B-121982, MARCH 4, 1955, 34 COMP. GEN. 418

B-121982: Mar 4, 1955

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THAT AMOUNT INCREASED OR DECREASED TO REFLECT PRICE REVISIONS AT THE TIME SUCH REVISIONS ARE MADE. OBLIGATIONS AGAINST FISCAL YEAR APPROPRIATIONS BASED ON INTRAGOVERNMENT AGREEMENTS ENTERED INTO PURSUANT TO SECTION 601 OF THE ECONOMY ACT OF 1932 ARE REQUIRED BY SECTION 1210 OF THE GENERAL APPROPRIATION ACT. MILITARY INTERDEPARTMENTAL PROCUREMENT ORDERS ARE ORDERS ISSUED UNDER SECTION 601 OF THE ECONOMY ACT OF 1932. ARE REQUIRED BY SECTION 1210 OF THE GENERAL APPROPRIATION ACT. 1955: REFERENCE IS MADE TO LETTER OF NOVEMBER 2. A CONFERENCE WAS ARRANGED WITH REPRESENTATIVES OF THE DEPARTMENT OF DEFENSE. SUCH VIEWS WERE SUBMITTED AT A LATER CONFERENCE WHEN THE PROPOSED DIRECTIVE WAS AGAIN DISCUSSED WITH YOUR REPRESENTATIVES.

B-121982, MARCH 4, 1955, 34 COMP. GEN. 418

APPROPRIATIONS - OBLIGATION - SECTION 1311, SUPPLEMENTAL APPROPRIATION ACT, 1955 COMMENTS ON PROPOSED DIRECTIVE TO BE ISSUED BY DEPARTMENT OF DEFENSE FOR RECORDING AND REPORTING OBLIGATIONS PURSUANT TO SECTION 1311 OF THE SUPPLEMENTAL APPROPRIATION ACT, 1955. FIXED-PRICE CONTRACTS WITH ESCALATION, PRICE REDETERMINATION, OR INCENTIVE PROVISIONS SHOULD BE RECORDED AS OBLIGATIONS, PURSUANT TO SECTION 1311 OF THE SUPPLEMENTAL APPROPRIATION ACT, 1955, FOR THE AMOUNT OF THE FIXED PRICE STATED IN THE CONTRACT, OR FOR THE TARGET OR BILLING PRICE IN THE CASE OF THE INCENTIVE CLAUSE CONTRACT, AND THAT AMOUNT INCREASED OR DECREASED TO REFLECT PRICE REVISIONS AT THE TIME SUCH REVISIONS ARE MADE; HOWEVER, IN ORDER TO PREVENT VIOLATION OF THE ANTI- DEFICIENCY ACT SUFFICIENT FUNDS SHOULD BE RESERVED TO COVER THE EXCESS OF THE ESTIMATED INCREASES OVER THE DECREASES. LETTER CONTRACTS, LETTERS OF INTENT, AND AMENDMENTS SHOULD BE RECORDED AS OBLIGATIONS PURSUANT TO SECTION 1311 OF THE SUPPLEMENTAL APPROPRIATION ACT, 1955, AT THE MAXIMUM LIABILITY NECESSARY TO COVER EXPENSES INCURRED BY THE CONTRACTOR PRIOR TO THE EXECUTION OF A DEFINITIVE CONTRACT. CONTRACTS WHICH AUTHORIZE VARIATIONS IN THE DELIVERY QUANTITIES SHOULD BE RECORDED AS OBLIGATIONS UNDER SECTION 1311 OF THE SUPPLEMENTAL APPROPRIATION ACT, 1955, FOR THE PRICE OF THE QUANTITY SPECIFIED FOR DELIVERY, EXCLUSIVE OF THE PERMITTED VARIATIONS; HOWEVER, IN ORDER TO PREVENT VIOLATIONS OF THE ANTI-DEFICIENCY ACT, SUFFICIENT FUNDS SHOULD BE RESERVED TO COVER THE EXCESS OF THE ESTIMATED INCREASES OVER DECREASES. AMOUNTS BASED ON WRITTEN INTRAGOVERNMENT AGREEMENTS AUTHORIZED BY LAW FOR SPECIFIC SUPPLIES AND SERVICES MAY BE RECORDED AS OBLIGATIONS UNDER SECTION 1311 OF THE SUPPLEMENTAL APPROPRIATION ACT, 1955; HOWEVER, OBLIGATIONS AGAINST FISCAL YEAR APPROPRIATIONS BASED ON INTRAGOVERNMENT AGREEMENTS ENTERED INTO PURSUANT TO SECTION 601 OF THE ECONOMY ACT OF 1932 ARE REQUIRED BY SECTION 1210 OF THE GENERAL APPROPRIATION ACT, 1951, TO BE DEOBLIGATED AT THE END OF EACH FISCAL YEAR TO THE EXTENT THAT THE PERFORMING OR PROCURING AGENCY HAS NOT INCURRED VALID OBLIGATIONS UNDER SUCH AGREEMENTS. SECTION 1311 OF THE SUPPLEMENTAL APPROPRIATION ACT, 1955, DOES NOT CHANGE THE CRITERIA SET OUT IN 32 COMP. GEN. 436 FOR THE RECORDING OF OBLIGATIONS FOR STOCK ITEMS. MILITARY INTERDEPARTMENTAL PROCUREMENT ORDERS ARE ORDERS ISSUED UNDER SECTION 601 OF THE ECONOMY ACT OF 1932, AND, THEREFORE, ARE REQUIRED BY SECTION 1210 OF THE GENERAL APPROPRIATION ACT, 1951, TO BE DEOBLIGATED AT THE END OF EACH FISCAL YEAR TO THE EXTENT THAT THE PERFORMING OR PROCURING AGENCY HAS NOT INCURRED VALID OBLIGATIONS UNDER SUCH ORDERS. SECTION 1311 OF THE SUPPLEMENTAL APPROPRIATION ACT, 1955, DOES NOT CHANGE THE EXISTING RULES ESTABLISHED BY DECISIONS OF THE GENERAL ACCOUNTING OFFICE FOR DETERMINING THE APPROPRIATION OBLIGATION FOR TRAVEL, TRANSPORTATION AND RELATED EXPENSES.

