B-136949 September 8, 1958

B-136949: Sep 8, 1958

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The local office of the Bureau of Indian Affairs assigns as a reason for the spoilage the fact that the office was handicapped by a shortage of warehouse and stock control personnel. The claim was disallowed by settlement of our Office dated June 30. It is stated in the letter of July 18. That this dtermination is in conflict with the Department's concept relative to claims arising from the distribution activities of Government donated foods. Reliance for the legality of the claim against the State was placed upon the agreement form (Form FP-51) which each agency is required to sign in making application for donated agricultural commodities. The opinion concludes that the fact that the commodities were allowed to spoil and the subsequent failure to place the commodities into the intended us amounts to a breach of contract and the measure of damages for the failure is the value of the commodities not used for the purpose for which their donation was authorized by statutes.

B-136949 September 8, 1958

The Honorable The Secretary of Agriculture

Dear Mr. Secretary:

On July 23, 1958, the Deputy Administrator, Agriculture Marketing Service, Department of Agriculture, requested that we reconsider the claim of your department in the amount of $20,820.32, against the Department of the Interior, Bureau of Indian Affairs, on account of donated agricultural commodities which spoiled while in the possession of the Bureau of Indian Affairs.

The local office of the Bureau of Indian Affairs assigns as a reason for the spoilage the fact that the office was handicapped by a shortage of warehouse and stock control personnel.

The claim was disallowed by settlement of our Office dated June 30, 1950, on the grounds that the agreement entered into between your department and the Bureau of Indian Affairs contained no provision for the payment of damages and that sunce title to the commodities donated passed to the Bureau of Indian Affairs, no right to the payment of damages would accrue to the donor. It is stated in the letter of July 18, 1958, that this dtermination is in conflict with the Department's concept relative to claims arising from the distribution activities of Government donated foods.

The record before this Office contains a memorandum dated September 25, 1957, from the Deputy General Counsel of your department to the Director, Food Distribution Division, Agricultural and Marketing Service, concerning a claim against the State of California, arising out of similar circumstances. There, reliance for the legality of the claim against the State was placed upon the agreement form (Form FP-51) which each agency is required to sign in making application for donated agricultural commodities. In this agreement each agency agrees to accept responsibility for the distribution or use of the commodities donated and to provide proper facilities and arrangements for the acceptance and distribution or use of such commodities. The opinion concludes that the fact that the commodities were allowed to spoil and the subsequent failure to place the commodities into the intended us amounts to a breach of contract and the measure of damages for the failure is the value of the commodities not used for the purpose for which their donation was authorized by statutes.

Upon reconsideration of the matter, our Office agrees that the donation of agricultural commodities under agreements with agencies in the form used places a condition upon the receiving agency to provide proper facilities and arrangements for the distribution and use of the commodities. Also, we conclude that where commodities are allowed to spoil there arises the presumption that the receiving agency was delinquent in this respect and that the contract was breached.

However, it is a rule of long standing that funds of Government departments and agencies subject to the control of the accounting officers of the Government are not available for the payment of claims for damages to property of other Government departments and agencies. See 25 Comp. Gen. 49, 54 and cases cited therein. No valid reason appears why such rule should not apply to interdepartmental claims asserted for damage resulting from a failure to properly preserve donated agricultural commodities in accordance with the aformentioned agreement form.

Thus, we conclude that the appropriations of the Department of the Interior, Bureau of Indian Affairs, are not available for the payment of the instant claim including that portion involving the commodities transferred to the Bureau of Indian Affairs through the Department of Public Welfare, State of New Mexico and the action taken in denying the claim appears proper upon the basis set forth above.

Sincerely yours,

Joseph Campbell Comptroller General of the United States