A-89217, OCTOBER 4, 1937, 17 COMP. GEN. 300

A-89217: Oct 4, 1937

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NOTWITHSTANDING THE GENERAL RULE THAT SUCH SERVICES ARE FOR PERFORMANCE BY FEDERAL PERSONNEL UNDER GOVERNMENT SUPERVISION. IF THE CONTRACTS ARE FOR PURELY PERSONAL SERVICES AS DISTINGUISHED FROM NONPERSONAL SERVICES. - THE SALARY LIMITATION OF THE APPROPRIATION ACT IS FOR APPLICATION. IS AS FOLLOWS: THE INDEPENDENT OFFICES APPROPRIATION ACT. OR STATISTICAL SERVICES ARE TO BE MADE THE SUBJECT OF A CONTRACT. AN EARLY REPLY WILL BE APPRECIATED. THE GENERAL RULE IS THAT PURELY PERSONAL SERVICES MAY NOT BE ENGAGED BY THE GOVERNMENT ON A NONPERSONAL SERVICE CONTRACT BASIS BUT ARE REQUIRED TO BE PERFORMED BY FEDERAL PERSONNEL UNDER GOVERNMENT SUPERVISION. THE SECOND PROVISO IS A LIMITATION ON THE RATE OF SALARY PAID TO PERSONS EMPLOYED PART TIME OR FULL TIME ON A PERSONAL SERVICE BASIS AND ACCORDINGLY DOES NOT RESTRICT THE RATE PAID AS FEES OR CONTRACT PRICE UNDER A NONPERSONAL SERVICE CONTRACT EXECUTED IN ACCORDANCE WITH THE FIRST PROVISO.

A-89217, OCTOBER 4, 1937, 17 COMP. GEN. 300

PERSONAL SERVICES - PROCUREMENT BY CONTRACT AS DISTINGUISHED FROM EMPLOYMENT - SOCIAL SECURITY BOARD - COMPENSATION LIMITATIONS THE SOCIAL SECURITY BOARD, BY REASON OF THE PROVISO IN ITS APPROPRIATION FOR THE FISCAL YEAR 1938, 50 STAT. 344,"FOR EMPLOYING PERSONS OR ORGANIZATIONS, BY CONTRACT OR OTHERWISE, FOR SPECIAL ACCOUNTING, ACTUARIAL, * * * SERVICES," MAY EMPLOY, BY CONTRACT, PURELY PERSONAL SERVICES OF THE KIND ENUMERATED, NOTWITHSTANDING THE GENERAL RULE THAT SUCH SERVICES ARE FOR PERFORMANCE BY FEDERAL PERSONNEL UNDER GOVERNMENT SUPERVISION, BUT IF THE CONTRACTS ARE FOR PURELY PERSONAL SERVICES AS DISTINGUISHED FROM NONPERSONAL SERVICES--- THOSE INVOLVING RESULTS TO BE ACCOMPLISHED RATHER THAN TIME ACTUALLY WORKED AND SUPERVISION BY GOVERNMENT PERSONNEL--- THE SALARY LIMITATION OF THE APPROPRIATION ACT IS FOR APPLICATION.

ACTING COMPTROLLER GENERAL ELLIOTT TO THE CHAIRMAN, SOCIAL SECURITY BOARD, OCTOBER 4, 1937:

THE LETTER OF THE EXECUTIVE DIRECTOR OF THE SOCIAL SECURITY BOARD (FILE PDB:18), PRESUMABLY PRESENTED WITH YOUR AUTHORITY, IS AS FOLLOWS:

THE INDEPENDENT OFFICES APPROPRIATION ACT, 1938, APPROVED JUNE 28, 1937, CONTAINS INTER ALIA THE FOLLOWING PROVISION RELATING TO THE APPROPRIATION OF THE SOCIAL SECURITY BOARD:

