A-87859, JULY 28, 1937, 17 COMP. GEN. 81

A-87859: Jul 28, 1937

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CONTRACTS - SIGNATURES BY PROXY CONTRACTS ENTERED INTO ON BEHALF OF THE UNITED STATES BY THE FEDERAL SURPLUS COMMODITIES CORPORATION SHOULD NOT BE PROXY SIGNED BUT SHOULD BE SIGNED BY THE OFFICER OR EMPLOYEE WHO IS ACTUALLY AUTHORIZED TO AND DOES NEGOTIATE AND MAKE THE CONTRACTS. BECAUSE IN MANY INSTANCES THE CORPORATION WILL BE DEALING IN PERISHABLE COMMODITIES. THE PROCUREMENT OFFICER AND THE DISTRIBUTION OFFICER OF THE CORPORATION ARE CHARGED. THEIR AUTHORITY TO CONTRACT IS FOUND IN SECTIONS 33 AND 34 OF THE BYLAWS OF THE CORPORATION. COPIES OF WHICH ARE ATTACHED HERETO. THE FOLLOWING RESOLUTION WAS DOPTED: RESOLVED. HEREBY ARE. STATES IN THE LAST PARAGRAPH: "IT IS NOTED THAT THE PROPOSED PURCHASE ORDERS ARE TO BE SIGNED "H.

A-87859, JULY 28, 1937, 17 COMP. GEN. 81

CONTRACTS - SIGNATURES BY PROXY CONTRACTS ENTERED INTO ON BEHALF OF THE UNITED STATES BY THE FEDERAL SURPLUS COMMODITIES CORPORATION SHOULD NOT BE PROXY SIGNED BUT SHOULD BE SIGNED BY THE OFFICER OR EMPLOYEE WHO IS ACTUALLY AUTHORIZED TO AND DOES NEGOTIATE AND MAKE THE CONTRACTS.

ACTING COMPTROLLER GENERAL ELLIOTT TO THE SECRETARY OF AGRICULTURE, JULY 28, 1937:

THERE HAS BEEN RECEIVED YOUR LETTER OF JULY 20, 1937, AS FOLLOWS:

PURSUANT TO PUBLIC NO. 165, 75TH CONGRESS, APPROVED JUNE 28, 1937, THERE HAS BEEN TRANSFERRED TO THE FEDERAL SURPLUS COMMODITIES CORPORATION CERTAIN FUNDS APPROPRIATED BY SECTION 32, PUBLIC NO. 320, 74TH CONGRESS, APPROVED AUGUST 24, 1935, FOR THE PURPOSE OF CARRYING OUT CLAUSE (2) OF SECTION 32.

THE ADEQUATE ACCOMPLISHMENT OF THE PROGRAMS PUT INTO OPERATION PURSUANT TO THE ABOVE STATUTES NECESSITATES MANY PURCHASES IN ALL PARTS OF THE UNITED STATES. THESE PURCHASES MUST BE EXPEDITIOUSLY HANDLED, BECAUSE IN MANY INSTANCES THE CORPORATION WILL BE DEALING IN PERISHABLE COMMODITIES. THE PROCUREMENT OFFICER AND THE DISTRIBUTION OFFICER OF THE CORPORATION ARE CHARGED, RESPECTIVELY, WITH THE DUTIES OF PURCHASING AND DISTRIBUTING COMMODITIES. IN ORDER TO FULFILL THEIR DUTIES, THEY MUST ENTER INTO CONTRACTS. THEIR AUTHORITY TO CONTRACT IS FOUND IN SECTIONS 33 AND 34 OF THE BYLAWS OF THE CORPORATION, COPIES OF WHICH ARE ATTACHED HERETO.

AT A MEETING OF THE BOARD OF DIRECTORS HELD JUNE 30, 1937, THE FOLLOWING RESOLUTION WAS DOPTED:

RESOLVED, THAT THE PROCUREMENT OFFICER AND THE DISTRIBUTION OFFICER BE, AND HEREBY ARE, AUTHORIZED TO DESIGNATE EMPLOYEES OF THEIR RESPECTIVE DIVISIONS WITH AUTHORITY TO SIGN CONTRACTS FOR AND ON BEHALF OF THOSE OFFICERS.

YOUR LETTER OF OCTOBER 6, 1936 (A-80831), ADDRESSED TO THE SECRETARY OF AGRICULTURE, RELATING TO PURCHASE ORDERS, STATES IN THE LAST PARAGRAPH:

"IT IS NOTED THAT THE PROPOSED PURCHASE ORDERS ARE TO BE SIGNED "H. C. ALBIN, CHIEF, COMMODITIES PURCHASE SECTION, BY ----.' CONTRACT DOCUMENTS ON BEHALF OF THE UNITED STATES SHOULD NOT BE PROXY SIGNED BUT SHOULD BE SIGNED IN THE NAME OF THE PERSON ACTUALLY AUTHORIZED TO AND WHO DOES CONTRACT ON BEHALF OF THE UNITED STATES.'

