B-130334, APRIL 4, 1957, 36 COMP. GEN. 689

B-130334: Apr 4, 1957

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WHO IS EMPLOYED AS A CONSULTANT ON A "WHEN ACTUALLY EMPLOYED" BASIS UNDER A CIVILIAN EMPLOYMENT CONTRACT. IS NOT SUBJECT TO THE DUAL COMPENSATION LIMITATION. IS SUBJECT TO THE LIMITATIONS OF SECTION 212 OF THE ACT OF JUNE 30. WHETHER HE IS SUBJECT TO SUCH LIMITATIONS ONLY ON THE DAYS HE WAS ACTUALLY EMPLOYED OR DURING THE ENTIRE PERIOD OF THE EMPLOYMENT. YOU SAY THAT COMMANDER BOWMAN WAS TRANSFERRED TO THE RETIRED LIST ON AUGUST 1. CURRENTLY IS IN RECEIPT OF GROSS RETIRED PAY AT $400.14 PER MONTH. OR OFFICE IN WHICH THE SERVICES ARE PERFORMED IS CLOSED. IT APPEARS THAT COMMANDER BOWMAN WAS ACTUALLY EMPLOYED IN HIS CIVILIAN CAPACITY UNDER THE AGREEMENT FOR ONE-HALF DAY ON OCTOBER 17. AUTHORITY FOR EXCEEDING THE 5-DAY PER CALENDAR WEEK PROVISION IS NOT SHOWN.

B-130334, APRIL 4, 1957, 36 COMP. GEN. 689

MILITARY PERSONNEL - DUAL COMPENSATION - CONCURRENT MILITARY RETIRED AND CIVILIAN SERVICE PAY A RETIRED MILITARY OFFICER, WHO IS EMPLOYED AS A CONSULTANT ON A "WHEN ACTUALLY EMPLOYED" BASIS UNDER A CIVILIAN EMPLOYMENT CONTRACT, WHICH LIMITS THE HOURS OR DAYS OF EMPLOYMENT SO THAT THE TOTAL AMOUNT OF RETIRED PAY PLUS CIVILIAN COMPENSATION WHICH POSSIBLY COULD BE PAID DURING THE YEAR DOES NOT EXCEED THE PRESCRIBED STATUTORY LIMITATION OF $10,000 A YEAR, 5 U.S.C. 59A (B), IS NOT SUBJECT TO THE DUAL COMPENSATION LIMITATION, EVEN THOUGH THE CIVILIAN COMPENSATION COMPUTED ON A FULL-TIME YEARLY BASIS WOULD EXCEED THE MAXIMUM LIMITATION.

TO L. A. CAMPBELL, DEPARTMENT OF THE NAVY, APRIL 4, 1957:

BY LETTER DATED JANUARY 10, 1957, FILE JAG:1342.2:SH100165, THE JUDGE ADVOCATE GENERAL OF THE NAVY TRANSMITTED YOUR LETTER OF DECEMBER 6, 1956, WITH ENDORSEMENTS AND ENCLOSURES, REQUESTING DECISION WHETHER COMMANDER MARVIN K. BOWMAN, U.S. NAVY, RETIRED, IS SUBJECT TO THE LIMITATIONS OF SECTION 212 OF THE ACT OF JUNE 30, 1932, 47 STAT. 406, AS AMENDED, 5 U.S.C. 59A, BY VIRTUE OF HIS EMPLOYMENT DURING THE PERIOD OCTOBER 15 TO DECEMBER 7, 1956, BY THE U. S. NAVAL TRAINING SERVICE CENTER, PORT WASHINGTON, NEW YORK, AS A CIVILIAN CONSULTANT, AND, IF SO, WHETHER HE IS SUBJECT TO SUCH LIMITATIONS ONLY ON THE DAYS HE WAS ACTUALLY EMPLOYED OR DURING THE ENTIRE PERIOD OF THE EMPLOYMENT.

