B-140427, SEPTEMBER 16, 1959, 39 COMP. GEN. 201

B-140427: Sep 16, 1959

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

WHICH ARE USED FOR THE PURCHASE OUTSIDE OF THE UNITED STATES OF GASOLINE. FOR VEHICLES USED FOR OFFICIAL BUSINESS AND WHICH ARE REDEEMABLE FOR CASH IF UNUSED. IS NOT IN VIOLATION OF THE ADVANCE PAYMENT PROHIBITION IN SECTION 3648. PROVIDED THAT ADEQUATE ADMINISTRATIVE SAFEGUARDS ARE MAINTAINED. REQUESTING OUR DECISION AS TO WHETHER YOU ARE AUTHORIZED TO PAY THE VOUCHER ENCLOSED WITH YOUR LETTER FOR $18.50 STATED IN FAVOR OF JULIO PONCE. WE HELD THAT "THE INTENT OF THE FOREGOING PROVISION OF LAW IS THAT THE UNITED STATES SHOULD NOT PAY FOR ANY WORK OR MATERIALS IN ADVANCE OF THE ACTUAL OR CONSTRUCTIVE RECEIPT THEREOF OR IN AN AMOUNT IN EXCESS OF THE VALUE THEREOF.'. WE NOTE YOUR STATEMENT THAT COUPON BOOKS ARE BEING PURCHASED FROM THE COMPANY NAMED HEREIN AND.

B-140427, SEPTEMBER 16, 1959, 39 COMP. GEN. 201

ADVANCE PAYMENT PROHIBITION - GASOLINE COUPON BOOKS - PURCHASES OUTSIDE UNITED STATES REIMBURSEMENT FOR COUPON BOOKS, WHICH ARE USED FOR THE PURCHASE OUTSIDE OF THE UNITED STATES OF GASOLINE, AT REDUCED PRICES, FOR VEHICLES USED FOR OFFICIAL BUSINESS AND WHICH ARE REDEEMABLE FOR CASH IF UNUSED, IS NOT IN VIOLATION OF THE ADVANCE PAYMENT PROHIBITION IN SECTION 3648, REVISED STATUTES, 31 U.S.C. 529, WHICH PRECLUDES PAYMENT FOR WORK OR MATERIALS IN ADVANCE OF ACTUAL OR CONSTRUCTIVE RECEIPT OR IN AN AMOUNT IN EXCESS OF THE VALUE OF THE WORK OR MATERIALS, PROVIDED THAT ADEQUATE ADMINISTRATIVE SAFEGUARDS ARE MAINTAINED.

TO CAPTAIN H. D. MILLICAN, DEPARTMENT OF THE ARMY, SEPTEMBER 16, 1959:

ON AUGUST 6, 1959, FILE FINXE-B 167/28 JUL 59 PONCE, JULIO, THE OFFICE OF THE CHIEF OF FINANCE, DEPARTMENT OF THE ARMY, FORWARDED HERE YOUR LETTER OF JULY 17, 1959, REQUESTING OUR DECISION AS TO WHETHER YOU ARE AUTHORIZED TO PAY THE VOUCHER ENCLOSED WITH YOUR LETTER FOR $18.50 STATED IN FAVOR OF JULIO PONCE, AN EMPLOYEE IN THE OFFICE OF THE U.S. ARMY ATTACHE, AMERICAN EMBASSY, HAVANA, CUBA. THE SUM CLAIMED REPRESENTS PERSONAL FUNDS EXPENDED DURING AUGUST 1958, FOR ONE GASOLINE COUPON BOOK PROCURED FROM ESSO STANDARD OIL, S. A. ( DIVISION DE CUBA), HAVANA, CUBA.

YOU QUESTION THE PROPRIETY OF PAYING THE VOUCHER BECAUSE (1) CURRENT DEPARTMENT OF THE ARMY REGULATIONS DO NOT PROVIDE FOR THE PURCHASE OF GASOLINE COUPON BOOKS AND, (2) THE COMPTROLLER GENERAL IN DECISION DATED FEBRUARY 16, 1929, 8 COMP. GEN. 454, HELD THAT PAYMENT IN ADVANCE FOR COUPON BOOKS TO BE USED IN THE PROCUREMENT OF GASOLINE FOR THE OPERATION OF AN AUTOMOBILE UNDER GOVERNMENT CONTROL WOULD CONTRAVENE SECTION 3648, REVISED STATUTES, 31 U.S.C. 529. THAT SECTION PROVIDES IN PERTINENT PART AS FOLLOWS:

