B-138265, JANUARY 29, 1959, 38 COMP. GEN. 525

B-138265: Jan 29, 1959

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EXPERTS AND CONSULTANTS - RETROACTIVE SALARY INCREASES EXPERTS AND CONSULTANTS WHO ARE EMPLOYED UNDER PERSONAL SERVICE CONTRACTS WHICH STIPULATE THE RATE OF PAY TO BE RECEIVED BUT DO NOT CONTAIN ANY SALARY ADJUSTMENT PROVISION ARE BOUND BY THE RATE OF PAY STIPULATED AND ARE NOT ENTITLED TO THE RETROACTIVE SALARY INCREASE AUTHORIZED IN SECTION 7 OF THE FEDERAL EMPLOYEES SALARY INCREASE ACT OF 1958. THERE IS NO AUTHORITY IN THE AGENTS AND OFFICERS OF THE GOVERNMENT TO MODIFY OR WAIVE THE CONTRACTS TO GRANT RETROACTIVE SALARY INCREASES WITHOUT A COMPENSATORY BENEFIT TO THE GOVERNMENT. THE QUESTIONS PRESENTED IN YOUR LETTER ARE STATED AS FOLLOWS: A. COMPTROLLER GENERAL IN CG 35-263 (B- 125392) RULES THAT CONSULTANT PERSONNEL WERE ENTITLED TO THE 1955 INCREASE UNDER THE PROVISIONS OF SECTION 8.

B-138265, JANUARY 29, 1959, 38 COMP. GEN. 525

EXPERTS AND CONSULTANTS - RETROACTIVE SALARY INCREASES EXPERTS AND CONSULTANTS WHO ARE EMPLOYED UNDER PERSONAL SERVICE CONTRACTS WHICH STIPULATE THE RATE OF PAY TO BE RECEIVED BUT DO NOT CONTAIN ANY SALARY ADJUSTMENT PROVISION ARE BOUND BY THE RATE OF PAY STIPULATED AND ARE NOT ENTITLED TO THE RETROACTIVE SALARY INCREASE AUTHORIZED IN SECTION 7 OF THE FEDERAL EMPLOYEES SALARY INCREASE ACT OF 1958, AND THERE IS NO AUTHORITY IN THE AGENTS AND OFFICERS OF THE GOVERNMENT TO MODIFY OR WAIVE THE CONTRACTS TO GRANT RETROACTIVE SALARY INCREASES WITHOUT A COMPENSATORY BENEFIT TO THE GOVERNMENT.

TO LIEUTENANT COLONEL C. W. FARNUM, DEPARTMENT OF THE ARMY, JANUARY 29, 1959:

THE CHIEF, ENTITLEMENTS AND DISBURSEMENTS DIVISION, OFFICE, CHIEF OF FINANCE, BY SECOND ENDORSEMENT DATED DECEMBER 23, 1958, REFERENCE FINEC 201 SCHMIDT, DR. UWE, FORWARDED TO US YOUR LETTER OF AUGUST 22, 1958, ECFA, REQUESTING OUR DECISION CONCERNING THE PROPRIETY OF PAYING TWO VOUCHERS TRANSMITTED WITH YOUR LETTER. THE VOUCHERS, AND RELATED PAPERS, REPRESENT RETROACTIVE COMPENSATION UNDER SECTION 7 (A) OF THE FEDERAL EMPLOYEES SALARY INCREASE ACT OF 1958, 72 STAT. 212, TO A GERMAN NATIONAL EMPLOYED UNDER A PERSONAL SERVICE CONTRACT.

THE QUESTIONS PRESENTED IN YOUR LETTER ARE STATED AS FOLLOWS:

A. DOES SECTION 7 OF THE FEDERAL EMPLOYEES SALARY INCREASE ACT OF 1958 AUTHORIZE INCREASED PAYMENT TO EXPERTS AND CONSULTANTS HIRED UNDER A PERSONAL SERVICES CONTRACT (CONSULTANT) CITING AS AUTHORITY TITLE 10, U.S.C., SECTION 2304 (A) (4) AND TITLE 5, U.S.C., SECTION 55A OR SECTION 2 (C) (4) ASP ACT OF 1947 ( PL 413, 80TH CONGRESS) AND SECTION 15, PL 600, 79TH CONGRESS? IN THIS RESPECT, COMPTROLLER GENERAL IN CG 35-263 (B- 125392) RULES THAT CONSULTANT PERSONNEL WERE ENTITLED TO THE 1955 INCREASE UNDER THE PROVISIONS OF SECTION 8, FEDERAL EMPLOYEES SALARY INCREASE ACT OF 1955.

B. IF THE ANSWER TO A. ABOVE IS IN THE AFFIRMATIVE, DOES IT APPLY EQUALLY TO NATIONALS OF A FOREIGN GOVERNMENT WHEN SO EMPLOYED AND PRIOR TO THE TIME THEY TAKE OUT THEIR "FIRST PAPERS" FOR U.S. CITIZENSHIP?

C. IF THE ANSWER TO A. ABOVE IS IN THE AFFIRMATIVE, MAY A DISBURSING OFFICER PAY THE INCREASE WITHOUT A MODIFICATION OF THE CONTRACT CITING THE STATUTORY PROVISIONS ( SECTION 7, FESIA, 1958 AND CG 35-263) OR MUST THE CONTRACT ACTUALLY BE MODIFIED TO AUTHORIZE SUCH PAYMENT? IN THIS RESPECT, THE ORIGINAL CONTRACTS REQUIRED APPROVAL BY THE SECRETARY OF THE ARMY AND A MODIFICATION THEREOF WOULD APPEAR TO REQUIRE THE SECRETARY'S APPROVAL.

