B-137231, JANUARY 6, 1959, 38 COMP. GEN. 470

B-137231: Jan 6, 1959

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MILITARY PERSONNEL - RETIRED - CONTRACTING WITH GOVERNMENT - SALES OF SUPPLIES AND WAR MATERIALS A RETIRED MILITARY OFFICER WHO IS EMPLOYED UNDER A CONTRACT FOR PERSONAL SERVICES WITH A PERSON WHO MANUFACTURES AND/OR SELLS SUPPLIES OR WAR MATERIALS TO MILITARY DEPARTMENTS. IS NOT ENGAGED IN SELLING. CONTRACTING OR NEGOTIATING TO SELL TO SUCH AGENCIES WITHIN THE TERMS OF 5 U.S.C. 59 (C) OR 10 U.S.C. 6112 (B) WHICH PRECLUDE PAYMENTS TO A RETIRED OFFICER WHO IS ENGAGED IN SELLING. A RETIRED OFFICER WHOSE PRIVATE EMPLOYMENT REQUIRES THAT HE CONTACT THE TRADE TO PROMOTE GOOD WILL. WHICH WILL RESULT IN SALES TO THE DEPARTMENT OF DEFENSE. TO BE EFFECTED BY OTHER EMPLOYEES OR AGENTS OF HIS EMPLOYER IS CONSIDERED AS "SELLING.

B-137231, JANUARY 6, 1959, 38 COMP. GEN. 470

MILITARY PERSONNEL - RETIRED - CONTRACTING WITH GOVERNMENT - SALES OF SUPPLIES AND WAR MATERIALS A RETIRED MILITARY OFFICER WHO IS EMPLOYED UNDER A CONTRACT FOR PERSONAL SERVICES WITH A PERSON WHO MANUFACTURES AND/OR SELLS SUPPLIES OR WAR MATERIALS TO MILITARY DEPARTMENTS, BUT WHO HAS NO PERSONAL CONNECTION WITH SALES OR THE PROMOTION OF SALES, IS NOT ENGAGED IN SELLING, CONTRACTING OR NEGOTIATING TO SELL TO SUCH AGENCIES WITHIN THE TERMS OF 5 U.S.C. 59 (C) OR 10 U.S.C. 6112 (B) WHICH PRECLUDE PAYMENTS TO A RETIRED OFFICER WHO IS ENGAGED IN SELLING, CONTRACTING FOR THE SALE OF, OR NEGOTIATING FOR THE SALE OF ANY SUPPLIES OR WAR MATERIALS OR "NAVAL" SUPPLIES OR WAR MATERIALS IN THE CASE OF 10 U.S.C. 6112 (B). A RETIRED OFFICER WHOSE PRIVATE EMPLOYMENT REQUIRES THAT HE CONTACT THE TRADE TO PROMOTE GOOD WILL, WHICH WILL RESULT IN SALES TO THE DEPARTMENT OF DEFENSE, TO BE EFFECTED BY OTHER EMPLOYEES OR AGENTS OF HIS EMPLOYER IS CONSIDERED AS "SELLING, CONTRACTING OR NEGOTIATING TO SELL" AS THE PHRASE IS USED IN 5 U.S.C. 59 (C) AND 10 U.S.C. 6112 (B) WHICH PRECLUDE PAYMENTS TO RETIRED OFFICERS SO EMPLOYED, AND THIS IS SO EVEN THOUGH THE ACTUAL PURCHASING OFFICERS ARE DIFFERENT FROM THOSE WITH WHOM THE RETIRED OFFICER DEALS IF THE LATTER IN FACT HAVE AUTHORITY TO DETERMINE OR OCCUPY A POSITION THAT WOULD SUBSTANTIALLY INFLUENCE THE SELECTION OF THE SUPPLIER OR OF THE BRAND OF SUPPLIES AND MATERIALS THAT MAY BE PURCHASED. THE PROHIBITION IN 5 U.S.C. 59 (C) AND 10 U.S.C. 6112 (B) AGAINST PAYMENT TO RETIRED OFFICERS WHO SELL SUPPLIES AND WAR MATERIALS TO THE GOVERNMENT IS DIRECTED TOWARD THE ELIMINATION OF FAVORITISM OR UNDUE INFLUENCE IN CONNECTION WITH SUCH SALES WHICH IS A POSSIBILITY EXISTING THROUGHOUT AN EMPLOYMENT PERIOD; THEREFORE THE PHRASES "IS ENGAGED" AND "WHILE SO ENGAGED" MAY NOT BE ACCORDED A NARROW CONSTRUCTION WHICH WOULD LIMIT THE FORFEITURE OF RETIRED PAY TO ONLY THOSE DAYS OR PARTS THEREOF WHICH THE OFFICER ACTUALLY ENGAGES IN SALES, BUT MUST BE CONSTRUED AS PRECLUDING PAYMENTS DURING THE ENTIRE EMPLOYMENT PERIOD. THE PHRASE "FOR A PERIOD OF TWO YEARS AFTER RETIREMENT" IN 5 U.S.C. 59 (C), WHICH PROHIBITS PAYMENTS TO RETIRED OFFICERS ENGAGED IN THE SALE OF SUPPLIES OR WAR MATERIALS TO THE MILITARY DEPARTMENTS, LIMITS THE PERIOD OF PROHIBITION AS TO RETIRED OFFICERS TO THE TWO YEARS COMMENCING ON THE EFFECTIVE DATE OF RETIREMENT EXCEPT AS TO NAVY AND MARINE CORPS OFFICERS WHO COME WITHIN THE PROHIBITION IN 10 U.S.C. 6112 (B) WHICH DOES NOT CONTAIN ANY TIME LIMIT. IN THE ABSENCE OF LIMITATION WITH RESPECT TO THE PHRASES "ANY SUPPLIES OR WAR MATERIALS" AND ,NAVAL SUPPLIES OR WAR MATERIALS" USED IN 5 U.S.C. 59 (C) AND 10 U.S.C. 6112 (B), WHICH PROHIBIT PAYMENTS TO RETIRED OFFICERS ENGAGED IN THE SALE OF SUCH SUPPLIES TO THE MILITARY DEPARTMENTS, THESE PHRASES ARE CONSTRUED TO INCLUDE ANY ARTICLE OF TANGIBLE PERSONAL PROPERTY PURCHASED BY THE MILITARY DEPARTMENTS. A SALE TO AN INTEGRAL PART OF THE NAVY WOULD CONSTITUTE A SALE TO AN "AGENCY OF THE DEPARTMENT OF DEFENSE" WITHIN THE MEANING OF 5 U.S.C. 59 (C) WHICH PRECLUDES PAYMENTS TO RETIRED OFFICERS FOR A PERIOD OF TWO YEARS AFTER RETIREMENT IF ENGAGED IN THE SALE OF SUPPLIES OR WAR MATERIALS TO SUCH AGENCY, ALSO SALES TO POST EXCHANGES OR SHIPS' STORES AND OTHER ORGANIZATIONS AND CLUBS WHICH ARE OPERATED AS INTEGRAL PARTS OF THE SERVICES WITH THE FUNDS BEING UNDER THE ADMINISTRATIVE CONTROL OF THE SERVICES WOULD CONSTITUTE SALES TO AN AGENCY OF THE DEPARTMENT OF DEFENSE WITHIN THE PROHIBITION.