COMPTROLLER GENERAL CAMPBELL TO THE SECRETARY OF DEFENSE, MARCH 4, 1955:

REFERENCE IS MADE TO LETTER OF NOVEMBER 2, 1954, FROM THE ASSISTANT SECRETARY OF DEFENSE ( COMPTROLLER), REQUESTING OUR COMMENTS AND CONCURRENCE CONCERNING A PROPOSED DEPARTMENT OF DEFENSE DIRECTIVE PROVIDING THE PREREQUISITES TO THE RECORDING AND REPORTING OF OBLIGATIONS AGAINST APPROPRIATIONS OF THE DEPARTMENT OF DEFENSE UNDER THE PROVISIONS OF SECTION 1311 OF THE SUPPLEMENTAL APPROPRIATION ACT, 1955, PUBLIC LAW 663, APPROVED AUGUST 26, 1954, 68 STAT. 800, 830, (HEREINAFTER REFERRED TO AS SECTION 1311).

AS REQUESTED IN THE ASSISTANT SECRETARY'S LETTER, A CONFERENCE WAS ARRANGED WITH REPRESENTATIVES OF THE DEPARTMENT OF DEFENSE. AS A RESULT OF SOME DIFFERENCE OF VIEWS, THEY REQUESTED THAT OUR REPLY BE HELD IN ABEYANCE PENDING THE SUBMISSION OF THEIR VIEWS IN WRITING. SUCH VIEWS WERE SUBMITTED AT A LATER CONFERENCE WHEN THE PROPOSED DIRECTIVE WAS AGAIN DISCUSSED WITH YOUR REPRESENTATIVES.

