROUGH ITS USE OF PRESENT GASOLINE AND OIL CONTRACTS EXECUTED BY THE INTERIOR DEPARTMENT.

IT IS BELIEVED THAT THIS MATTER HAS GROWN TO SUCH AN EXTENT THAT AN OPINION OF THE ACTING COMPTROLLER GENERAL WOULD BE MOST DESIRABLE.

THERE APPEAR TO BE THREE QUESTIONS INVOLVED---

1. WHERE AN OIL COMPANY HAS CONTRACTED TO FURNISH THE BUREAU GASOLINE AND OIL AT ITS SERVICE STATIONS THROUGHOUT A STATE OR AREA FOR A CERTAIN PERIOD OF TIME AND THEN BY REASON OF A STATE CHAIN-STORE TAX, OR OTHERWISE, HAS LEASED PART OR ALL OF SUCH SERVICE STATIONS TO INDIVIDUAL DEALERS, MAY PAYMENT LEGALLY BE MADE TO THE PARENT COMPANY, OR CONTRACTOR, FOR GASOLINE AND OIL FURNISHED BY SUCH DEALERS ON CREDIT CARDS ISSUED BY THE CONTRACTOR?

2. IF, UNDER SUCH CIRCUMSTANCES, THE CONTRACTOR MAKES NO ARRANGEMENTS WITH THE INDIVIDUAL DEALERS AT SUCH LEASED STATIONS TO FURNISH GASOLINE AND OIL UNDER THE TERMS OF THE CONTRACT, IS THE CONTRACTOR LIABLE FOR ANY EXCESS COST OF GASOLINE AND OIL OTHERWISE PROCURED?

3. WHERE THE BUREAU HAS NO SUCH CONTRACT FOR A CERTAIN STATE, OR THE CONTRACTOR FOR THAT STATE HAS LEASED ITS STATIONS TO INDIVIDUAL DEALERS WITHOUT ARRANGEMENTS FOR SUCH DEALERS TO SUPPLY THE GASOLINE AND OIL REQUIRED, MAY THE BUREAU PURCHASE GASOLINE AND OIL UNDER DEPARTMENT OF THE INTERIOR CONTRACTS FOR SIMILAR SERVICE IN THE STATE?

AS TO THE FIRST QUESTION IT MAY BE STATED GENERALLY THAT WHERE A CONTRACTOR MAKES ARRANGEMENTS WITH INDIVIDUAL DEALERS IN A STATE HANDLING ITS PRODUCTS TO HONOR REQUISITIONS (IN THE FORM OF CREDIT CARDS OR OTHERWISE) FOR GASOLINE AND OIL BY FURNISHING SUCH SUPPLIES TO THE GOVERNMENT FOR THE CONTRACTOR'S ACCOUNT, IT WOULD SEEM CLEAR THAT THE INDIVIDUAL DEALER WOULD BE ACTING ONLY AS AN AGENT FOR THE CONTRACTOR, AND THERE WOULD BE NO LEGAL OBJECTION TO PAYING THE CONTRACTOR FOR THE SUPPLIES SO FURNISHED THE GOVERNMENT BY THE CONTRACTOR'S AGENT. IF, UNDER A CONTRACT BETWEEN THE GOVERNMENT AND THE CONTRACTOR, THE SUPPLIES ARE FURNISHED BY A DEALER FOR THE ACCOUNT OF THE CONTRACTOR, THERE DOES NOT NECESSARILY ARISE ANY QUESTION AS TO THE AGENCY ARRANGEMENT OR THE TITLE TO THE SUPPLIES AS BETWEEN THE CONTRACTOR AND THE DEALER, AND IT IS NOT NECESSARY TO DECIDE AT THIS TIME WHETHER SO SUPPLYING THE NEEDS OF THE UNITED STATES WOULD BE SUBJECT TO A STATE CHAIN-STORE TAX OR OTHER STATE TAX. HOWEVER, ATTENTION MAY BE INVITED TO THE VIEWS STATED AND THE PRECEDENTS CITED BY THE SUPREME COURT IN PANHANDLE OIL COMPANY V. MISSISSIPPI, 277 U.S. 218. SEE, ALSO, GRAVES ET AL. V. TEXAS COMPANY, NO. 727, DECIDED BY THE SUPREME COURT MAY 18, 1936, AND 16 COMP. GEN. 150. THE FIRST QUESTION IS ANSWERED IN THE AFFIRMATIVE.