TO COMMANDER R. A. WILSON, DEPARTMENT OF THE NAVY, JANUARY 6, 1959:

YOUR LETTER REQUESTING A DECISION CONCERNING THE MATTER OF FORFEITURE OF RETIRED PAY IN THE CASE OF LIEUTENANT COMMANDER RONALD ANTHONY, UNITED STATES NAVY, RETIRED (FILE NO. 349918), IN THE CIRCUMSTANCES STATED BELOW, WAS FORWARDED HERE APPROVED BY THE MILITARY PAY AND ALLOWANCE COMMITTEE, DEPARTMENT OF DEFENSE, UNDER SUBMISSION NO. 365.

IT IS STATED THAT MR. ANTHONY WAS RETIRED EFFECTIVE JULY 1, 1957, AS A LIEUTENANT COMMANDER OF THE REGULAR NAVY AND IT APPEARS THAT ON OR ABOUT AUGUST 19, 1957, HE ACCEPTED EMPLOYMENT WITH THE HOFFMAN CIGAR COMPANY OF NORFOLK, VIRGINIA. THE RECORD INDICATES THAT DURING THE FIRST FIVE WEEKS OF SUCH EMPLOYMENT, COMMANDER ANTHONY ATTENDED AN ADVERTISING AND PROMOTION TRAINING SCHOOL AT NEWARK, NEW JERSEY. THEREAFTER AND UNTIL ABOUT JUNE 11, 1958, COMMANDER ANTHONY'S DUTIES ON BEHALF OF THE HOFFMAN CIGAR COMPANY APPEAR TO HAVE BEEN IN THE FIELD OF SALES PROMOTION.

