B-132597, SEP. 5, 1957

B-132597: Sep 5, 1957

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YOUR LETTER IS. AS FOLLOWS: "IN ADDITION TO THE CUSTOMARY CHARGES FOR SALARY AND TRAVEL COSTS THERE IS INCLUDED ON THE VOUCHER A CHARGE OF $426.00 FOR "BUREAU SUPERVISION AND SERVICES.'. THAT AN AGENCY MAY CONTRACT FOR INTER-AGENCY SERVICES AND PAY CHARGES THEREFOR AT RATES ESTABLISHED BY THE SERVICING AGENCY AS THEY ARE REPORTED TO BE BASED UPON THE COST OF RENDITION OF THE SERVICES AND DO NOT APPEAR TO BE EXCESSIVE. YOU SAY THAT ALTHOUGH THE CORRECTNESS OF THE RATE CHARGED AS OVERHEAD IN THE INSTANT CASE IS NOT QUESTIONED. IT IS NOT CLEAR WHETHER AN OVERHEAD CHARGE IS SPECIFICALLY APPLICABLE IN CASES INVOLVING REIMBURSEMENT FOR PERSONAL SERVICES OF EMPLOYEES ON LOAN TO THE INTERNATIONAL COOPERATION ADMINISTRATION.

B-132597, SEP. 5, 1957

TO MR. NEAL J. PRICE, AUTHORIZED CERTIFYING OFFICER, INTERNATIONAL COOPERATION ADMINISTRATION:

YOUR LETTER OF JULY 16, 1957, TRANSMITTED A VOUCHER IN FAVOR OF THE NATIONAL BUREAU OF STANDARDS, DEPARTMENT OF COMMERCE, FOR REIMBURSEMENT OF SALARY, TRAVEL COSTS, AND RELATED EXPENSES TOTALING $2,857.24 INCIDENT TO THE DETAIL OF DR. FRANCIS B. SILSBEE TO THE INTERNATIONAL COOPERATION ADMINISTRATION FOR DUTY AT THE UNITED STATES OPERATIONS MISSION TO ETHIOPIA DURING THE PERIOD SEPTEMBER 26 TO NOVEMBER 4, 1956. YOU REQUESTED, IN EFFECT, A DECISION AS TO WHETHER THE VOUCHER MAY BE CERTIFIED FOR PAYMENT. YOUR LETTER IS, IN PERTINENT PART, AS FOLLOWS:

"IN ADDITION TO THE CUSTOMARY CHARGES FOR SALARY AND TRAVEL COSTS THERE IS INCLUDED ON THE VOUCHER A CHARGE OF $426.00 FOR "BUREAU SUPERVISION AND SERVICES.' IN RESPONSE TO OUR QUESTION AS TO THE APPLICABILITY OF THIS CHARGE IN THE INSTANT CASE INVOLVING REIMBURSEMENT FOR PERSONAL SERVICES, THE NATIONAL BUREAU OF STANDARDS HAS EXPLAINED IN ITS LETTER OF MAY 16, 1957, COPY ATTACHED, THAT IT REPRESENTED AN OVERHEAD CHARGE BASED ON THE COST OF LABOR INVOLVED IN PROVIDING DR. SILSBEE'S SERVICES TO THIS AGENCY.'

YOU REFER TO OUR DECISION OF APRIL 29, 1953, 32 COMP. GEN. 479, WHEREIN WE STATED, IN PART, THAT AN AGENCY MAY CONTRACT FOR INTER-AGENCY SERVICES AND PAY CHARGES THEREFOR AT RATES ESTABLISHED BY THE SERVICING AGENCY AS THEY ARE REPORTED TO BE BASED UPON THE COST OF RENDITION OF THE SERVICES AND DO NOT APPEAR TO BE EXCESSIVE. YOU SAY THAT ALTHOUGH THE CORRECTNESS OF THE RATE CHARGED AS OVERHEAD IN THE INSTANT CASE IS NOT QUESTIONED, IT IS NOT CLEAR WHETHER AN OVERHEAD CHARGE IS SPECIFICALLY APPLICABLE IN CASES INVOLVING REIMBURSEMENT FOR PERSONAL SERVICES OF EMPLOYEES ON LOAN TO THE INTERNATIONAL COOPERATION ADMINISTRATION.