WHILE IT IS NOT OUR FUNCTION TO REVIEW ADMINISTRATIVE REGULATIONS IN ADVANCE OF THEIR ISSUANCE, THE OPPORTUNITY TO FURNISH COMMENTS IN THIS PARTICULAR CASE IS APPRECIATED SINCE THE SUBJECT MATTER IS SO CLOSELY RELATED TO OUR FUNCTIONS. WE CONCUR IN THE ISSUANCE OF THIS PROPOSED DIRECTIVE SUBJECT TO THE FOLLOWING COMMENTS AND BELIEVE THAT THE DIRECTIVE, IF REVISED ACCORDINGLY, WILL FORM A GUIDE BY WHICH THE MILITARY DEPARTMENTS CAN RECORD AND REPORT OBLIGATIONS ON A SOUND AND UNIFORM BASIS. YOU WILL UNDERSTAND, HOWEVER, THAT THIS CONCURRENCE IS AS TO THE GENERAL APPROACH SINCE, IN THE FINAL ANALYSIS, THE VALIDITY OF OBLIGATIONS AND EXPENDITURES WILL HAVE TO BE DETERMINED UPON THE BASIS OF THE LAW AND FACTS IN EACH INDIVIDUAL CASE.

SECTION 1311, 68 STAT. 830, PROVIDES, IN PERTINENT PART, AS FOLLOWS:

SEC. 1311. (A) AFTER THE DATE OF ENACTMENT HEREOF NO AMOUNT SHALL BE RECORDED AS AN OBLIGATION OF THE GOVERNMENT OF THE UNITED STATES UNLESS IT IS SUPPORTED BY DOCUMENTARY EVIDENCE OF---

(1) A BINDING AGREEMENT IN WRITING BETWEEN THE PARTIES THERETO, INCLUDING GOVERNMENT AGENCIES, IN A MANNER AND FORM AND FOR A PURPOSE AUTHORIZED BY LAW, EXECUTED BEFORE THE EXPIRATION OF THE PERIOD OF AVAILABILITY FOR OBLIGATION OF THE APPROPRIATION OR FUND CONCERNED FOR SPECIFIC GOODS TO BE DELIVERED, REAL PROPERTY TO BE PURCHASED OR LEASED, OR WORK OR SERVICES TO BE PERFORMED; OR

(2) A VALID LOAN AGREEMENT, SHOWING THE AMOUNT OF THE LOAN TO BE MADE AND THE TERMS OF REPAYMENT THEREOF; OR

(3) AN ORDER REQUIRED BY LAW TO BE PLACED WITH A GOVERNMENT AGENCY; OR

(4) AN ORDER ISSUED PURSUANT TO A LAW AUTHORIZING PURCHASES WITHOUT ADVERTISING WHEN NECESSITATED BY PUBLIC EXIGENCY OR FOR PERISHABLE SUBSISTENCE SUPPLIES OR WITHIN SPECIFIC MONETARY LIMITATIONS; OR

(5) A GRANT OR SUBSIDY PAYABLE (I) FROM APPROPRIATIONS MADE FOR PAYMENT OF OR CONTRIBUTIONS TOWARD, SUMS REQUIRED TO BE PAID IN SPECIFIC AMOUNTS FIXED BY LAW OR IN ACCORD WITH FORMULAE PRESCRIBED BY LAW, OR (II) PURSUANT TO AGREEMENT AUTHORIZED BY, OR PLANS APPROVED IN ACCORD WITH AND AUTHORIZED BY, LAW; OR

(6) A LIABILITY WHICH MAY RESULT FROM PENDING LITIGATION BROUGHT UNDER AUTHORITY OF LAW; OR

(7) EMPLOYMENT OR SERVICES OF PERSONS OR EXPENSES OF TRAVEL IN ACCORD WITH LAW, AND SERVICES PERFORMED BY PUBLIC UTILITIES; OR

(8) ANY OTHER LEGAL LIABILITY OF THE UNITED STATES AGAINST AN APPROPRIATION OR FUND LEGALLY AVAILABLE THEREFOR.

(D) NO APPROPRIATION OR FUND WHICH IS LIMITED FOR OBLIGATION PURPOSES TO A DEFINITE PERIOD OF TIME SHALL BE AVAILABLE FOR EXPENDITURE AFTER THE EXPIRATION OF SUCH PERIOD EXCEPT FOR LIQUIDATION OF AMOUNTS OBLIGATED IN ACCORD WITH SUBSECTION (A) HEREOF; BUT NO SUCH APPROPRIATION OR FUND SHALL REMAIN AVAILABLE FOR EXPENDITURE FOR ANY PERIOD BEYOND THAT OTHERWISE AUTHORIZED BY LAW.

THE SECTIONS OF THE PROPOSED DIRECTIVE ARE CONSIDERED IN THE ORDER CONTAINED IN THE DIRECTIVE.