IN THAT CONNECTION, THE RECORD SHOWS THAT COMMANDER ANTHONY, IN A LETTER DATED APRIL 21, 1958, ADVISED THE JUDGE ADVOCATE GENERAL OF THE NAVY THAT HE WAS EMPLOYED "IN THE CAPACITY OF SALESMAN FOR BUDWEISER BEER" AND THAT " APPROXIMATELY 30 PERCENT OF MY TIME I WILL CALL ON NAVY OFFICERS' CLUBS, C.P.O. CLUBS, NAVY EXCHANGES AND WELFARE AND RECREATION CENTERS ON DIFFERENT SHIPS.' IN A SUBSEQUENT LETTER, DATED JUNE 13, 1958, COMMANDER ANTHONY FURTHER ADVISED THE JUDGE ADVOCATE GENERAL OF THE NAVY THAT THE TERM " SALESMAN" WHICH HE HAD USED IN HIS LETTER OF APRIL 21, 1958, WAS INACCURATE AND THAT HE SHOULD HAVE STATED THAT HE WAS "A SALES-PROMOTION AND PUBLIC RELATIONS MAN; " THAT HE HAD NOT SOLD ANY BEER TO THE NAVY, THAT HE WORKED FOR A STRAIGHT SALARY AND DID NOT RECEIVE A COMMISSION AND THAT HIS "INFREQUENT CALLS ON OFFICERS' CLUBS, C.P.O. CLUBS, AND NAVY EXCHANGES WERE TO PROMOTE GOOD WILL" AND "MAINTAIN GOOD PUBLIC RELATIONS.' COMMANDER ANTHONY FURTHER STATED IN HIS LETTER OF JUNE 13, 1958, THAT HE HAD "NO DIRECT CONNECTION WITH THE ACTUAL SELLING OR NEGOTIATING FOR SALE.'

MR. RALPH M. HOFFMAN, PRESIDENT OF HOFFMAN CIGAR COMPANY, ADVISED THE JUDGE ADVOCATE GENERAL OF THE NAVY CONCERNING COMMANDER ANTHONY'S DUTIES, IN A LETTER DATED JUNE 11, 1958, IN PERTINENT PART AS FOLLOWS:

MR. ANTHONY ALSO PERFORMED DUTIES AS MILITARY REPRESENTATIVE TO MAINTAIN GOOD WILL, PROMOTE DISPLAYS AND ADVERTISE.

HE ALSO OFFERED ADVICE IN PLANNING SHIPS' PARTIES, WHICH WERE HELD ASHORE. THIS INCLUDED ADVICE IN HIRING OF WAITERS, SELECTING CATERERS, ORCHESTRAS AND OTHER INCIDENTALS WHICH CONTRIBUTED GOOD WILL TOWARD PURCHASES OF BUDWEISER BEER.

MR. HOFFMAN FURTHER STATED IN HIS LETTER THAT " MR. ANTHONY'S DUTIES IN NO WAY REQUIRED HIM TO SELL OR NEGOTIATE SALES OF PRODUCTS TO THE U.S. NAVY. ALL SALES MADE TO THE NAVY AFLOAT WERE MADE ON BID THROUGH THE NAVY PURCHASING OFFICE, OR DIRECTLY TO THE SHIP'S WELFARE OFFICERS. THESE SALES WERE MADE ENTIRELY BY OUR SALES MANAGER.' THE LETTER OF JUNE 11, 1958, FROM MR. HOFFMAN CONCLUDES WITH THE STATEMENT THAT," MR. ANTHONY HAS BEEN REASSIGNED, SO THAT HIS DUTIES DO NOT INCLUDE ANY POSSIBILITY OF SELLING, CONTRACTING OR NEGOTIATING TO SELL TO DEPARTMENTS OF THE NAVY.'

THE PROPRIETY OF COMMANDER ANTHONY'S ACTIVITIES AS AN EMPLOYEE OF THE HOFFMAN CIGAR COMPANY WHILE CONCURRENTLY RECEIVING RETIRED PAY AS A RETIRED COMMISSIONED OFFICER OF THE REGULAR NAVY ALSO APPEARS TO HAVE BEEN SPECIFICALLY CALLED TO THE ATTENTION OF THE DEPARTMENT OF THE NAVY IN AN ANONYMOUS LETTER, DATED MAY 23, 1958, SIGNED " INTERESTED PARTIES," AND IN WHICH IT WAS STATED THAT " MR. ANTHONY USES HIS INFLUENCE AND PRESTIGE AS A RECENTLY RETIRED NAVAL OFFICER TO SELL HIS PRODUCTS TO SHIPS, STATIONS AND SERVICE CLUBS," AND THAT HE "HAS GONE SO FAR AS TO INDUCE COMMANDING OFFICERS FRIENDLY TO HIM TO WRITE LETTERS DIRECTING THEIR SHIPS' RECREATION COUNCIL TO BUY AND USE MR. ANTHONY'S PRODUCT AFTER THE COUNCIL HAD VOTED AND CONTRACTED FOR A RIVAL BEER.'

