B-123003, MARCH 18, 1955, 34 COMP. GEN. 452

B-123003: Mar 18, 1955

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EXCHANGE OR SALE OF USED EQUIPMENT - APPLICATION OF PROCEEDS FOR PURCHASE OF NEW PARTS PROCEEDS FROM THE SALE OF A MOTOR GENERATOR THAT IS A PART OF AN ASSEMBLED MELTING UNIT USED BY THE MINT MAY BE APPLIED TOWARD THE PURCHASE OF NEW PARTS FOR THE UNIT IN ACCORDANCE WITH SECTION 201 (C) OF THE FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT OF 1949. 1955: REFERENCE IS MADE TO YOUR LETTER OF FEBRUARY 17. IT IS EXPLAINED THAT THE MOTOR-GENERATOR SET ORIGINALLY WAS PURCHASED BY THE MINT AT PHILADELPHIA. FURTHER EXPANSION OF HIGH-FREQUENCY MELTING FACILITIES WAS CONTEMPLATED. IT IS STATED. THAT BECAUSE OF RECENT TECHNOLOGICAL DEVELOPMENTS CONDITIONS HAVE CHANGED AND THE ABOVE NEEDS HAVE BEEN MET BY THE INSTALLATION OF A DIFFERENT TYPE OF MELTING EQUIPMENT.

B-123003, MARCH 18, 1955, 34 COMP. GEN. 452

EXCHANGE OR SALE OF USED EQUIPMENT - APPLICATION OF PROCEEDS FOR PURCHASE OF NEW PARTS PROCEEDS FROM THE SALE OF A MOTOR GENERATOR THAT IS A PART OF AN ASSEMBLED MELTING UNIT USED BY THE MINT MAY BE APPLIED TOWARD THE PURCHASE OF NEW PARTS FOR THE UNIT IN ACCORDANCE WITH SECTION 201 (C) OF THE FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT OF 1949, AND REGULATIONS PROMULGATED THEREUNDER; HOWEVER, THE PROCEEDS MAY NOT BE USED FOR THE REMOVAL, MODIFICATION, INSTALLATION, OR ASSEMBLY COSTS OF THE MELTING UNITS.

COMPTROLLER GENERAL CAMPBELL TO THE SECRETARY OF THE TREASURY, MARCH 18, 1955:

REFERENCE IS MADE TO YOUR LETTER OF FEBRUARY 17, 1954, REQUESTING A DECISION WHETHER FUNDS REALIZED FROM THE SALE OF A HIGH-FREQUENCY MOTOR GENERATOR SET MAY BE USED FOR THE PURCHASE OF PARTS AND THE EXPENSE OF MODERNIZING TWO HIGH-FREQUENCY MELTING UNITS.

IT IS EXPLAINED THAT THE MOTOR-GENERATOR SET ORIGINALLY WAS PURCHASED BY THE MINT AT PHILADELPHIA, PENNSYLVANIA, FOR USE IN THE EVENT OF FAILURE OF ONE OR BOTH OF TWO SMALLER MOTOR-GENERATOR SETS IN CURRENT USE IN THE MELTING UNITS. AT THE TIME, FURTHER EXPANSION OF HIGH-FREQUENCY MELTING FACILITIES WAS CONTEMPLATED. IT IS STATED, HOWEVER, THAT BECAUSE OF RECENT TECHNOLOGICAL DEVELOPMENTS CONDITIONS HAVE CHANGED AND THE ABOVE NEEDS HAVE BEEN MET BY THE INSTALLATION OF A DIFFERENT TYPE OF MELTING EQUIPMENT. IT IS FURTHER STATED THAT A DECISION WAS MADE TO SELL THE MOTOR-GENERATOR SET AND APPLY THE PROCEEDS TO THE PURCHASE OF NEW PARTS FOR THE TWO EXISTING MELTING UNITS WHICH CHANGES WILL BRING ABOUT A SUBSTANTIAL REDUCTION IN THE COST OF PRODUCING COINS. THE PROPOSED CONVERSION OF THE TWO UNITS IS STATED TO CONSIST OF THE REMOVAL AND MODIFICATION OF CERTAIN PARTS; THE REPLACEMENT OF CERTAIN PARTS OF OUTMODED DESIGN WITH NEW PARTS OF MODERN DESIGN AND GREATLY INCREASED CAPACITY; AND THE ASSEMBLY OF THE MODIFIED UNITS WITH THE NEW AND ALTERED PARTS SO AS TO DECREASE THE NUMBER OF MELTING STATIONS ON EACH MELTING UNIT FROM FOUR TO THREE AND OBTAIN A PROPORTIONATE INCREASE IN THE POWER TO EACH MELTING STATION.