AS TO A CONTRACTOR'S LIABILITY FOR ANY EXCESS COSTS OF GASOLINE AND OIL OTHERWISE PROCURED WHERE THE CONTRACTOR HAS LEASED ITS STATIONS TO INDIVIDUAL DEALERS WITHOUT ARRANGEMENTS FOR SUCH DEALERS TO SUPPLY GASOLINE AND OIL UNDER THE CONTRACT, THERE HAVE BEEN EXAMINED THE BUREAU OF INVESTIGATION CONTRACTS OF THIS CHARACTER, CITED IN A LIST RECENTLY SUBMITTED BY THE GENERAL AGENT. THESE CONTRACTS ARE MERELY ACCEPTANCES OF THE BIDS OF CERTAIN OIL COMPANIES TO FURNISH GASOLINE AND OIL DURING THE PERIOD FROM JULY 1, 1936, TO JUNE 30, 1937, AT THEIR SERVICE STATIONS IN PARTICULAR STATES AND AREAS AT THE POSTED SERVICE STATION PRICE, LESS TAXES, AT THE PLACE AND TIME OF DELIVERY, WITH A PROVISION IN CERTAIN OF SUCH CONTRACTS THAT THE PRICES WILL NOT EXCEED A STATED MAXIMUM DURING THE FIRST 3 MONTHS, AND IN SOME CASES DURING THE WHOLE PERIOD, OF THE CONTRACT TIME. THE EVIDENT PURPOSE OF THE CONTRACTS IS TO PROVIDE FOR THE PROCUREMENT OF GASOLINE AND OIL AT NUMEROUS SERVICE STATIONS THROUGHOUT AN AREA AS NEEDED WITHOUT THE NECESSITY OF THE BUREAU'S AGENTS PAYING FOR SUCH SUPPLIES FROM THEIR OWN FUNDS AT THE TIME OF PURCHASE. THE AGREEMENTS EVIDENTLY CONTEMPLATE THAT SUCH SERVICE WILL BE PROVIDED AT ANY OF THE CONTRACTOR'S STATIONS IN THE STATE OR AREA. THE NUMBER OF SUCH STATIONS IS NOT STIPULATED AND THERE IS NO PROVISION THAT ANY NUMBER OF STATIONS WILL BE MAINTAINED. IT SEEMS CLEAR THAT THE AGREEMENTS WOULD APPLY TO ANY NEW STATIONS OPEN BY THE CONTRACTOR IN THE AREA DURING THE CONTRACT PERIOD. CONVERSELY, THERE WOULD BE NO REQUIREMENT TO MAINTAIN STATIONS FOR THE PURPOSE OF PROVIDING THE SERVICE. THAT IS TO SAY, A REASONABLE CONSTRUCTION OF SUCH AGREEMENTS, IN VIEW OF THE SURROUNDING CIRCUMSTANCES, IS SAID THAT THEY IMPOSE AN OBLIGATION ON THE CONTRACTOR TO PROVIDE THE STIPULATED SERVICES AT ANY AND ALL STATIONS BEING OPERATED BY IT AT THE TIME SUCH SERVICES ARE REQUIRED, BUT NOT NECESSARILY TO MAINTAIN SERVICE STATIONS FOR THAT PURPOSE. IT FOLLOWS THAT WHERE SUCH A CONTRACTOR DISPOSES OF A PART OR ALL OF ITS STATIONS, BY LEASE TO INDIVIDUAL DEALERS OR OTHERWISE, DURING THE CONTRACT PERIOD, THERE APPEARS NO LEGAL BASIS FOR CHARGING THE CONTRACTOR WITH ANY DIFFERENCE BETWEEN THE COST OF GASOLINE AND OIL OTHERWISE PROCURED AND THE PRICE, IF IT COULD BE DETERMINED, AT WHICH SUCH SUPPLIES WOULD HAVE BEEN PROCURABLE AT STATIONS OF THE CONTRACTOR IF THEIR OPERATION HAD BEEN CONTINUED. ACCORDINGLY, THE SECOND QUESTION MUST BE AND IS ANSWERED IN THE NEGATIVE.