SECTION 3. IT IS SUGGESTED THAT THE TERM "TECHNICAL SERVICE" BE INSERTED AFTER THE WORD BUREAU" IN THE DEFINITION OF THE TERM "COMPONENT OF THE DEPARTMENT OF DEFENSE.'

SECTION 4A (1). SUBSECTION (B) PROVIDES THAT UNDER FIXED-PRICE CONTRACTS WITH ESCALATION, PRICE REDETERMINATION, OR INCENTIVE PROVISIONS, OBLIGATIONS SHALL BE RECORDED FOR THE AMOUNT OF THE FIXED PRICE STATED IN THE CONTRACT, OR THE TARGET OR BILLING PRICE IN THE CASE OF A CONTRACT WITH AN INCENTIVE CLAUSE, AND THAT THE AMOUNT SO RECORDED SHALL BE INCREASED OR DECREASED TO REFLECT PRICE REVISIONS AT THE TIME THAT SUCH REVISIONS ARE MADE OR DETERMINED PURSUANT TO PROVISIONS OF THE CONTRACT. IT IS ASSUMED THAT NONE OF THESE CONTRACTS WITH INCENTIVE CLAUSES WILL HAVE BOTH A TARGET PRICE AND A BILLING PRICE. WHILE WE HAVE NO OBJECTION TO THE RECORDING OF OBLIGATIONS UPON THAT BASIS, SUCH PRACTICE MIGHT WELL RESULT IN A VIOLATION OF SECTION 3679, REVISED STATUTES, AS AMENDED, 31 U.S.C. 665, UNLESS APPROPRIATE SAFEGUARDS ARE PROVIDED EITHER IN THIS PROPOSED DIRECTIVE OR IN THE ADMINISTRATIVE REGULATIONS ISSUED UNDER THE LATTER ACT WITH THE CONCURRENCE OF THE DIRECTOR OF THE BUREAU OF THE BUDGET. SUCH SAFEGUARDS NORMALLY WOULD CONSIST OF ADMINISTRATIVE RESERVATIONS OF SUFFICIENT FUNDS TO COVER AT LEAST THE EXCESS OF THE ESTIMATED INCREASES OVER THE DECREASES.

SUBSECTION (E) PROVIDES GENERALLY THAT THE OBLIGATIONS UNDER LETTER CONTRACTS, LETTERS OF INTENT, AND AMENDMENTS THERETO, SHALL BE RECORDED IN THE AMOUNT STATED AS THE MAXIMUM LIABILITY UNDER SUCH LETTER OR AMENDMENTS. IT IS SUGGESTED THAT THE FOLLOWING AMENDMENT BE INSERTED IMMEDIATELY PRIOR TO THE LAST SENTENCE IN THIS SECTION:

THE MAXIMUM LIABILITY SHOWN WILL BE THAT AMOUNT NECESSARY TO COVER EXPENSES TO BE INCURRED BY THE CONTRACTOR PRIOR TO THE EXECUTION OF A DEFINITIVE CONTRACT. LETTER CONTRACTS AND LETTERS OF INTENT SHALL BE CONVERTED TO DEFINITIVE CONTRACTS WITHIN A REASONABLE PERIOD OF TIME AS DEFINED BY REGULATIONS.

SUBSECTION (F) PROVIDES THAT OBLIGATIONS UNDER CONTRACTS AUTHORIZING VARIATIONS IN QUANTITIES TO BE DELIVERED SHALL BE RECORDED FOR THE PRICE OF THE QUANTITY SPECIFIED FOR DELIVERY, EXCLUSIVE OF THE PERMITTED VARIATIONS. WHAT IS STATED ABOVE UNDER SUBSECTION (B) WITH RESPECT TO THE POSSIBILITY OF VIOLATIONS OF SECTION 3679, REVISED STATUTES, IS EQUALLY APPLICABLE HERE.