NO ADVANCE OF PUBLIC MONEY SHALL BE MADE IN ANY CASE WHATEVER. AND IN ALL CASES OF CONTRACTS FOR THE PERFORMANCE OF ANY SERVICE, OR THE DELIVERY OF ARTICLES OF ANY DESCRIPTION, FOR THE USE OF THE UNITED STATES, PAYMENT SHALL NOT EXCEED THE VALUE OF THE SERVICE RENDERED, OR OF THE ARTICLES DELIVERED PREVIOUSLY TO SUCH PAYMENT * * *

IN 32 COMP. GEN. 563, WE HELD THAT "THE INTENT OF THE FOREGOING PROVISION OF LAW IS THAT THE UNITED STATES SHOULD NOT PAY FOR ANY WORK OR MATERIALS IN ADVANCE OF THE ACTUAL OR CONSTRUCTIVE RECEIPT THEREOF OR IN AN AMOUNT IN EXCESS OF THE VALUE THEREOF.'

THE RECORD REFLECTS THAT A COUPON BOOK, SUCH AS HERE INVOLVED, COSTS $18.50 AND CONTAINS 20 COUPONS EACH GOOD FOR FIVE GALLONS OF GASOLINE WHEN PRESENTED TO ANY INDEPENDENT DISTRIBUTOR FOR THE COMPANY CONCERNED WITHIN THE REPUBLIC OF CUBA. WE NOTE YOUR STATEMENT THAT COUPON BOOKS ARE BEING PURCHASED FROM THE COMPANY NAMED HEREIN AND, ALSO, THE SINCLAIR CUBA OIL CO. SA, FOR THE EXCLUSIVE USE OF PERSONNEL ASSIGNED TO THE AMERICAN EMBASSY IN CUBA. EACH COUPON CONTAINS A SERIAL NUMBER AS WELL AS A SPACE FOR THE LICENSE PLATE NUMBER OF THE VEHICLE FOR WHICH ITS IS USABLE. UNSUED PORTIONS OF COUPON BOOKS ARE REDEEMABLE AT PURCHASE PRICE UPON SURRENDER TO THE COMPANY CONCERNED. ADEQUATE AND NECESSARY SAFEGUARDS ARE REPORTED TO HAVE BEEN ESTABLISHED TO PROTECT THE INTERESTS OF THE GOVERNMENT AND TO INSURE THAT THE COUPONS ARE USED FOR OFFICIAL PURPOSES ONLY. GASOLINE PURCHASED BY COUPON IS TAX EXEMPT BY THE CUBAN GOVERNMENT AND COSTS ONLY $0.185 PER GALLON, WHEREAS THE UNIT PRICE PER GALLON WHEN PROCURED OTHER THAN BY COUPON (CREDIT OR OTHERWISE) IS $0.37, RESULTING IN A SAVING OF NOT LESS THAN 50 PERCENT. THE REVERSE SIDE OF THE VOUCHER CONTAINS THE STATEMENT " NEGOTIATED IN ACCORDANCE WITH 10 USC-2304-/A) (6)" TOGETHER WITH A CERTIFICATION THAT SUCH SUPPLIES OR SERVICES "HAVE BEEN RECEIVED AND ACCEPTED.' TITLE 10, SECTION 2304 (A) (6) PROVIDES THAT THE HEAD OF AN AGENCY MAY NEGOTIATE A PURCHASE OR CONTRACT FOR PROPERTY OR SERVICES WITHOUT ADVERTISING IF THE PURCHASE OR CONTRACT "IS FOR PROPERTY OR SERVICES TO BE PROCURED AND USED OUTSIDE THE UNITED STATES, ITS TERRITORIES, AND ITS POSSESSIONS.'

IN LIGHT OF THE REPORTED ADMINISTRATIVE SAFEGUARDS, AND SINCE THE PURCHASE OF GASOLINE COUPON BOOKS UNDER THE RELATED CIRCUMSTANCE IS DEFINITELY IN THE GOVERNMENT'S INTEREST, AND AS THE COST PRICE OF ANY UNUSED COUPON IS READILY REDEEMABLE FOR CASH, WE BELIEVE THAT PAYMENT FOR THE PURCHASE IN QUESTION IS NOT OBJECTIONABLE, AND THAT SECTION 3648 OF THE REVISED STATUTES SHOULD NOT BE CONSTRUED AS PROHIBITING THE PROCUREMENT OF GASOLINE NECESSARY FOR OFFICIAL USE THROUGH THE COUPON PURCHASE PLAN NOW IN OPERATION. SEE 36 COMP. GEN. 829. THE PAYMENT HERE DID NOT EXCEED THE ACTUAL CASH VALUE OF THE COUPON BOOK RECEIVED. COMPARE 9 COMP. GEN. 151; 14 ID. 322. CONSEQUENTLY, THE SUBMITTED VOUCHER MAY BE PAID, IF OTHERWISE CORRECT.