B-125675, NOV. 3, 1955

B-125675: Nov 3, 1955

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YOU ARE AUTHORIZED TO ENTER INTO A FIXED PRICE CONTRACT WITH MR. AT THE TIME OF HIS EMPLOYMENT THE UNDERSTANDING WAS THAT HE WOULD BE COMPENSATED AT THE RATE OF $50 PER DAY PLUS A PER DIEM SUBSISTENCE ALLOWANCE OF $9 IN LIEU OF "OUT OF POCKET" EXPENSES. HOLDING THAT AN EXPERT EMPLOYED BY THE DEPARTMENT OF COMMERCE ON A FULL- TIME BASIS COULD NOT BE PAID THE PER DIEM IN LIEU OF SUBSISTENCE ALLOWANCE AS IS ALLOWED IN THE CASE OF ONE EMPLOYED UPON AN INTERMITTENT WHEN- ACTUALLY-EMPLOYED BASIS. BERRY WAS QUESTIONABLE. YOU SAY THAT SUCH PAYMENTS NOW HAVE BEEN DISCONTINUED AND THAT THE EMPLOYEE WILL BE REQUESTED TO REFUND THE AMOUNT OF THE PER DIEM ALLOWANCE HE ALREADY HAS RECEIVED. BERRY IS RELUCTANT TO CONTINUE IN HIS EMPLOYMENT AND HAS INDICATED HE WILL BE REQUIRED TO SEVER HIS CONNECTION WITH THE BUREAU.

B-125675, NOV. 3, 1955

TO THE HONORABLE SECRETARY OF COMMERCE:

YOUR LETTER OF SEPTEMBER 30, 1955, REQUESTS OUR ADVICE WHETHER, UNDER THE FACTS HEREINAFTER RELATED, YOU ARE AUTHORIZED TO ENTER INTO A FIXED PRICE CONTRACT WITH MR. CARL D. BERRY FOR THE COMPLETION OF A FISCAL SURVEY OF THE NATIONAL BUREAU OF STANDARDS AND THE PREPARATION OF A REPORT OF SUCH SURVEY TOGETHER WITH HIS RECOMMENDATIONS.

YOUR DOUBT CONCERNING THE PROPRIETY OF ENTERING INTO SUCH A CONTRACT ARISES FROM THE FOLLOWING FACTS. SINCE MARCH 9 MR. BERRY HAS BEEN EMPLOYED BY THE BUREAU OF STANDARDS AS A CONSULTANT. AT THE TIME OF HIS EMPLOYMENT THE UNDERSTANDING WAS THAT HE WOULD BE COMPENSATED AT THE RATE OF $50 PER DAY PLUS A PER DIEM SUBSISTENCE ALLOWANCE OF $9 IN LIEU OF "OUT OF POCKET" EXPENSES. AFTER OUR DECISION OF AUGUST 12, 1955, B-123282, HOLDING THAT AN EXPERT EMPLOYED BY THE DEPARTMENT OF COMMERCE ON A FULL- TIME BASIS COULD NOT BE PAID THE PER DIEM IN LIEU OF SUBSISTENCE ALLOWANCE AS IS ALLOWED IN THE CASE OF ONE EMPLOYED UPON AN INTERMITTENT WHEN- ACTUALLY-EMPLOYED BASIS, YOUR DEPARTMENT THEN RECOGNIZED THAT THE LEGALITY OF THE PER DIEM ALLOWANCE PAYMENTS TO MR. BERRY WAS QUESTIONABLE. YOU SAY THAT SUCH PAYMENTS NOW HAVE BEEN DISCONTINUED AND THAT THE EMPLOYEE WILL BE REQUESTED TO REFUND THE AMOUNT OF THE PER DIEM ALLOWANCE HE ALREADY HAS RECEIVED. IN VIEW THEREOF, MR. BERRY IS RELUCTANT TO CONTINUE IN HIS EMPLOYMENT AND HAS INDICATED HE WILL BE REQUIRED TO SEVER HIS CONNECTION WITH THE BUREAU.

THE PRACTICAL CONSIDERATIONS OF THE SITUATION ARE SET FORTH IN YOUR LETTER AS FOLLOWS:

"SINCE THE SURVEY IS NEARING COMPLETION, AND A GREAT MANY MANHOURS HAVE BEEN TAKEN UP AS A RESULT OF MR. BERRY'S WORK WITH ALL THE INDIVIDUAL DIVISION CHIEFS, BOTH IN WASHINGTON AND AT THE BOULDER LABORATORIES, HIS DEPARTURE AT THIS POINT WOULD MEAN THAT THE SURVEY WOULD NOT RESULT IN A COMPLETED COMPREHENSIVE REPORT OF FINDINGS AND RECOMMENDATIONS WHICH IS NECESSARY TO GAIN THE CONTEMPLATED BENEFIT FROM THIS PROJECT.'