D. FURTHER, IF THE ANSWER TO A. ABOVE IS IN THE AFFIRMATIVE, IS THE INCREASE MANDATORY OR MAY THE ADMINISTRATIVE OFFICIALS ACTING IN BEHALF OF THE SECRETARY GRANT OR DENY SUCH INCREASES AT THEIR DISCRETION?

E. SINCE THE PERTINENT CONTRACTS DO NOT STATE DEFINITE PERIODS WHEN THE EMPLOYEES THEREUNDER ARE TO BE PAID, I.E., EACH TWO WEEKS, MONTHLY OR OTHERWISE, AND THE EMPLOYEES ARE ACTUALLY PAID EACH TWO-WEEK PERIOD SIMILAR TO CLASSIFIED EMPLOYEES, FROM WHAT DATE WOULD THE RETROACTIVE INCREASE BE PAYABLE, I.E., THE FIRST OF JANUARY OR THE FIRST DAY OF THE FIRST TWO-WEEK (OR OTHER) PERIOD ACTUALLY PAID TO THE EMPLOYEES AFTER THE FIRST OF JANUARY?

THE QUESTIONS WILL BE ANSWERED ONLY SO FAR AS REQUIRED INCIDENT TO THE APPROPRIATE DISPOSITION OF THE VOUCHERS HERE INVOLVED. 26 COMP. GEN. 797, 799.

SECTION 7 (A) READS, IN PERTINENT PART, AS FOLLOWS.

NOTWITHSTANDING SECTION 3679 OF THE REVISED STATUTES, AS AMENDED (31 U.S.C. 665), THE RATES OF COMPENSATION OF OFFICERS AND EMPLOYEES OF THE FEDERAL GOVERNMENT WHOSE RATES OF COMPENSATION ARE FIXED BY ADMINISTRATIVE ACTION PURSUANT TO LAW AND ARE NOT OTHERWISE INCREASED BY THIS ACT ARE HEREBY AUTHORIZED TO BE INCREASED, EFFECTIVE ON OR AFTER THE FIRST DAY OF THE FIRST PAY PERIOD WHICH BEGAN ON OR AFTER JANUARY 1, 1958, BY AMOUNTS NOT TO EXCEED THE INCREASES PROVIDED BY THIS ACT FOR CORRESPONDING RATES OF COMPENSATION IN THE APPROPRIATE SCHEDULE OR SCALE OF PAY.

IN OUR DECISION 35 COMP. GEN. 263, WE CONCLUDED THAT THE PROVISIONS OF SECTION 8 (A) FEDERAL EMPLOYEES SALARY INCREASE ACT OF 1955, 69 STAT. 178, 5 U.S.C. 1113 NOTE, WHICH ARE THE SAME AS THOSE OF SECTION 7 (A) HERE INVOLVED, WERE APPLICABLE TO EXPERTS AND CONSULTANTS EMPLOYED SOLELY UPON A PERSONAL SERVICE BASIS IN ACCORDANCE WITH SECTION 15 OF THE ACT OF AUGUST 2, 1946, 60 STAT. 810, 5 U.S.C. 55A. THAT DECISION, HOWEVER, DID NOT HOLD THAT PERSONAL SERVICE CONTRACTS WITH EXPERTS AND CONSULTANTS CONTAINING NO PROVISION FOR PAY ADJUSTMENTS COULD BE RETROACTIVELY MODIFIED TO PROVIDE AN INCREASED RATE OF PAY.

THE RECORD SHOWS THAT THE TWO CONTRACTS, BOTH OF WHICH HAVE BEEN FULLY PERFORMED, EACH PROVIDES FOR A SPECIFIC RATE OF COMPENSATION AND COVERS A SPECIFIC PERIOD OF TIME. NO PROVISION WAS MADE IN EITHER CONTRACT FOR ANY CHANGE IN THE RATE OF PAY STIPULATED THEREIN. THE ACCEPTANCE BY THE GOVERNMENT OF THE OFFER TO FURNISH THE SERVICES REQUIRED AT THE RATE OF COMPENSATION STATED IN EACH CONTRACT GAVE RISE TO A BINDING CONTRACT IN EACH INSTANCE. WE DO NOT HAVE, NOR DO THE AGENTS AND OFFICERS OF THE UNITED STATES GOVERNMENT HAVE, ANY AUTHORITY TO WAIVE CONTRACTUAL RIGHTS WHICH HAVE ACCRUED TO THE GOVERNMENT, OR TO MODIFY CONTRACTS WITHOUT A COMPENSATORY BENEFIT TO THE GOVERNMENT. SEE B-130291, JULY 15, 1957. ACCORDINGLY, SO FAR AS IT RELATES TO THE CONTRACTS HERE INVOLVED, QUESTION A IS ANSWERED IN THE NEGATIVE MAKING IT UNNECESSARY TO ANSWER THE REMAINING QUESTIONS.

IT FOLLOWS THAT SINCE DR. SCHMIDT HAS BEEN PAID THE AGREED UPON AMOUNT FOR EACH OF THE CONTRACTS INVOLVED FOR THE SERVICES RENDERED PAYMENT OF ANY AMOUNTS IN ADDITION THERETO ARE NOT AUTHORIZED.