"PROVIDED FURTHER, THAT THE BOARD MAY EXPEND NOT TO EXCEED $40,000 OF THE SUM HEREIN APPROPRIATED FOR EMPLOYING PERSONS OR ORGANIZATIONS, BY CONTRACT OR OTHERWISE, FOR SPECIAL ACCOUNTING, ACTUARIAL, STATISTICAL, AND REPORTING, ENGINEERING, AND ORGANIZATIONAL SERVICES DETERMINED NECESSARY BY THE BOARD, WITHOUT REGARD TO SECTION 3709 OF THE REVISED STATUTES (U.S.C., TITLE 41, SEC. 5), AND THE PROVISIONS OF OTHER LAWS APPLICABLE TO THE EMPLOYMENT AND COMPENSATION OF OFFICERS AND EMPLOYEES OF THE UNITED STATES; PROVIDED FURTHER, THAT NO SALARY SHALL BE PAID FOR PERSONAL SERVICES FROM THE MONEY HEREIN APPROPRIATED UNDER THE HEADING "SOCIAL SECURITY BOARD" IN EXCESS OF THE RATES ALLOWED BY THE CLASSIFICATION ACT OF 1923, AS AMENDED, FOR SIMILAR SERVICES; PROVIDED FURTHER, THAT THIS PROVISO SHALL NOT APPLY TO THE SALARIES OF THE BOARD EMBERS; PROVIDED FURTHER, THAT NONE OF THE FUNDS HEREIN APPROPRIATED UNDER THE HEADING "SOCIAL SECURITY BOARD" SHALL BE USED TO PAY THE SALARY OF ANY EXPERT OR ATTORNEY RECEIVING COMPENSATION OF $5,000 OR MORE PER ANNUM UNLESS AND UNTIL SUCH EXPERT OR ATTORNEY SHALL BE APPOINTED BY THE PRESIDENT, BY AND WITH THE ADVICE AND CONSENT OF THE SENATE.'

IN NEGOTIATING CONTRACTS FOR SPECIAL SERVICES IN ACCORDANCE WITH THE FIRST PROVISO QUOTED, THE BOARD DESIRES TO KNOW IF THE LANGUAGE IN THE SECOND PROVISO CONSTITUTES A LIMITATION UPON THE AMOUNT OF FEES TO BE FIXED IN THE CONTRACTS. FOR EXAMPLE, IF SPECIAL ACCOUNTING, ACTUARIAL, OR STATISTICAL SERVICES ARE TO BE MADE THE SUBJECT OF A CONTRACT, MUST THE FEE OR DAILY COMPENSATION BE FIXED AT THE RATES PRESCRIBED BY THE CLASSIFICATION ACT OF 1923, AS AMENDED?

IN VIEW OF THE FACT THAT THE BOARD HAS UNDER CONSIDERATION A CONTRACT FOR SPECIAL SERVICES WHICH IT DESIRES TO CLOSE IN THE NEAR FUTURE, AN EARLY REPLY WILL BE APPRECIATED.

THE GENERAL RULE IS THAT PURELY PERSONAL SERVICES MAY NOT BE ENGAGED BY THE GOVERNMENT ON A NONPERSONAL SERVICE CONTRACT BASIS BUT ARE REQUIRED TO BE PERFORMED BY FEDERAL PERSONNEL UNDER GOVERNMENT SUPERVISION. THE FIRST PROVISO QUOTED AUTHORIZES AN EXCEPTION TO THIS GENERAL RULE. THE FEES OR AMOUNT OF THE CONTRACT PRICE PAID IN ACCORDANCE WITH THE TERMS OF A NONPERSONAL SERVICE CONTRACT BASED ON THE RESULTS TO BE ACCOMPLISHED RATHER THAN ON THE TIME ACTUALLY WORKED ON THE JOB, COVERING NOT ONLY THE CONTRACTOR'S TIME BUT ALSO THE USE OF HIS FACILITIES--- OFFICE, STAFF, EQUIPMENT, ETC.--- DOES NOT CONSTITUTE SALARY. THE SECOND PROVISO IS A LIMITATION ON THE RATE OF SALARY PAID TO PERSONS EMPLOYED PART TIME OR FULL TIME ON A PERSONAL SERVICE BASIS AND ACCORDINGLY DOES NOT RESTRICT THE RATE PAID AS FEES OR CONTRACT PRICE UNDER A NONPERSONAL SERVICE CONTRACT EXECUTED IN ACCORDANCE WITH THE FIRST PROVISO.

DECISION

IF, HOWEVER, ANY OF THE CLASSES OF THE WORK MENTIONED IN THE FIRST PROVISO BE PERFORMED ON A PURELY PERSONAL SERVICE BASIS IN WHICH THE TIME ELEMENT ONLY IS INVOLVED AND THE WORK IS SUPERVISED BY THE BOARD, THE PAYMENT IS SALARY AND LIMITED TO THE CLASSIFICATION ACT RATES IN ACCORDANCE WITH THE SECOND PROVISO.