AS POINTED OUT IN YOUR LETTER, COMMANDER ANTHONY'S RIGHT TO RECEIVE RETIRED PAY AS A RETIRED COMMISSIONED OFFICER OF THE REGULAR NAVY, EFFECTIVE FROM THE DATE OF HIS RETIREMENT ON JULY 1, 1957, DURING THE PERIOD THAT HE HAS BEEN EMPLOYED BY THE HOFFMAN CIGAR COMPANY IS RESTRICTED BY THE LIMITATIONS PRESCRIBED IN THE STATUTORY PROVISIONS WHICH ARE CODIFIED IN 5 U.S.C. 59C AND 10 U.S.C. 6112 (B).

SECTION 59C, TITLE 5, U.S. CODE, 1952 USED., SUPP. V, PROVIDES AS FOLLOWS:

NO PAYMENT SHALL BE MADE FROM APPROPRIATIONS IN ANY ACT TO ANY OFFICER ON THE RETIRED LISTS OF THE REGULAR ARMY, REGULAR NAVY, REGULAR MARINE CORPS, REGULAR AIR FORCE, REGULAR COAST GUARD, COAST AND GEODETIC SURVEY, AND PUBLIC HEALTH SERVICE FOR A PERIOD OF TWO YEARS AFTER RETIREMENT WHO FOR HIMSELF OR FOR OTHERS IS ENGAGED IN THE SELLING OF OR CONTRACTING FOR THE SALE OF OR NEGOTIATING FOR THE SALE OF TO ANY AGENCY OF THE DEPARTMENT OF DEFENSE, THE COAST GUARD, THE COAST AND GEODETIC SURVEY, AND THE PUBLIC HEALTH SERVICE ANY SUPPLIES OR WAR MATERIALS.

SECTION 6112 (B), TITLE 10, U.S.C. (70A STAT. 381/--- DERIVED FROM PROVISIONS FORMERLY CONTAINED IN 34 U.S.C. 8823--- PROVIDES AS FOLLOWS:

IF A RETIRED OFFICER OF THE REGULAR NAVY OR THE REGULAR MARINE CORPS IS ENGAGED FOR HIMSELF OR OTHERS IN SELLING, OR CONTRACTING OR NEGOTIATING TO SELL, NAVAL SUPPLIES OR WAR MATERIALS TO THE DEPARTMENT OF THE NAVY, HE IS NOT ENTITLED TO ANY PAYMENT FROM THE UNITED STATES WHILE HE IS SO ENGAGED.

THE SEVERAL QUESTIONS PRESENTED IN YOUR LETTER WILL BE CONSIDERED SEPARATELY AND IN THE ORDER STATED THEREIN.

QUESTION 1

DOES THE PHRASE "ENGAGED IN SELLING, CONTRACTING OR NEGOTIATING TO SELL(FOR THE SALE)" APPLY TO A CONTRACT FOR PERSONAL SERVICES BETWEEN A RETIRED OFFICER AND (A) A PERSON WHOSE BUSINESS IS THE MANUFACTURE AND/OR SALE OF THE PROSCRIBED ARTICLES WHEN THE OFFICER HAS NO PERSONAL CONNECTION WITH SALES OR PROMOTION OF SALES, (B) A PERSON WHEN THE OFFICER'S DUTIES PROVIDE THAT HE CONTACT THE TRADE FOR THE PURPOSE OF PROMOTING GOOD WILL WHICH WILL RESULT IN SALES TO BE EFFECTED BY OTHER EMPLOYEES OR AGENTS OF THE EMPLOYER?

ALTHOUGH THE PHRASE IN QUESTION APPEARS IN A SLIGHTLY DIFFERENT FORM IN 5 U.S.C. 59C FROM THAT CONTAINED IN 10 U.S.C. 6112 (B), THE NATURE OF THE ACTIVITIES WHICH ARE ENCOMPASSED IN BOTH INSTANCES SEEMS QUITE CLEAR, NAMELY, ALL ACTIVITIES THE DIRECT PURPOSES OF WHICH ARE TO "SELL" ANY SUPPLIES OR WAR MATERIALS TO ANY AGENCY OF THE DEPARTMENT OF DEFENSE, ETC., IN THE CASE OF 5 U.S.C. 59C, AND NAVAL SUPPLIES AND WAR MATERIALS TO THE DEPARTMENT OF THE NAVY IN THE CASE OF 10 U.S.C. 6112 (B). IN THE CIRCUMSTANCES ABOVE SET FORTH UNDER PART (A), INVOLVING A CONTRACT OF EMPLOYMENT FOR PERSONAL SERVICES BETWEEN A RETIRED OFFICER AND A PERSON WHOSE BUSINESS IS THE MANUFACTURE AND SALE OF THE PROSCRIBED ARTICLES "WHEN THE OFFICER HAS NO PERSONAL CONNECTION WITH SALES OR PROMOTION OF SALES," IT REASONABLY MAY BE CONCLUDED THAT THE PHRASE REFERRED TO WOULD NOT BE FOR APPLICATION.

