B-102196, OCT. 22, 1956

B-102196: Oct 22, 1956

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GENERAL SERVICES ADMINISTRATION: REFERENCE IS MADE TO YOUR LETTER OF OCTOBER 8. * * * AUTHORITY IS HEREBY DELEGATED TO THE SECRETARY OF THE INTERIOR. THE INFERENCE IS INESCAPABLE THAT IT MUST HAVE BEEN CONTEMPLATED AS APPLYING TO CONTRACTS EXECUTED UNDER AUTHORITY OF STATUTES OTHER THAN THE FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT ITSELF. IT IS UNDERSTOOD THAT THE DELEGATION WAS ISSUED IN THE INTEREST OF CARRYING OUT RECOMMENDATION NO. 6 OF THE FIRST PROGRESS REPORT OF THE CABINET COMMITTEE ON SMALL BUSINESS. IT IS ASSUMED THAT THE POLICIES. CONTROLS TO BE PRESCRIBED BY THE GENERAL SERVICES ADMINISTRATION IN CONNECTION WITH THE DELEGATION WILL CONTAIN DIRECTIVES TO INSURE USE OF THE AUTHORITY DELEGATED TO ACCOMPLISH THIS PURPOSE.

B-102196, OCT. 22, 1956

TO ADMINISTRATOR, GENERAL SERVICES ADMINISTRATION:

REFERENCE IS MADE TO YOUR LETTER OF OCTOBER 8, 1956, REQUESTING OUR VIEWS CONCERNING A DELEGATION OF AUTHORITY MADE BY YOU ON SEPTEMBER 25, 1956. YOUR LETTER STATES YOU CONCLUDED FROM AN ANALYSIS OF SECTIONS 305 AND 302 OF THE FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT THAT AUTHORITY TO MAKE ADVANCE PAYMENTS UNDER SECTION 305 OF THE ACT COULD BE DELEGATED WITH RESPECT TO ALL NEGOTIATED CONTRACTS, WHETHER UNDER AUTHORITY OF THAT ACT OR OTHER APPLICABLE LAW.

ACCORDINGLY, ON SEPTEMBER 25, 1956, YOU ISSUED THE DELEGATION IN QUESTION, WHICH CONTAINS THE FOLLOWING LANGUAGE:

"PURSUANT TO THE AUTHORITY VESTED IN ME BY THE FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT OF 1949, 63 STAT. 377, AS AMENDED, * * * AUTHORITY IS HEREBY DELEGATED TO THE SECRETARY OF THE INTERIOR, THE SECRETARY OF AGRICULTURE, THE SECRETARY OF COMMERCE, THE POSTMASTER GENERAL, THE CHAIRMAN OF THE ATOMIC ENERGY COMMISSION AND THE ADMINISTRATOR OF VETERANS AFFAIRS TO MAKE CERTAIN ADVANCE PAYMENTS IN ACCORDANCE WITH SECTION 305 OF THE ACT, IN CONNECTION WITH CONTRACTS NEGOTIATED WITHOUT ADVERTISING. THIS AUTHORITY APPLIES TO CONTRACTS NEGOTIATED UNDER THE FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT OF 1949, AS AMENDED, OR UNDER ANY OTHER LAW.'

HOWEVER, BECAUSE OF THE IMPORTANCE OF THE MATTER, YOU REQUEST A FORMAL RULING BY US ON THE PROPRIETY OF THE ACTION TAKEN.

SECTION 305 OF THE FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT PROVIDES IN PERTINENT PART AS FOLLOWS:

"/A) THE AGENCY HEAD MAY MAKE ADVANCE PAYMENTS UNDER NEGOTIATED CONTRACTS HERETOFORE OR HEREAFTER EXECUTED IN ANY AMOUNT NOT EXCEEDING THE CONTRACT PRICE UPON SUCH TERMS AS THE PARTIES SHALL AGREE: * * *"

INASMUCH AS THE SECTION SPECIFICALLY REFERS TO CONTRACTS "HERTOFORE" EXECUTED, THE INFERENCE IS INESCAPABLE THAT IT MUST HAVE BEEN CONTEMPLATED AS APPLYING TO CONTRACTS EXECUTED UNDER AUTHORITY OF STATUTES OTHER THAN THE FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT ITSELF. FOR THIS REASON, WE DO NOT OBJECT TO THE DELEGATION MADE BY YOU ON SEPTEMBER 25, 1956.

IT IS UNDERSTOOD THAT THE DELEGATION WAS ISSUED IN THE INTEREST OF CARRYING OUT RECOMMENDATION NO. 6 OF THE FIRST PROGRESS REPORT OF THE CABINET COMMITTEE ON SMALL BUSINESS, AND IT IS ASSUMED THAT THE POLICIES, PROCEDURES, AND CONTROLS TO BE PRESCRIBED BY THE GENERAL SERVICES ADMINISTRATION IN CONNECTION WITH THE DELEGATION WILL CONTAIN DIRECTIVES TO INSURE USE OF THE AUTHORITY DELEGATED TO ACCOMPLISH THIS PURPOSE. THIS CONNECTION, YOUR ATTENTION IS INVITED TO THE PROVISIONS OF PARAGRAPH 3-505 OF THE ARMED SERVICES PROCUREMENT REGULATION DEALING WITH ADVANCE PAYMENTS GENERALLY AND THE CHARGING OF INTEREST THEREFOR IN MOST CASES.