B-114918, JULY 9, 1953, 33 COMP. GEN. 12

B-114918: Jul 9, 1953

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CHARGES FOR TRANSPORTATION OF GOVERNMENT SUPPLIES ARE NOT CHARGEABLE TO THE APPROPRIATION FOR THE FISCAL YEAR IN WHICH THE SUPPLIES ARE PURCHASED IF THE TRANSPORTATION IS PERFORMED IN A SUBSEQUENT FISCAL YEAR AND THE CONTRACT OF TRANSPORTATION IS SEPARATE FROM THE CONTRACT OF PURCHASE. 1953: REFERENCE IS MADE TO YOUR LETTER OF APRIL 21. THE AMENDED STATUTORY PROVISIONS IN QUESTION ARE AS FOLLOWS: NO OFFICER OR EMPLOYEE OF THE UNITED STATES SHALL MAKE OR AUTHORIZE AN EXPENDITURE FROM OR CREATE OR AUTHORIZE AN OBLIGATION UNDER ANY APPROPRIATION OR FUND IN EXCESS OF THE AMOUNT AVAILABLE THEREIN. UNLESS SUCH CONTRACT OR OBLIGATION IS AUTHORIZED BY LAW. THAT: IT IS THE ESTABLISHED RULE IN REGARD TO THE USE OF FISCAL YEAR APPROPRIATIONS FOR TRANSPORTATION CHARGES THAT WHERE SUPPLIES ARE PURCHASED F.O.B.

B-114918, JULY 9, 1953, 33 COMP. GEN. 12

APPROPRIATIONS - FISCAL YEAR - PURCHASE AND TRANSPORTATION OF SUPPLIES IN DIFFERENT FISCAL YEARS UNDER THE SURPLUS FUND-CERTIFIED CLAIMS ACT OF 1949, ALL BALANCES OF APPROPRIATIONS CONTAINED IN THE ANNUAL APPROPRIATION BILLS AND MADE SPECIFICALLY FOR THE SERVICE OF ANY FISCAL YEAR SHALL BE APPLIED ONLY TO THE PAYMENT OF EXPENSES PROPERLY INCURRED DURING THAT YEAR, OR TO THE FULFILLMENT OF CONTRACTS PROPERLY MADE WITHIN THAT YEAR, AND THEREFORE, CHARGES FOR TRANSPORTATION OF GOVERNMENT SUPPLIES ARE NOT CHARGEABLE TO THE APPROPRIATION FOR THE FISCAL YEAR IN WHICH THE SUPPLIES ARE PURCHASED IF THE TRANSPORTATION IS PERFORMED IN A SUBSEQUENT FISCAL YEAR AND THE CONTRACT OF TRANSPORTATION IS SEPARATE FROM THE CONTRACT OF PURCHASE.

COMPTROLLER GENERAL WARREN TO THE POSTMASTER GENERAL, JULY 9, 1953:

REFERENCE IS MADE TO YOUR LETTER OF APRIL 21, 1953, SUGGESTING THAT, IN VIEW OF SECTION 3679, REVISED STATUTES, AS RECENTLY AMENDED BY SECTION 1211 OF THE GENERAL APPROPRIATION ACT, 1951, 64 STAT. 765, 31 U.S.C. 665, THE DECISION APPEARING IN 16 COMP. GEN. 843 MIGHT NO LONGER BE FOR APPLICATION.

THE AMENDED STATUTORY PROVISIONS IN QUESTION ARE AS FOLLOWS:

NO OFFICER OR EMPLOYEE OF THE UNITED STATES SHALL MAKE OR AUTHORIZE AN EXPENDITURE FROM OR CREATE OR AUTHORIZE AN OBLIGATION UNDER ANY APPROPRIATION OR FUND IN EXCESS OF THE AMOUNT AVAILABLE THEREIN; NOR SHALL ANY SUCH OFFICER OR EMPLOYEE INVOLVE THE GOVERNMENT IN ANY CONTRACT OR OTHER OBLIGATION, FOR THE PAYMENT OF MONEY FOR ANY PURPOSE, IN ADVANCE OF APPROPRIATIONS MADE FOR SUCH PURPOSE, UNLESS SUCH CONTRACT OR OBLIGATION IS AUTHORIZED BY LAW.