THE STATUTES MANIFESTLY ARE DIRECTED AT PREVENTING FAVORITISM AND PREFERENTIAL TREATMENT IN PURCHASES AND CONTRACTS FOR SUPPLIES AND MATERIALS BY PROHIBITING RETIRED OFFICERS FROM ENGAGING IN SALES AND RELATED ACTIVITIES WITH THE DEPARTMENTS CONCERNED. CONSIDERING THAT PURPOSE, ACTIVITIES CALCULATED TO INDUCE THE PURCHASE OF SUPPLIES AND MATERIALS, EVEN THOUGH THE MECHANICAL ACTS OF ACTUALLY CONSUMMATING SALES OR NEGOTIATING SALES OR CONTRACTS FOR SALES MAY BE DONE BY ANOTHER PERSON, MUST BE VIEWED AS COMING WITHIN THE SCOPE OF THE STATUTES AND HENCE AS SUBJECTING THE RETIRED OFFICER CONCERNED TO THE PROHIBITION PRESCRIBED IN 5 U.S.C. 59C OR 10 U.S.C. 6112 (B), AS APPLICABLE IN THE PARTICULAR CASE. THAT IS SO EVEN THOUGH THE ACTUAL PURCHASING OFFICERS BE DIFFERENT FROM THOSE WITH WHOM THE RETIRED OFFICER DEALS IF THE LATTER IN FACT HAVE THE AUTHORITY TO DETERMINE, OR OCCUPY A POSITION THAT WOULD SUBSTANTIALLY INFLUENCE, THE SELECTION OF THE SUPPLIER OR OF THE BRAND OF SUPPLIES AND MATERIALS THAT MAY BE PURCHASED. ACTIVITIES UNDERTAKEN TO EFFECT SALES ARE PROHIBITED EVEN THOUGH NO ACTUAL SALE OR CONTRACT MAY BE MADE.

THE ACTIVITIES SET FORTH IN PART (B), QUESTION 1, IN WHICH IT IS STATED THAT THE RETIRED OFFICER'S DUTIES "PROVIDE THAT HE CONTACT THE TRADE FOR THE PURPOSE OF PROMOTING GOOD WILL WHICH WILL RESULT IN SALES TO BE EFFECTED BY OTHER EMPLOYEES OR AGENTS OF THE EMPLOYER," MUST BE VIEWED AS COMING WITHIN THE SCOPE OF THE PHRASE ABOVE REFERRED TO AND HENCE, AS SUBJECTING THE OFFICER CONCERNED TO THE PROHIBITION PRESCRIBED IN 5 U.S.C. 59C OR 10 U.S.C. 6112 (B), AS APPLICABLE IN THE PARTICULAR CASE. QUESTION 1 IS ANSWERED ACCORDINGLY.

QUESTION 2.

DOES THE PHRASE "WHILE SO ENGAGED" LIMIT THE FORFEITURE OF RETIRED PAY TO ONLY THOSE DAYS OR PARTS THEREOF IN WHICH THE OFFICER IS ACTUALLY "ENGAGED IN THE SALE" AS CONSTRUED UNDER QUESTION 1 ABOVE?