SECTION 601 OF THE ECONOMY ACT OF JUNE 30, 1932, 47 STAT. 417, AS AMENDED, 31 U.S.C. 686, PRESUMABLY THE ACT UNDER WHICH THE SERVICES IN QUESTION WERE RENDERED, PROVIDES THAT THE PROCURING AGENCY---

"* * * SHALL PAY PROMPTLY * * * ALL OR PART OF THE ESTIMATED OR ACTUAL COST THEREOF AS DETERMINED BY (THE REQUISITIONED AGENCY) * * * BUT PROPER ADJUSTMENTS ON THE BASIS OF THE ACTUAL COST OF THE (ITEM OR SERVICES) * * * PAID FOR IN ADVANCE, SHALL BE MADE AS MAY BE AGREED UPON BY THE (AGENCIES) * * * CONCERNED * * *.'

WE STATED IN 32 COMP. GEN. 479 IN CONNECTION WITH THE ABOVE LANGUAGE THAT:

"THIS LANGUAGE WAS DISCUSSED IN 22 COMP. GEN. 74 AND IT WAS THERE HELD THAT THE STATUTE REQUIRED REIMBURSEMENT TO BE MADE "ON THE BASIS OF THE ACTUAL COST OF PERFORMING THE SERVICE "AS MAY BE AGREED UPON" BY THE AGENCIES CONCERNED.' SUCH COST WAS CONSTRUED IN THE SAID DECISION TO INCLUDE OVERHEAD OR INDIRECT COSTS--- "ITEMS WHICH COMMONLY ARE RECOGNIZED AS ELEMENTS OF COST, NOTWITHSTANDING SUCH ITEMS MAY NOT HAVE RESULTED IN DIRECT EXPENDITURES * * *.' ALSO, IT WAS STATED THEREIN THAT "THE QUESTION AS TO THE "PROPER ADJUSTMENTS" TO BE MADE AS REIMBURSEMENT FOR SERVICES RENDERED UNDER THE TERMS OF THE APPLICABLE STATUTE IS ONE PRIMARILY FOR ADMINISTRATIVE CONSIDERATION, TO BE DETERMINED BY AGREEMENT BETWEEN THE AGENCIES CONCERNED.'"

IT APPEARS FROM THE BUREAU OF STANDARDS' LETTER REFERRED TO BY YOU THAT THE BUREAU AGREED TO FURNISH THE SERVICES OF DR. SILSBEE WITH THE UNDERSTANDING THAT THE INTERNATIONAL COOPERATION ADMINISTRATION WOULD REIMBURSE THE BUREAU ALL TRANSPORTATION COSTS, PER DIEM, SALARY AND RELATED EXPENSES INCURRED BY THE BUREAU INCIDENT TO THE FURNISHING OF THE DOCTOR'S SERVICES.

THE BUREAU OF STANDARDS HAS INFORMALLY ADVISED US THAT IN THE INSTANT CASE DR. SILSBEE PERFORMED CERTAIN PREPARATORY WORK AT THE BUREAU ON THE PROJECT, INCLUDING CONSULTATION WITH OTHER BUREAU OFFICIALS AND EMPLOYEES, PRIOR TO DEPARTING FOR ETHIOPIA. THE BUREAU ALSO ADVISED THAT DR. SILSBEE, UPON HIS RETURN FROM ETHIOPIA, USED BUREAU FACILITIES, INCLUDING SECRETARIAL AND STENOGRAPHIC SERVICES, IN WRITING IN FINAL FORM HIS REPORT ON THE PROJECT. THUS, IT APPEARS THAT THE BUREAU INCURRED CERTAIN INDIRECT COSTS INCIDENT TO THE FURNISHING OF DR. SILSBEE'S SERVICES AND THAT THESE COSTS ARE EXPENSES "RELATED" TO THE DOCTOR'S SERVICES. MOREOVER, IT APPEARS FROM CORRESPONDENCE IN THE FILE SUBMITTED BY YOU THAT THE OVERHEAD COSTS WERE COMPUTED IN ACCORDANCE WITH THE ACCOUNTING PROCEDURE OR SYSTEM USED BY THE BUREAU TO APPORTION OR ALLOCATE ALL COSTS INCURRED BY IT IN CONNECTION WITH SERVICES RENDERED OTHER AGENCIES AND YOU SAY YOU DO NOT QUESTION THE CORRECTNESS OF THE RATE CHARGED.

THEREFORE, IN THE INSTANT CASE, THE VOUCHER, WHICH IS RETURNED HEREWITH, MAY BE CERTIFIED FOR PAYMENT.