"IN ORDER TO PROTECT THE BEST INTEREST OF THE GOVERNMENT AND TO OBTAIN THE FULL BENEFITS OF THE SURVEY WHICH IS NOW NEARING COMPLETION, THERE SEEMS TO BE NO ALTERNATIVE BUT TO ENTER INTO A FIXED FEE CONTRACT WITH MR. BERRY TO COMPLETE THE SURVEY AND TO PRODUCE AN ACCEPTABLE AND FINISHED REPORT OF THIS SURVEY WITH HIS RECOMMENDATIONS.'

WE UNDERSTAND THAT THE AUTHORITY UNDER WHICH THE PROPOSED CONTRACT WILL BE NEGOTIATED IS THAT CONTAINED IN SECTION 15 OF THE ACT OF AUGUST 2, 1946, PUBLIC LAW 600, 60 STAT. 810, 5 U.S.C. 55A, AND SECTION 103 OF THE DEPARTMENT OF COMMERCE APPROPRIATION ACT, 1956, 69 STAT. 234. SECTION 15 OF PUBLIC LAW 600 IS AS FOLLOWS:

"THE HEAD OF ANY DEPARTMENT, WHEN AUTHORIZED IN AN APPROPRIATION OR OTHER ACT, MAY PROCURE THE TEMPORARY (NOT IN EXCESS OF ONE YEAR) OR INTERMITTENT SERVICES OF EXPERTS OR CONSULTANTS OR ORGANIZATIONS THEREOF, INCLUDING STENOGRAPHIC REPORTING SERVICES, BY CONTRACT, AND IN SUCH CASES SUCH SERVICE SHALL BE WITHOUT REGARD TO THE CIVIL-SERVICE AND CLASSIFICATION LAWS (BUT AS TO AGENCIES SUBJECT TO THE CLASSIFICATION ACT AT RATES NOT IN EXCESS OF THE PER DIEM EQUIVALENT OF THE HIGHEST RATE PAYABLE UNDER THE CLASSIFICATION ACT, UNLESS OTHER RATES ARE SPECIFICALLY PROVIDED IN THE APPROPRIATION OR OTHER LAW) AND, EXCEPT IN THE CASE OF STENOGRAPHIC REPORTING SERVICES BY ORGANIZATIONS, WITHOUT REGARD TO SECTION 3709, REVISED STATUTES, AS AMENDED BY THIS ACT.'

SECTION 103 OF THE APPROPRIATION ACT PROVIDES, IN PART, THAT:

"APPROPRIATIONS IN THIS TITLE AVAILABLE FOR SALARIES AND EXPENSES SHALL BE AVAILABLE FOR * * * SERVICES AS AUTHORIZED BY SECTION 15 OF THE ACT OF AUGUST 2, 1946 (5 U.S.C. 55A), BUT, UNLESS OTHERWISE SPECIFIED,AT RATES FOR INDIVIDUALS NOT TO EXCEED $50 PER DIEM.'

THE PRIMARY OBJECT OF THE CONTEMPLATED CONTRACT IS TO PROCURE FROM MR. BERRY HIS REPORT OF THE COMPLETED SURVEY TOGETHER WITH HIS RECOMMENDATIONS. ALSO, WE UNDERSTAND THAT THE BUREAU WILL EXERCISE NO SUPERVISION OR CONTROL OVER THE WORK TO BE PERFORMED BY MR. BERRY OTHER THAN TO REQUIRE AN ACCEPTABLE REPORT. MOREOVER, THE PRICE IS TO BE FIXED AT A SPECIFIED AMOUNT IRRESPECTIVE OF THE TIME IT TAKES TO COMPLETE CONTRACT PERFORMANCE. HENCE, WE VIEW THE PROPOSED CONTRACT AS ONE FOR NONPERSONAL SERVICES AS TO WHICH THE SALARY LIMITATION IN SECTION 15 OF PUBLIC LAW 600 AND SECTION 103 OF THE DEPARTMENT OF COMMERCE APPROPRIATION ACT FOR 1956 WOULD NOT APPLY. CF. 26 COMP. GEN. 188. WE ARE OF THE VIEW, THEREFORE, THAT A CONTRACT LAWFULLY MAY BE NEGOTIATED WITH MR. BERRY FOR COMPLETION OF THE SURVEY AND THE PREPARATION OF A REPORT ON A FIXED PRICE BASIS. HOWEVER, THE UTMOST DISCRETION SHOULD BE EXERCISED IN ARRIVING AT AN AGREED PRICE WHICH WILL INSURE THAT MR. BERRY IS NOT COMPENSATED A SECOND TIME FOR WORK FOR WHICH PAYMENT ALREADY HAS BEEN RECEIVED AND TO FURTHER INSURE THAT SUCH CONTRACT WILL NOT BE SUBJECT TO CRITICISM AS A DEVICE FOR REFUNDING THE ERRONEOUS PER DIEM PAYMENTS WHICH WILL BE COLLECTED FROM ..END :