THE PHRASE "WHILE SO ENGAGED" IS CONTAINED IN SUBSECTION (B), SECTION 6112, TITLE 10, U.S. CODE, UNDER THE HEADING " PAY: OFFICERS; WITHHELD WHILE EMPLOYED BY CERTAIN CONTRACTORS.' IN AN EXTREMELY NARROW VIEW IT MIGHT BE CONSIDERED THAT AN OFFICER WHO ENGAGES FOR HIMSELF OR OTHERS IN ,SELLING, CONTRACTING OR NEGOTIATING TO SELL," IS SO "ENGAGED" ONLY DURING THE ACTUAL PERIOD OF TIME REQUIRED IN THE SIGNING OF A PARTICULAR CONTRACT OR IN THE PERFORMANCE OF SOME PARTICULAR ACT DIRECTED TOWARDS ACCOMPLISHING THAT SPECIFIC PURPOSE. SUCH A VIEW MIGHT THEN LEAD, AS INDICATED IN THE QUESTION PRESENTED, TO THE CONCLUSION THAT WHERE AN OFFICER DEVOTES ON A CERTAIN DAY, ONLY TEN MINUTES OF HIS TIME TO SALES ACTIVITIES, THEN ONLY TEN MINUTES OF THAT PARTICULAR DAY WOULD FALL WITHIN THE AREA COVERED BY THE PROVISIONS OF 10 U.S.C. 6112 (B). IT SEEMS OBVIOUS, HOWEVER, THAT THE EXACT MOMENTS WHICH MARK THE BEGINNING AND END OF ANY PARTICULAR SALES ACTIVITY, GENERALLY CANNOT BE ACCURATELY AND DEFINITELY ESTABLISHED. MOREOVER, ASIDE FROM ANY PARTICULAR DAY, BETWEEN SALES ACTIVITIES AND NONSALES ACTIVITIES, THERE WOULD ALSO ARISE THE FURTHER QUESTION AS TO WHAT EXTENT SALES ACTIVITIES SHOULD BE ATTRIBUTABLE TO SUNDAYS, HOLIDAYS, VACATION DAYS AND OTHER PERIOD OF ABSENCES DURING WHICH THE RETIRED OFFICER CONCERNED WOULD OTHERWISE CONTINUE IN RECEIPT OF RETIRED PAY. THE PROVISIONS OF 10 U.S.C. 6112 (B/--- (AND THE SAME HOLDS TRUE WITH RESPECT TO THE PROVISIONS OF 5 U.S.C. 59C/--- MAY NOT BE ACCORDED SUCH A STRAINED CONSTRUCTION, SINCE THOSE PROVISIONS ARE CLEARLY DIRECTED TOWARD THE COMPLETE ELIMINATION OF ALL ASPECTS OF FAVORITISM TOWARD OR UNDUE OR IMPROPER INFLUENCE ON THE PART OF RETIRED MILITARY PERSONNEL IN CONNECTION WITH SALES, OR CONTRACTING TO SELL OR NEGOTIATING TO SELL TO THE GOVERNMENT--- A POSSIBILITY WHICH IMMEDIATELY ARISES UPON THE EMPLOYMENT OF A RETIRED OFFICER OF THE UNIFORMED SERVICES BY A CIVILIAN COMPANY AND WHICH CONTINUES UNABATED THROUGHOUT THE ENTIRE PERIOD SUCH EMPLOYMENT RELATIONSHIP CONTINUES IN EXISTENCE. THE LEGISLATIVE HISTORY OF THE ACT OF JULY 22, 1935, 49 STAT. 490, 34 U.S.C. 13, FROM WHICH THE PROVISION WAS DERIVED, AMPLY SUPPORTS THAT VIEW. QUESTION 2 IS ANSWERED IN THE NEGATIVE.

QUESTION 3

DOES THE PHRASE "FOR A PERIOD OF TWO YEARS AFTER RETIREMENT" IN THE ACT OF AUGUST 7, 1953 LIMIT THE PERIOD OF PROHIBITION TO THE TWO YEARS COMMENCING ON THE EFFECTIVE DATE OF RETIREMENT EXCEPT AS TO NAVY AND MARINE CORPS OFFICERS COVERED UNDER TITLE 10 U.S.C. 6112 (B/?

THIS QUESTION IS ANSWERED IN THE AFFIRMATIVE.

QUESTION 4

WHAT IS THE CONGRESSIONAL INTENT AS TO THE MEANING OF THE PHRASES "SUPPLIES OR WAR MATERIALS" AS FOUND IN THE ACT OF AUGUST 7, 1953, AND "NAVAL SUPPLIES OR WAR MATERIAL" AS CONTAINED IN THE ACT OF AUGUST 10, 1956?