SUBSECTION (G) PROVIDES THAT OBLIGATIONS SHALL BE RECORDED IN THE AMOUNT OF THE LIABILITY FOR THE CURRENT MONTHLY PERIOD, EXCEPT THAT WHERE THE LIABILITY UNDER THE TERMS OF THE LEASE IS FOR A LONGER PERIOD, THE AMOUNT OF SUCH GREATER LIABILITY SHALL BE RECORDED. WHILE WE HAVE NO OBJECTION TO THE RECORDING OF AN OBLIGATION COVERING THE LIABILITY UNDER A LEASE FOR A LONGER PERIOD THAN THE CURRENT MONTHLY PERIOD, IT IS NOTED THAT SECTION 22 OF BUDGET-TREASURY REGULATION NO. 1 PROVIDES FOR THE INCLUSION OF AMOUNTS ACCRUED FOR THE USE OF PROPERTY DURING ONLY THE CURRENT REPORTING PERIOD FOR REPORTING PURPOSES.

SECTION 4A (2). INTRAGOVERNMENT AGREEMENTS. AGREEMENTS IN WRITING BETWEEN GOVERNMENT AGENCIES COMPLYING WITH THE REQUIREMENTS OF SECTION 1311 (A) (1) ARE AUTHORIZED TO BE RECORDED AS OBLIGATIONS BY THAT SECTION. HOWEVER, SECTION 1311 NEITHER AUTHORIZES THE ENTERING INTO OF INTRAGOVERNMENT AGREEMENTS NOR DOES IT AFFECT ANY OTHER PROVISION OF LAW RELATING TO INTRAGOVERNMENT AGREEMENTS OTHER THAN POSSIBLY TO THE EXTENT IT REQUIRES SUCH AGREEMENTS TO BE FOR SPECIFIC GOODS, ETC., AND IN WRITING. THE GENERAL AUTHORITY RELIED UPON BY MOST AGENCIES FOR INTRAGOVERNMENT AGREEMENTS IS SECTION 601 OF THE ECONOMY ACT OF 1932, 47 STAT. 417, AS AMENDED, 31 U.S.C. 686. WHILE THERE MAY BE RECORDED OBLIGATIONS BASED UPON AGREEMENTS ENTERED INTO UNDER THAT PROVISION OF LAW IF THE AGREEMENTS COMPLY WITH SECTION 1311 (A) (1), 68 STAT. 830, SUCH OBLIGATIONS AGAINST FISCAL YEAR APPROPRIATIONS ARE REQUIRED BY SECTION 1210 OF THE GENERAL APPROPRIATION ACT, 1951, PUBLIC LAW 759, APPROVED SEPTEMBER 6, 1950, 64 STAT. 765, TO BE DEOBLIGATED AT THE END OF EACH FISCAL YEAR TO THE EXTENT THAT THE PERFORMING OR PROCURING AGENCY HAS NOT INCURRED VALID OBLIGATIONS UNDER THE AGREEMENT. IT THEREFORE BECOMES NECESSARY IN EACH CASE TO DETERMINE UNDER WHAT STATUTORY AUTHORITY THE REQUESTING OR ORDERING AGENCY ENTERS INTO THE INTRAGOVERNMENT AGREEMENTS.

PROJECT ORDERS. PROJECT ORDERS ARE ISSUED UNDER THE PROVISIONS OF LAW CODIFIED IN 41 U.S.C. 23 AND, THEREFORE, ARE NOT AFFECTED BY SECTION 1210 OF THE GENERAL APPROPRIATION ACT, 1951.

STOCK ITEMS. IT IS STATED IN THE CORRESPONDENCE FURNISHED BY YOUR REPRESENTATIVES THAT THERE ARE LITERALLY TENS OF THOUSANDS OF TRANSACTIONS DAILY WITHIN THE ESTABLISHMENT INVOLVING THE USE OF STOCK FUNDS AND THAT TO REQUIRE ACCEPTANCE OF EACH ORDER FOR ITEMS TO BE DELIVERED FROM STOCK WOULD RESULT IN ADDITIONAL UNNECESSARY PAPER WORK AND CREATE ACCOUNTING DIFFICULTIES. IN VIEW THEREOF AND SINCE THERE IS NO INDICATION OF ANY SPECIFIC OBJECTION BY THE CONGRESS TO THE CRITERIA SET OUT IN OUR DECISION OF APRIL 7, 1953, B-114578, 32 COMP. GEN. 436, FOR THE RECORDING OF OBLIGATIONS FOR SUPPLIES, MATERIAL OR EQUIPMENT TO BE FURNISHED FROM STOCK, WE WILL NOT REQUIRE ACCEPTANCE OF ORDERS FOR COMMON-USE STOCK ITEMS WHICH ARE ON HAND OR ON ORDER AND WILL BE DELIVERED PROMPTLY. SUCH ORDERS OTHERWISE AND ALL OTHER ORDERS FOR ITEMS TO BE DELIVERED FROM MILITARY STOCKS MUST MEET ALL OF THE REQUIREMENTS OF SECTION 1311 (A) (1).