THE DECISION REFERRED TO STATED, IN PART, THAT:

IT IS THE ESTABLISHED RULE IN REGARD TO THE USE OF FISCAL YEAR APPROPRIATIONS FOR TRANSPORTATION CHARGES THAT WHERE SUPPLIES ARE PURCHASED F.O.B. PLACE OF MANUFACTURE, AND TRANSPORTATION IS NOT ORDERED OR ACCOMPLISHED UNTIL THE FOLLOWING FISCAL YEAR, THE TRANSPORTATION COSTS ARE NOT CHARGEABLE TO THE APPROPRIATION FOR THE FISCAL YEAR IN WHICH THE SUPPLIES WERE PURCHASED, BUT TO THE APPROPRIATION FOR THE FISCAL YEAR IN WHICH THE TRANSPORTATION WAS PERFORMED--- THE CONTRACT OF TRANSPORTATION BEING SEPARATE FROM THE CONTRACT OF PURCHASE. 22 COMP. DEC. 349; 1 COMP. GEN. 655; ALSO, A 44780 * * *.

THE REASONS SET FORTH IN YOUR LETTER FOR YOUR VIEW THAT THIS DECISION NOW MAY BE IN CONFLICT WITH THE PROVISIONS OF 31 U.S.C. 665 ARE AS FOLLOWS:

1. THE CURRENT PRACTICE, WHICH IS BASED UPON YOUR DECISIONS, OF PAYING FOR THE PURCHASE IN ONE FISCAL YEAR AND PAYING FOR THE TRANSPORTATION COSTS IN A SUBSEQUENT FISCAL YEAR, IS CONTRARY TO THAT PORTION OF SECTION 3679 OF THE REVISED STATUTES WHICH PROVIDES THAT NO OFFICER OR EMPLOYEE SHALL INVOLVE THE GOVERNMENT IN ANY CONTRACT OR OTHER OBLIGATION FOR THE PAYMENT OF MONEY FOR ANY PURPOSE IN ADVANCE OF THE APPROPRIATIONS MADE FOR SUCH PURPOSE UNLESS SUCH CONTRACT OR OBLIGATION IS AUTHORIZED BY LAW. THE CURRENT PRACTICE COMMITS THE GOVERNMENT TO PAY FOR TRANSPORTATION OUT OF AN APPROPRIATION NOT YET AUTHORIZED. WHEN AN ORDER IS PLACED FOR THE MANUFACTURE OF EQUIPMENT OR SUPPLIES, THE DEPARTMENT AGREES TO PROVIDE TRANSPORTATION. THE DEPARTMENT THUS ASSURES THE MANUFACTURER THAT TRANSPORTATION WILL BE PROVIDED. THIS, AS A COMMITMENT TO RECEIVE AND REMOVE THE THING PURCHASED AT THE SAME TIME THE ORDER IS PLACED, OBLIGATES THE UNITED STATES GOVERNMENT FOR THE COST OF THE TRANSPORTATION; MOREOVER, WITHOUT ANY DOLLAR LIMITATION.

2. IT CAN NOT BE KNOWN WITH CERTAINTY IN ANY ACCOUNTING PERIOD IN THE CURRENT FISCAL YEAR THE TRUE, UNOBLIGATED BALANCE OF THE ALLOTMENTS FOR SUPPLIES AND EQUIPMENT, BECAUSE IT CAN NOT BE ASCERTAINED UNDER THE PRESENT INTERPRETATION WHAT TRANSPORTATION CHARGES HAVE BEEN INCURRED, OR MAY RESULT CURRENTLY FROM CONTRACTUAL ACTIONS IN PAST ACCOUNTING PERIODS, INCLUDING PAST FISCAL YEARS.