IT IS NOT DESIRABLE ADMINISTRATIVELY TO SPECIFICALLY AUTHORIZE A NUMBER OF EMPLOYEES TO CONTRACT FOR THE CORPORATION. IN ORDER TO CENTER RESPONSIBILITY FOR THE EXECUTION OF PROCUREMENT AND DISTRIBUTION CONTRACTS IT IS DESIRABLE TO AUTHORIZE THE OFFICERS IN CHARGE OF THOSE FUNCTIONS TO DESIGNATE AGENTS FOR THE PURPOSE OF SIGNING CONTRACTS FOR THOSE OFFICERS. THE CORPORATION THEN MAY LOOK SOLELY TO THOSE OFFICERS FOR RESPONSIBILITY.

IT IS BELIEVED THAT THE CORPORATE SET-UP WITH WHICH WE ARE HERE CONCERNED IS DISTINGUISHABLE FROM THE SITUATION REFERRED TO IN YOUR LETTER OF OCTOBER 6, 1936, BUT IT IS THOUGHT THAT THERE IS SUFFICIENT SIMILARITY TO WARRANT A REQUEST FOR CLEARANCE. THE PROCEDURE WILL BE THAT H. C. ALBIN, PROCUREMENT OFFICER, FEDERAL SURPLUS COMMODITIES CORPORATION, HAVING BEEN GIVEN AUTHORITY BY RESOLUTION OF THE BOARD OF DIRECTORS TO DESIGNATE EMPLOYEES OF HIS DIVISION TO SIGN CONTRACTS FOR HIM AND ON HIS BEHALF, WILL SO DESIGNATE EMPLOYEES WHO WILL CONTRACT IN THE FIELD FOR IMMEDIATE PURCHASES AND WILL SIGN CONTRACTS "H. C. ALBIN, PROCUREMENT OFFICER, FEDERAL SURPLUS COMMODITIES CORPORATION, BY JOHN DOE, AGENT.' YOUR APPROVAL OF THIS PROCEDURE IS REQUESTED.

THE LAW CONTEMPLATES AND REQUIRES PERSONAL RESPONSIBILITY OF OFFICERS AND AGENTS FOR THE PERFORMANCE OF THEIR DUTIES ON BEHALF OF THE UNITED STATES. SEE SECTION 35 OF THE CRIMINAL CODE OF MARCH 4, 1909, 35 STAT. 1095, AS AMENDED BY THE ACT OF OCTOBER 23, 1918, 40 STAT. 1015 (U.S. CODE, TITLE 18, SECS. 80, 82, 83, 84, AND 85). WHILE UNDER SECTION 3744, REVISED STATUTES, THE SECRETARIES OF WAR, NAVY, AND INTERIOR DEPARTMENTS HAVE CENTERED IN THEM THE RESPONSIBILITY FOR CONTRACTING FOR THEIR SEVERAL ACTIVITIES, THEY ARE AUTHORIZED TO DESIGNATE CONTRACTING OFFICERS TO SIGN ON BEHALF OF THE UNITED STATES. THE FAR-FLUNG ACTIVITIES OF THESE DEPARTMENTS ARE MUCH GREATER THAN THE ACTIVITIES OF THE FEDERAL SURPLUS COMMODITIES CORPORATION, AND THERE HAS BEEN NO SHOWING THAT SAID CORPORATION SHOULD NOT ACT THROUGH DESIGNATED CONTRACTING OFFICERS WHO WILL BE REQUIRED TO ENTER INTO CONTRACTS ON BEHALF OF THE FEDERAL SURPLUS COMMODITIES CORPORATION AND SIGN SAME IN THEIR OWN NAMES. CERTAIN PROXY- SIGNED CONTRACTS DURING THE WORLD WAR RAISED MANY DISPUTED QUESTIONS EVEN AFTER THE ENACTMENT OF THE ACT OF MARCH 2, 1919, 40 STAT. 1272, AND IN VIEW OF THE TERMS OF THE LAW THIS OFFICE WOULD NOT BE JUSTIFIED IN APPROVING A PROCEDURE NEGATIVED IN THE DECISION OF OCTOBER 6, 1936, FOR THE DESIGNATION OF A NUMBER OF EMPLOYEES TO CONTRACT FOR THE CORPORATION ON BEHALF OF THE CHIEF OF THE COMMODITIES PURCHASE SECTION THEREOF OR ANY OTHER OFFICER OR EMPLOYEE OF THE CORPORATION. THE OFFICER OR EMPLOYEE WHO ACTUALLY MAKES OR NEGOTIATES THE CONTRACT IS THE ONE WHO SHOULD SIGN IT AS THE CONTRACTING OFFICER.