THE LEGISLATIVE HISTORY OF THE PROVISIONS OF 5 U.S.C. 59C (ACT OF AUGUST 7, 1953, SECTION 1309, 67 STAT. 437), DOES NOT DISCLOSE WHAT WAS INTENDED TO BE COVERED BY THE PHRASE "ANY SUPPLIES OR WAR MATERIALS" AS USED IN THAT ACT. NOR DOES THE LEGISLATIVE HISTORY OF THE PROVISIONS OF 10 U.S.C. 6112 (B) DISCLOSE THE PRECISE INTENT OF THE PHRASE "NAVAL SUPPLIES OR WAR MATERIALS" CONTAINED THEREIN. THE WORDS "NAVAL SUPPLIES OR WAR MATERIALS" HAVE BEEN INTERPRETED TO INCLUDE ALMOST ANY CONCEIVABLE ITEM. FOR EXAMPLE, POCKET COMBS AND SOFT DRINKS HAVE BEEN HELD TO CONSTITUTE "NAVAL SUPPLIES" WITHIN THE MEANING OF THE LATTER STATUTE. (SEE JAG:II:2:JAG:MKS OF 5 MARCH 1956; G:II:RB:MMT OF 15 SEPTEMBER 1949, PUB. IN CMO 3-1950, 98). IN THE ABSENCE OF SOME LIMITATION IN THE LAW, WE FIND NO BASIS FOR REACHING A DIFFERENT CONCLUSION THAN THAT EXPRESSED BY THE JUDGE ADVOCATE GENERAL AND SINCE THE TERM "ANY SUPPLIES" CONTAINED IN 5 U.S.C. 59C IS AT LEAST AS BROAD AS THE TERM "NAVAL SUPPLIES" FOUND IN 10 U.S.C. 6112 (B), WE MUST CONCLUDE THAT ANY ARTICLE OF TANGIBLE PERSONAL PROPERTY PURCHASED BY THE DEPARTMENT OF DEFENSE, ETC., OR BY THE DEPARTMENT OF THE NAVY, RESPECTIVELY, IS WITHIN THE PURVIEW OF THE STATUTORY PROVISIONS IN QUESTION. HOWEVER, PERSONAL AND PROFESSIONAL SERVICES HAVE BEEN HELD TO BE AN EXCEPTION--- SEE B-12238, NOVEMBER 7, 1940, TO THE SECRETARY OF THE NAVY. QUESTION 4 IS ANSWERED ACCORDINGLY. QUESTION 5

WHAT ARE AGENCIES OF THE DEPARTMENT OF DEFENSE?

IN THE COMMENTS WHICH APPEAR IN YOUR LETTER UNDER QUESTION 5, REFERENCE IS MADE TO THE DECISION OF THE UNITED STATES SUPREME COURT IN THE CASE OF STANDARD OIL COMPANY V. JOHNSON, 316 U.S. 481 (1942), IN WHICH IT WAS HELD THAT ARMY POST EXCHANGES ARE ARMS OF THE FEDERAL GOVERNMENT AND INTEGRAL PARTS OF THE WAR DEPARTMENT. IN THAT CONNECTION, THE FOLLOWING POINT IS RAISED BY YOU.

CAN IT BE SAID, HOWEVER, THAT ANY SALE TO A POST EXCHANGE OR A SHIP'S STORE, WHICH HAVE SOME OF THE CHARACTERISTICS OF A DEPARTMENT STORE IN THE DISPLAY AND SALE OF CIVILIAN CONSUMPTIVE GOODS, CONSTITUTES A SALES OF SUPPLIES TO AN AGENCY OF THE DEPARTMENT OF DEFENSE? YOUR OFFICE HAS DISTINGUISHED BETWEEN OFFICERS MESSES, CLOSED AND OFFICERS MESSES, OPEN. IN THE INSTANT CASE, CONSTRUING THE FACTS MOST STRICTLY AGAINST THE OFFICER, SALES, IF ANY, WERE TO OFFICERS' CLUBS, C.P.O. CLUBS, NAVY EXCHANGES, AND SIMILAR ORGANIZATIONS.

THE DEPARTMENT OF DEFENSE IS COMPOSED OF (1) THE DEPARTMENT OF THE ARMY, THE DEPARTMENT OF THE NAVY, AND THE DEPARTMENT OF THE AIR FORCE AND (2) "ALL OTHER AGENCIES" CREATED UNDER SECTION 171, 171A, 171C 171I, 411A, 626 AND 626C, TITLE 5, U.S.C. SEE 5 U.S.C. 171B. INASMUCH AS THE DEPARTMENT OF THE NAVY IS A PART OF THE DEPARTMENT OF DEFENSE, A SALE TO ANY INTEGRAL PART OF THE NAVY WOULD ALSO CONSTITUTE A SALE TO AN "AGENCY" OF THE DEPARTMENT OF DEFENSE.