MILITARY INTERDEPARTMENTAL PROCUREMENT ORDERS. IT IS FURTHER CONTENDED BY REPRESENTATIVES OF YOUR DEPARTMENT THAT MILITARY INTERDEPARTMENTAL PROCUREMENT ORDERS (HEREINAFTER REFERRED TO AS MIPR S) ARE ISSUED UNDER PROVISIONS OF LAW PECULIAR TO THE DEPARTMENT OF DEFENSE RATHER THAN UNDER THE PROVISIONS OF SECTION 601 OF THE ECONOMY ACT. REFERENCE IS MADE TO THE NATIONAL SECURITY ACT OF 1947, AS AMENDED, SECTION 10 OF THE ARMED SERVICES PROCUREMENT ACT (41 U.S.C. 159) AND SECTION 638 OF THE DEPARTMENT OF DEFENSE APPROPRIATION ACT, 1953 (41 U.S.C. 162).

WHILE THE TERM "INCLUDING GOVERNMENT AGENCIES" WAS INSERTED IN THE PROPOSED SECTION 1311 (A) (1) TO PERMIT MIPR-S, AMONG OTHER INTERAGENCY AGREEMENTS, TO BE RECORDED AS OBLIGATIONS, IT WAS NOT INTENDED THEREBY TO PERMIT SUCH FUNDS TO REMAIN AVAILABLE INDEFINITELY TO THE PROCURING AGENCY FOR THE EXECUTION OF PROCUREMENT CONTRACTS. TO THE CONTRARY, IT WAS INTENDED TO REMOVE ANY DOUBT THAT SUCH ORDERS, AS OTHER ORDERS ISSUED UNDER SECTION 601 OF THE ECONOMY ACT, COULD BE RECORDED AS OBLIGATIONS BUT THE PROCURING AGENCY WAS TO HAVE NO LONGER PERIOD TO EXECUTE THE PROCUREMENT CONTRACTS THAN THE AGENCY ISSUING THE ORDERS WOULD HAVE HAD IF IT HAD DONE THE PROCURING. THE PROVISIONS OF LAW RELIED UPON BY YOUR DEPARTMENT, WHICH ARE CITED ABOVE, ARE VIEWED AS HAVING BEEN ENACTED MERELY TO REQUIRE THE MILITARY DEPARTMENTS TO EXERCISE AUTHORITY THEY ALREADY HAD TO CONSOLIDATE PROCUREMENT REQUIREMENTS. THIS COULD HAVE BEEN ACCOMPLISHED BY THE MILITARY DEPARTMENTS UNDER SECTION 601 OF THE ECONOMY ACT PRIOR TO THE ENACTMENT OF THOSE PROVISIONS OF LAW. SUCH PROVISIONS OF LAW EXTENDED THE EXISTING AUTHORITY OF THE MILITARY DEPARTMENTS TO THE SECRETARY OF DEFENSE AND DIRECTED THAT PROCUREMENT REQUIREMENTS BE CONSOLIDATED TO THE EXTENT DEEMED FEASIBLE. WE THUS FEEL THAT WE ARE CONSTRAINED TO HOLD THAT MIPR'S ARE ISSUED UNDER SECTION 601 OF THE ECONOMY ACT, AS AMENDED, AND, THEREFORE, ARE SUBJECT TO THE PROVISIONS OF SECTION 1210 OF THE GENERAL APPROPRIATION ACT, 1951.