SECTION 201 (C) OF THE FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT OF 1949, 63 STAT. 384, AS AMENDED, 40 U.S.C. 481 (C), PROVIDES AS FOLLOWS:

(C) IN ACQUIRING PERSONAL PROPERTY, ANY EXECUTIVE AGENCY, UNDER REGULATIONS TO BE PRESCRIBED BY THE ADMINISTRATOR, MAY EXCHANGE OR SELL SIMILAR ITEMS AND MAY APPLY THE EXCHANGE ALLOWANCE OR PROCEEDS OF SALE AND IN SUCH CASES IN WHOLE OR IN PART PAYMENT FOR THE PROPERTY ACQUIRED: PROVIDED, THAT ANY TRANSACTION CARRIED OUT UNDER THE AUTHORITY OF THIS SUBSECTION SHALL BE EVIDENCED IN WRITING.

SECTION 4 (B) OF THE GENERAL SERVICES ADMINISTRATION PERSONAL PROPERTY MANAGEMENT REGULATION NO. 6, REVISED SEPTEMBER 7, 1951, ISSUED PURSUANT TO THE AUTHORITY CONTAINED IN THE SAID SECTION 201 (C), PROVIDES THAT ITEMS SHALL BE DEEMED "SIMILAR" WHEN:

(1) THEY ARE SUBSTANTIALLY ALIKE IN ALL MATERIAL ASPECTS AND CHARACTERISTICS, EXCLUDING, HOWEVER, CONDITION, YEAR, MODEL, SIZE OR CAPACITY, AND MANUFACTURER; OR

(3) THEY CONSTITUTE PARTS OF OR FOR ASSEMBLED ITEMS, OR CONTAINERS FOR ITEMS, WHICH ITEMS ARE SIMILAR WITHIN THE MEANING OF PARAGRAPH (1) OR (2) OF THIS SUBSECTION.

WHETHER THE PROCEEDS OF THE SALE ARE AVAILABLE FOR THE PURPOSE SPECIFIED IN SECTION 201 (C) OF THE ACT APPEARS TO DEPEND UPON WHETHER THE MOTOR- GENERATOR SET IS A PART OF AN ASSEMBLED ITEM UNDER PART (3) OF THE REGULATION OR WHETHER IT IS A SEPARATE ITEM. IF THE GENERATOR IS A SEPARATE ITEM UNDER PART (1) OF THE REGULATION, THE PROCEEDS OF ITS SALE WOULD NOT BE AVAILABLE FOR PROCUREMENT OF PARTS FOR THE TWO MELTING UNITS, THE GENERATOR AND NEW PARTS NOT BEING SUBSTANTIALLY ALIKE. ON THE OTHER HAND, IF THE GENERATOR IS A PART OF OR FOR AN ASSEMBLED ITEM UNDER PART (3) OF THE REGULATION, THE USE OF ITS PROCEEDS OF SALE WOULD BE AUTHORIZED FOR NEW PARTS OF THE MELTING UNITS WHICH ITEMS WOULD CONTINUE TO BE SUBSTANTIALLY SIMILAR WITHIN THE MEANING OF PARAGRAPH (1) OF THE REGULATION.

IT IS EXPLAINED IN YOUR LETTER THAT THE HIGH-FREQUENCY MOTOR GENERATOR THAT WAS SOLD PRODUCED 960 CYCLE CURRENT WHICH CANNOT BE CONVEYED GREAT DISTANCES BECAUSE OF HIGH LINE LOSSES BUT MUST BE CLOSE COUPLED TO PARTS OF A HIGH-FREQUENCY INDUCTION UNIT, AND CAN BE USED SOLELY FOR THE PURPOSE OF HIGH-FREQUENCY INDUCTION MELTING OR HEATING. IN VIEW OF SUCH EXPLANATION, AND CONSIDERING THAT THE GENERATOR WAS PROCURED FOR USE IN THE MELTING UNITS, IT REASONABLY APPEARS THAT THE MOTOR-GENERATOR CONSTITUTES A PART OF OR FOR AN ASSEMBLED UNIT AND, CONSEQUENTLY, THE PROCEEDS OF THE SALE THEREOF MAY BE APPLIED TOWARD THE PURCHASE OF OTHER PARTS FOR SUCH UNIT UNDER PARAGRAPH 3 OF THE REGULATION. CF. 23 COMP. GEN. 931. THERE APPEARS, HOWEVER, TO BE NO AUTHORITY WHEREBY THE PROCEEDS OF THE SALE OF THE GENERATOR OTHERWISE MIGHT BE APPLIED TOWARD THE COST OF MODERNIZATION OF THE HIGH-FREQUENCY MELTING UNITS. IN OTHER WORDS THE PROCEEDS OF SALE ARE AVAILABLE SOLELY FOR THE COSTS OF THE NEW PARTS ACQUIRED AND MAY NOT BE USED FOR ANY REMOVAL, MODIFICATION, INSTALLATION OR ASSEMBLY COSTS.