COMMISSIONED OFFICERS' MESSES (OPEN OR CLOSED) ARE OPERATED AS AN INTEGRAL PART OF THE NAVY. IN THE SAME MANNER, CHIEF PETTY OFFICERS' MESSES AND ENLISTED MEN'S CLUBS--- ESTABLISHED FOR THE PURPOSE OF PROMOTING AND MAINTAINING THE WELL BEING, MORALE, AND EFFICIENCY OF ENLISTED PERSONNEL--- ALSO ARE OPERATED AS INTEGRAL PARTS OF THE NAVY. NAVY (POST) EXCHANGES, SHIPS' STORES ACTIVITIES AND OTHER ORGANIZATIONS AND CLUBS, INCLUDING WELFARE AND RECREATIONAL CENTERS WHICH ARE EITHER ESTABLISHED AND CREATED THROUGH THE USE OF APPROPRIATED FUNDS OR WHICH ARE MAINTAINED FROM THE PROFITS INDIRECTLY DERIVED FROM THE USE OF APPROPRIATED MONEYS, PROPERLY ARE TO BE CONSIDERED AS OFFICIAL ACTIVITIES AND INSTRUMENTALITIES FUNCTIONING UNDER OFFICIAL SUPERVISION OF THE DEPARTMENT OF THE NAVY. THEREFORE, SALES TO SUCH ACTIVITIES OF THE DEPARTMENT OF THE NAVY WOULD LIE BOTH WITHIN THE SCOPE OF THE PROVISIONS OF 5 U.S.C. 59C REGARDING SALES TO ANY "AGENCIES" OF THE DEPARTMENT OF DEFENSE, AND THE PROVISIONS OF 10 U.S.C. 6112 (B), CONCERNING SALES TO THE DEPARTMENT OF THE NAVY. BY ARTICLE 1975, NAVY REGULATIONS 1948, THE SECRETARY OF THE NAVY PROVIDES FOR THE ESTABLISHMENT AND MAINTENANCE OF RECREATION FUNDS AND DELEGATES TO THE CHIEF OF NAVAL PERSONNEL THE AUTHORITY AND RESPONSIBILITY FOR REGULATING SUCH FUNDS THROUGH COMMANDING OFFICERS WHO, WE UNDERSTAND, DETAIL OFFICERS TO RECREATION COUNCILS TO ADMINISTER THEM. HENCE NAVY OFFICERS, UNDER NAVY REGULATIONS, HANDLE AND ARE RESPONSIBLE FOR THE RECREATION FUNDS WHICH, IT IS UNDERSTOOD, ARE OBTAINED FROM THE PROFITS OF SHIPS' STORES, NAVY EXCHANGES, OTHER AUTHORIZED ACTIVITIES, AND SIMILAR NONAPPROPRIATED FUND SOURCES. RECREATION FUNDS ARE UNDER THE ADMINISTRATIVE CONTROL OF THE NAVY DEPARTMENT AND NO PERSON HAS ANY INTEREST THEREIN. HENCE, THE CONCLUSION APPEARS TO BE WARRANTED THAT A RECREATION FUND IS AN INTEGRAL PART OF THE NAVY WITHIN THE MEANING OF 5 U.S.C. 59C AND 10 U.S.C. 6112 (B). SEE OPINION OF THE JUDGE ADVOCATE GENERAL OF THE NAVY IN NAVY CMO NO. 4-1949, P.81, HOLDING THAT A NAVY RECREATION FUND DERIVED FROM NONAPPROPRIATED MONEYS IS A FEDERAL AGENCY UNDER THE FEDERAL TORT CLAIMS ACT, 60 STAT. 842; STANDARD OIL CO. V. JOHNSON, 316 U.S. 481; AND 5 U.S.C. 411A (A). COMPARE ROGER V. ELROD, 125 F. SUPP. 62 AND THE CASES THERE CITED. QUESTION 5 IS ANSWERED ACCORDINGLY.

SPECIFICALLY RESPONDING TO THE CLOSING COMMENTS IN YOUR LETTER, YOU ARE ADVISED THAT, BASED ON THE INFORMATION PRESENTLY AVAILABLE IN COMMANDER ANTHONY'S CASE, WE ARE OF THE VIEW THAT DURING THE 5-WEEK PERIOD HE WAS ATTENDING A TRAINING SCHOOL HIS STATUS DID NOT COME WITHIN THE PURVIEW OF THE ABOVE-CITED STATUTORY PROVISIONS. FOR THE PERIOD THEREAFTER, UNTIL ON OR ABOUT JUNE 11, 1958, WHEN IT APPEARS THAT HE WAS REASSIGNED TO OTHER DUTIES, THE NATURE OF HIS EMPLOYMENT WOULD APPEAR TO PLACE HIM WITHIN THE SCOPE OF THE PROHIBITIONS IN 5 U.S.C. 59C AND 10 U.S.C. 6112 (B) AND, ON THE PRESENT RECORD, WE MUST CONCLUDE THAT HE IS NOT ENTITLED TO RETIRED PAY FOR THAT PERIOD.