YOU SAY THAT COMMANDER BOWMAN WAS TRANSFERRED TO THE RETIRED LIST ON AUGUST 1, 1955, AND CURRENTLY IS IN RECEIPT OF GROSS RETIRED PAY AT $400.14 PER MONTH. UNDER THE PROVISIONS OF PERSONAL SERVICE CONTRACT NPS- 8698, EXECUTED ON OCTOBER 11, 1956, HE ACCEPTED EMPLOYMENT AS A CONSULTANT TO THE U.S. NAVAL TRAINING SERVICE CENTER FOR THE PERIOD OCTOBER 15, 1956, TO FEBRUARY 15, 1957, INCLUSIVE, AT $45 PER DIEM WHEN ACTUALLY EMPLOYED. CONDITION 1 ON THE REVERSE SIDE OF THE CONTRACT STATES THAT UNLESS OTHERWISE PROVIDED IN THE AGREEMENT EMPLOYMENT UNDER THE CONTRACT WOULD BE ON A FULL-TIME BASIS REQUIRING THAT HIS SERVICES BE RENDERED DURING REGULAR WORKING HOURS ON ALL DAYS, EXCEPT THOSE ON WHICH THE DIVISION, UNIT, SECTION, OR OFFICE IN WHICH THE SERVICES ARE PERFORMED IS CLOSED, NOT TO EXCEED, HOWEVER, 5 DAYS IN ANY CALENDAR WEEK EXCEPT UPON THE WRITTEN APPROVAL OF CERTAIN DESIGNATED OFFICIALS. IT APPEARS THAT COMMANDER BOWMAN WAS ACTUALLY EMPLOYED IN HIS CIVILIAN CAPACITY UNDER THE AGREEMENT FOR ONE-HALF DAY ON OCTOBER 17, 1956, AND ON ALL OF THE FOLLOWING DAYS IN OCTOBER EXCEPT SATURDAY AND SUNDAY, OCTOBER 20 AND 21, AND SUNDAY, OCTOBER 28, AND ALSO ON ALL DAYS IN NOVEMBER 1956, EXCEPT SUNDAY, NOVEMBER 18. AUTHORITY FOR EXCEEDING THE 5-DAY PER CALENDAR WEEK PROVISION IS NOT SHOWN.

ITEM I (2) (C) OF THE EMPLOYMENT CONTRACT STATES: "ESTIMATED TOTAL COST: $5,000.00 MAXIMUM.' IN EXPLANATION OF THAT PROVISION IT IS STATED IN A LETTER DATED DECEMBER 11, 1956, FROM THE CHIEF OF NAVAL RESEARCH TO THE COMPTROLLER OF THE NAVY ( NCA 20) THAT THE OFFICE OF NAVAL RESEARCH WAS AWARE OF THE DUAL COMPENSATION STATUTES IN PREPARING THE BOWMAN CONTRACT AND THAT HIS RETIRED PAY WAS $4,800 PER ANNUM. CONSEQUENTLY, IT IS STATED, CARE WAS TAKEN SPECIFICALLY TO LIMIT HIS SALARY UNDER THE CONTRACT TO A MAXIMUM OF $5,000, THUS ASSURING THAT HIS TOTAL SALARY UNDER THE CONTRACT AND HIS RETIRED PAY COULD NOT EXCEED $10,000 PER ANNUM. WHILE SUCH PROVISION OF THE CONTRACT, STANDING ALONE, IS SUSCEPTIBLE OF THE INTERPRETATION THAT IT WAS MERELY AN ESTIMATE OF THE MAXIMUM TOTAL COST, IN VIEW OF THE EXPLANATION GIVEN IT IS CLEAR THAT THE PROVISION WAS INTENDED AS A LIMITATION ON THE AMOUNT THAT COULD BE EARNED UNDER THE CONTRACT, AND WAS SO UNDERSTOOD BY THE CONTRACTING PARTIES. HENCE, IT REASONABLY MAY BE CONCLUDED THAT THE CONTRACT LIMITED COMMANDER BOWMAN'S TOTAL COMPENSATION THEREUNDER TO A MAXIMUM OF $5,000.