IN ADDITION TO THE REVISION OF SECTION 4A (2) TO CONFORM WITH THE PRINCIPLES STATED ABOVE, THE FOLLOWING SUGGESTIONS ARE MADE FOR YOUR CONSIDERATION:

THE FIRST PARAGRAPH MIGHT BE REVISED AS FOLLOWS:

ORDERS AUTHORIZED BY LAW TO BE ISSUED FOR SPECIFIC SUPPLIES, MATERIAL, EQUIPMENT, WORK, OR SERVICES UNDER THE ACTS OF JUNE 5, 1920 AND JULY 1, 1922 (41 U.S.C. 23); SECTION 601 OF THE ECONOMY ACT OF 1932 (31 U.S.C. 686); AND OTHER SIMILAR AUTHORITY SHALL BE RECORDED AS OBLIGATIONS AGAINST THE APPROPRIATION OF THE ORDERING AGENCY AS FOLLOWS:

SUBSECTION (A) PROVIDES THAT PROJECT ORDERS ON ANY COMPONENT OF THE DEPARTMENT OF DEFENSE OR OF ANOTHER GOVERNMENT AGENCY SHALL BE RECORDED AS OBLIGATIONS IN THE AMOUNT STATED IN THE ORDER WHEN ACCEPTED IN WRITING THIS SUBSECTION SHOULD BE RESTRICTED TO PROJECT ORDERS PLACED WITH " GOVERNMENT-OWNED ESTABLISHMENTS" AS THAT TERM IS USED IN 41 U.S.C. 23.

IT IS SUGGESTED THAT THE LAST TWO LINES OF SUBSECTION (E) BE DELETED AND THE FOLLOWING SUBSTITUTED THEREFOR:

IN ACCORDANCE WITH THE PROVISIONS OF THE COMPTROLLER GENERAL'S DECISION OF APRIL 7, 1953 (32 COMP. GEN. 436) AND DOD DIRECTIVE NUMBER 7220.2, DATED 29 APRIL 1953 ENTITLED " OBLIGATIONS FOR MATERIAL TO BE DELIVERED FROM STOCK.'

SECTION 4B. LOAN AGREEMENTS. IT IS SUGGESTED THAT THE CLAUSE "SHOWING THE AMOUNT OF THE LOAN TO BE MADE AND THE TERMS OF REPAYMENT THEREOF" BE INSERTED IN THE FIRST SENTENCE AFTER THE WORD ,AGREEMENTS.' SECTION 4D. PURCHASE ORDERS. IT IS SUGGESTED THAT THE CLAUSE "ISSUED PURSUANT TO A LAW AUTHORIZING PURCHASES WITHOUT ADVERTISING" BE INSERTED AFTER THE WORD "SERVICES" IN THE SECOND LINE.

SECTION 4F. LIABILITY UNDER PENDING LITIGATION. THE LAST SENTENCE OF THIS SECTION--- " ANY DEFICIENCY JUDGMENT ENTERED SUBSEQUENT TO THE DECLARATION OF TAKING SHALL BE RECORDED AS AN OBLIGATION OF THE THEN CURRENT APPROPRIATION AVAILABLE FOR SUCH PURPOSE"--- SHOULD BE REVISED TO CONFORM WITH OFFICE DECISIONS OF FEBRUARY 18, 1939, A-89617, 17 COMP. GEN. 664, AND AUGUST 13, 1954, B-120930, 34 COMP. GEN. 67, WHICH HOLD THAT APPROPRIATIONS FOR LAND ACQUISITION UNDER CONDEMNATION PROCEEDINGS BECOME OBLIGATED AT THE TIME THE ATTORNEY GENERAL IS REQUESTED TO INSTITUTE THE PROCEEDINGS.

SECTION 4G. PERSONAL SERVICES, TRAVEL, AND PUBLIC UTILITIES SERVICES. IT IS SUGGESTED THAT THE FOLLOWING BE ADDED IMMEDIATELY AFTER THE CAPTIONED HEADING SO AS TO CLARIFY THE AREA OR LEVEL OF RESPONSIBILITY AT WHICH THE ADMINISTRATIVE DETERMINATION SHALL BE MADE FOR BOTH (A) NONMILITARY, AND (B) MILITARY:

WRITTEN ADMINISTRATIVE DETERMINATIONS AS PROVIDED UNDER THE FOLLOWING SERVICES SHALL BE MADE BY THE ALLOTTEE OR SUCH OFFICERS AND EMPLOYEES OF THE DEPARTMENT OF DEFENSE WHO ARE AUTHORIZED TO OBLIGATE AND EXPEND FUNDS IN ACCORDANCE WITH THE PROVISIONS OF SECTION 3679 OF THE REVISED STATUTES (31 U.S.C. 665), AS AMENDED, AND DOD DIRECTIVE NO. 7200.1, DATED 20 MARCH 1952:

SUBSECTION (2) PROVIDES GENERALLY FOR THE RECORDING OF OBLIGATIONS FOR EXPENSES OF TRAVEL IN ACCORDANCE WITH WRITTEN ADMINISTRATIVE DETERMINATIONS BASED UPON TRAVEL AUTHORIZATIONS ISSUED, ESTIMATED TRANSPORTATION TO BE PURCHASED, ESTIMATED ANTICIPATED REIMBURSEMENTS TO BE EARNED BY EMPLOYEES AND OTHERS FOR PER DIEM ALLOWANCES, FOR USE OF PRIVATELY-OWNED VEHICLES AND FOR INCIDENTAL TRAVEL EXPENSES FOR THE MONTHLY REPORTING PERIOD. AS YOU KNOW, THE RULES ESTABLISHED BY PRIOR DECISIONS OF THIS OFFICE FOR DETERMINING WHEN AN OBLIGATION IS INCURRED FOR THE VARIOUS TYPES OF TRAVEL AND RELATED EXPENSES, PARTICULARLY AS TO WHICH FISCAL YEAR APPROPRIATION IS CHARGEABLE, VARY IN ACCORDANCE WITH THE LAW AND FACTS INVOLVED IN EACH TYPE OF EXPENSE. THERE IS NO DOUBT THAT THE CONGRESS, IN ENACTING SECTION 1311, HAD NO SPECIFIC INTENT TO RELAX ANY OF THESE RULES. ACCORDINGLY, THIS SUBSECTION SHOULD BE CLARIFIED TO GIVE EFFECT TO THE EXISTING RULES FOR OBLIGATING APPROPRIATIONS FOR TRAVEL AND RELATED EXPENSES, EXCEPT AS THEY MAY HAVE BEEN CHANGED BY STATUTE, SUCH AS SECTION 604 OF THE DEPARTMENT OF DEFENSE APPROPRIATION ACT, 1954, 67 STAT. 349.

SECTION 4H. OTHER LEGAL LIABILITIES. SUBSECTION 1311 (A) (8) REFERS TO LEGAL LIABILITIES OF THE UNITED STATES UNDER LEGALLY AVAILABLE APPROPRIATIONS WHICH ARE NOT COVERED BY THE PRIOR SUBSECTIONS (A) (1) THROUGH (A) (7). IN ORDER FOR ORDERS PLACED WITH REVOLVING FUNDS REFERRED TO IN SUBSECTION 4H (1) OF THE PROPOSED DIRECTIVE TO BE RECORDED AS OBLIGATIONS, THEY MUST MEET THE REQUIREMENTS OF SECTION 1311 (A) (1), EXCEPT CERTAIN ORDERS REQUIRED BY LAW TO BE PLACED WITH THE GENERAL SUPPLY FUND, GENERAL SERVICES ADMINISTRATION, WHICH ARE AUTHORIZED TO BE RECORDED AS OBLIGATIONS BY SECTION 1311 (A) (3). THE PURCHASE ORDERS REFERRED TO IN SECTION 4H (6) MAY NOT BE RECORDED AS OBLIGATIONS UNLESS THEY MEET THE REQUIREMENTS OF SUBSECTIONS (A) (1) OR (A) (4) OF SECTION 1311.

SECTION 5. THE LAST SENTENCE IN THIS SECTION PROVIDING THAT THE "RESTRICTION CONTAINED IN SECTION 1311 (D) ON EXPENDITURES SHALL APPLY ONLY TO OBLIGATIONS INCURRED SUBSEQUENT TO JUNE 30, 1954," SHOULD BE REVISED TO READ " THE RESTRICTION CONTAINED IN SECTION 1311 (D) ON EXPENDITURES SHALL NOT APPLY TO OBLIGATIONS RECORDED PRIOR TO JUNE 30, 1954, WHICH HAVE SINCE BECOME LEGAL LIABILITIES OF THE GOVERNMENT.'