AS TO THE THIRD QUESTION, AN EXAMINATION OF THE DEPARTMENT OF THE INTERIOR CONTRACTS OF A SIMILAR CHARACTER CITED IN THE LIST SUBMITTED BY THE GENERAL AGENT DISCLOSES THAT THE ADVERTISEMENT FOR SUCH CONTRACTS EXPRESSLY PROVIDE THAT---

THE RIGHT IS RESERVED TO ORDER UNDER ANY CONTRACT RESULTING FROM THIS ADVERTISEMENT THE REQUIREMENT OF ANY OTHER FEDERAL ACTIVITY WHICH MAY INDICATE TO THE DEPARTMENT OF THE INTERIOR A DESIRE TO PARTICIPATE UNDER SUCH CONTRACT.

IN VIEW OF THIS EXPRESS RESERVATION IN THE ADVERTISEMENT, WHICH BY REFERENCE IS MADE A PART OF THE CONTRACTS, THERE SEEMS NO ROOM FOR DOUBT THAT THE CONTRACTORS ARE OBLIGATED TO PROVIDE SERVICES AS STIPULATED TO ANY OTHER FEDERAL ACTIVITIES WHERE REQUIRED, UPON NOTIFICATION OF THE DEPARTMENT OF THE INTERIOR BY SUCH OTHER FEDERAL ACTIVITY OF ITS DESIRE TO PURCHASE SUPPLIES UNDER SUCH CONTRACT. THERE APPEARS NO LEGAL OBJECTION TO THE FEDERAL BUREAU OF INVESTIGATION PURCHASING REQUIRED SUPPLIES UNDER THE TERMS OF SUCH DEPARTMENT OF THE INTERIOR CONTRACTS AT PLACES WHERE GASOLINE AND OIL ARE NOT AVAILABLE UNDER EXISTING BUREAU OF INVESTIGATION CONTRACTS, INCLUDING PLACES WHERE THE BUREAU OF INVESTIGATION CONTRACTOR HAS LEASED ITS STATIONS TO INDIVIDUAL DEALERS WITHOUT ARRANGEMENT FOR SUCH DEALERS TO FURNISH SUCH SUPPLIES FOR THE ACCOUNT OF THE CONTRACTOR. THE THIRD QUESTION IS ANSWERED IN THE AFFIRMATIVE.

WHAT HAS BEEN SAID HEREIN APPEARS TO ANSWER THE IMMEDIATE QUESTIONS RAISED BY THE SUBMISSION. IT SHOULD BE STATED, HOWEVER, THAT THE PRACTICE OF EMPLOYEES OBTAINING GASOLINE AND OIL ON CREDIT OR COURTESY CARDS UNDER GOVERNMENT CONTRACTS IS NOT WHOLLY FREE FROM OBJECTION. IT IS REALIZED THAT SUCH PROCEDURE IS OF GREAT CONVENIENCE AND PRACTICABILITY, PARTICULARLY WHERE THE DUTY OF EMPLOYEES REQUIRE THEM TO SPEND MUCH TIME IN TRAVELING ABOUT THE COUNTRY BY GOVERNMENT-OWNED AUTOMOBILES. BUT THE PRACTICE IS SO OBVIOUSLY OPEN TO GRAVE ABUSE, ESPECIALLY IF SUCH CARDS ARE WIDELY ISSUED, THAT IT SCARCELY NEED BE STATED THAT SUCH PRACTICE SHOULD HAVE THE CLOSEST ADMINISTRATIVE SUPERVISION. ANY EVIDENCE THROUGHOUT THE GOVERNMENT SERVICE OF THE ABUSE OF SUCH CREDIT OR COURTESY-CARD PRIVILEGE MAY REQUIRE A DISCONTINUANCE OF THE PRACTICE.