SECTION 212 OF THE ACT OF JUNE 30, 1932, AS AMENDED, 5 U.S.C., SUPP. III, 59A, PROVIDES THAT NO PERSON HOLDING A CIVILIAN OFFICE OR POSITION UNDER THE UNITED STATES GOVERNMENT SHALL BE ENTITLED TO RETIRED PAY FROM THE UNITED STATES FOR OR ON ACCOUNT OF SERVICES AS A COMMISSIONED OFFICER OF THE UNIFORMED SERVICES AT A RATE IN EXCESS OF AN AMOUNT WHICH WHEN COMBINED WITH THE ANNUAL RATE OF COMPENSATION FROM SUCH CIVILIAN OFFICE OR POSITION MAKES THE TOTAL RATE FROM BOTH SOURCES MORE THAN $10,000. SUBSECTION (B) OF THAT SECTION, 5 U.S.C. 59A (B), PROVIDES THAT THE SECTION SHALL NOT APPLY TO ANY PERSON WHOSE RETIRED PAY, PLUS CIVILIAN PAY, AMOUNTS TO LESS THAN $10,000. UNDER SUCH PROVISIONS A PERSON IN RECEIPT OF COMPENSATION FROM A CIVILIAN OFFICE OR POSITION PAID AT A RATE OF MORE THAN $10,000 PER YEAR MAY NOT FOR ANY PERIOD DURING WHICH SO PAID RECEIVE RETIRED PAY UNLESS, OF COURSE, HIS RETIRED PAY EXCEEDS THE $10,000 RATE AND ELECTION TO RECEIVE ONLY THE RETIRED PAY IS MADE. YOUR DOUBT IN THE MATTER, HOWEVER, APPEARS TO BE WHETHER IT MAY BE CONSIDERED THAT THE RESTRICTIVE PROVISIONS OF SECTION 212, AS AMENDED, ARE FOR APPLICATION SINCE THE MAXIMUM TOTAL COST FOR THE APPROXIMATELY 4-MONTH EMPLOYMENT PERIOD, WHEN COMBINED WITH THE OFFICER'S ANNUAL RETIRED PAY, TOTALS LESS THAN $10,000.

THE LIMITATION IN SECTION 212 HAS REFERENCE SPECIFICALLY TO THE RATE OF THE COMBINED SALARIES RATHER THAN TO THE TOTAL AMOUNT RECEIVED DURING THE YEAR. 12 COMP. GEN. 256. HOWEVER, SINCE THE OVERALL PURPOSE OF THE PROVISIONS OF THAT SECTION PRIMARILY IS TO LIMIT THE COMBINED RETIRED PAY AND CIVILIAN PAY THAT THE OFFICER MIGHT RECEIVE DURING THE ENTIRE YEAR, IT WAS RECOGNIZED IN DECISION OF JANUARY 24, 1941, 20 COMP. GEN. 407, THAT SUCH LIMITATION DOES NOT PRECLUDE THE PAYMENT OF RETIRED PAY AND CIVILIAN COMPENSATION WHERE THE CIVILIAN EMPLOYMENT IS ON A "WHEN ACTUALLY EMPLOYED" BASIS AND THE HOURS OR DAYS OF EMPLOYMENT EXPRESSLY ARE LIMITED IN THE EMPLOYMENT CONTRACT SO THAT THE TOTAL AMOUNT OF RETIRED PAY PLUS CIVILIAN PAY THAT POSSIBLY COULD BE PAID DURING THE YEAR DOES NOT EXCEED THE PRESCRIBED STATUTORY LIMITATION, EVEN THOUGH A COMBINED RATE COMPUTED ON A FULL-TIME PER ANNUM BASIS WOULD EXCEED THAT LIMITATION. SINCE THE MAXIMUM COMPENSATION PAYABLE TO COMMANDER BOWMAN UNDER THE EMPLOYMENT CONTRACT WAS $5,000, WHICH SUM, WHEN COMBINED WITH HIS ANNUAL RETIRED PAY, TOTALED LESS THAN $10,000, THE RULE STATED IN THE DECISION OF JANUARY 24, 1941, PROPERLY IS FOR APPLICATION PROVIDED, OF COURSE, THAT FURTHER CIVILIAN GOVERNMENT EMPLOYMENT ARISING FROM ANY OTHER EMPLOYMENT AGREEMENT DOES NOT RESULT IN THE OFFICER BEING EMPLOYED AT A COMBINED ANNUAL RATE IN EXCESS OF $10,000 OR RECEIVING MORE THAN THAT SUM AS RETIRED PAY AND CIVILIAN PAY IN ANY 1-YEAR PERIOD. ACCORDINGLY, LIMITED TO THAT EXTENT, IT MAY BE CONSIDERED THAT COMMANDER BOWMAN IS NOT SUBJECT TO THE LIMITATIONS OF SECTION 212 OF THE ACT OF JUNE 30, 1932, AS AMENDED, BECAUSE OF HIS CIVILIAN EMPLOYMENT DURING THE PERIOD OCTOBER 15 TO DECEMBER 7, 1956, UNDER THE CONTRACT EXECUTED ON OCTOBER 11, 1956.