3. FUNDS AVAILABLE IN THE CURRENT APPROPRIATION ARE ADEQUATE TO COVER THE TRANSPORTATION OF PURCHASES MADE. HOWEVER, THERE IS NO ASSURANCE THAT ADEQUATE FUNDS WILL BE APPROPRIATED FOR SUBSEQUENT FISCAL YEARS WHEN PURCHASES WILL BE DELIVERED.

AS INDICATED IN 16 COMP. GEN. 843, THE RULE REITERATED THEREIN HAS BEEN IN EFFECT FOR A LONG PERIOD OF TIME AND FOR THAT REASON ALONE SHOULD NOT BE DISTURBED UNLESS REQUIRED BY CHANGES IN THE LAW. BUDGET ESTIMATES FOR TRANSPORTATION COSTS APPLICABLE TO CONTRACT PURCHASES ARE PREPARED AND APPROPRIATIONS FOR SUCH COSTS ARE MADE ON THE BASIS OF THE RULE. THAT BEING TRUE ANY CHANGE IN THE RULE WOULD RESULT IN CONFUSION, TEMPORARILY AT LEAST.

I FIND NOTHING IN SECTION 3679, REVISED STATUTES, 31 U.S.C. 665, AS AMENDED BY THE ACT OF SEPTEMBER 6, 1950, WHICH REQUIRES A CHANGE IN THE ESTABLISHED RULE. THE LANGUAGE PRESENTLY CONTAINED IN 31 U.S.C. 665, INSOFAR AS HERE MATERIAL, IS SUBSTANTIALLY THE SAME AS THAT PREVIOUSLY CONTAINED THEREIN AND APPEARS TO BE NOTHING MORE THAN A RESTATEMENT AND REENACTMENT OF PREVIOUS LAW. SEE IN THIS CONNECTION THE SECTION BY SECTION ANALYSIS OF THE AMENDMENT AS REPORTED IN THE CONGRESSIONAL RECORD, MAY 10, 1950, PAGE 6914. IT IS TRUE THAT GENERALLY TRANSPORTATION EXPENSE IS A NECESSARY INCIDENT OF A CONTRACT OF PURCHASE. HOWEVER, NO TRANSPORTATION EXPENSE IS INCURRED OR LEGALLY OBLIGATED AT THE TIME OF THE PURCHASE NOR HAS A CONTRACT BEEN MADE TO COVER THE TRANSPORTATION SERVICES. SECTION 1 OF THE SURPLUS FUND CERTIFIED CLAIMS ACT OF 1949, 63 STAT. 407, PROVIDES AS FOLLOWS:

THAT, EXCEPT AS OTHERWISE PROVIDED BY LAW, ALL BALANCES OF APPROPRIATIONS CONTAINED IN THE ANNUAL APPROPRIATION BILLS AND MADE SPECIFICALLY FOR THE SERVICE OF ANY FISCAL YEAR SHALL ONLY BE APPLIED TO THE PAYMENT OF EXPENSES PROPERLY INCURRED DURING THAT YEAR, OR TO THE FULFILLMENT OF CONTRACTS PROPERLY MADE WITHIN THAT YEAR.

UNDER THESE PROVISIONS, WHICH SUPPLANTED SECTION 3690, REVISED STATUTES, 31 U.S.C. 712, AN APPROPRIATION NOT CURRENT AT THE TIME THE TRANSPORTATION CHARGES ARE INCURRED OR A CONTRACT FOR SUCH TRANSPORTATION. IN OTHER WORDS, A MERE PURCHASE CONTRACT MAY NOT OF ITSELF BE CONSIDERED AS LEGALLY OBLIGATING THE GOVERNMENT WITH RESPECT TO THE TRANSPORTATION, WHICH IS A SEPARATE TRANSACTION COVERED BY A SEPARATE OBLIGATING INSTRUMENT. ACCORDINGLY, THERE IS PERCEIVED NO LEGAL JUSTIFICATION FOR CHANGING THE RULE IN QUESTION.