B-146728, OCTOBER 22, 1962, 42 COMP. GEN. 212

B-146728: Oct 22, 1962

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ETC. - SPECIFIC APPROPRIATION REQUIREMENT MINOR CONSTRUCTION PROJECTS INCIDENT TO THE PROPERTY DISPOSAL PROGRAM OF THE DEPARTMENT OF DEFENSE SUCH AS CONSTRUCTION OF CONCRETE SEGREGATION BINS AND TRANSITORY SHELTERS WHICH ARE NOT TEMPORARY STRUCTURES EVEN THOUGH CONSTRUCTED OF PREFABRICATED MATERIALS. MUST BE REGARDED AS PUBLIC BUILDINGS AND PUBLIC IMPROVEMENTS FOR WHICH SPECIFIC APPROPRIATIONS ARE REQUIRED UNDER SECTION 3733. TO FINANCE THE COST OF CONSTRUCTING PUBLIC BUILDINGS OR PUBLIC IMPROVEMENTS FOR THE DISPOSAL PROGRAM IS NOT PROPER. THAT SUCH CONCLUSION IS TOTALLY DEVOID OF SUPPORT FROM THE LANGUAGE OF THE APPROPRIATION ACT. CONCRETE SEGREGATION BINS AND OTHER WORK FINANCED FROM OPERATION AND MAINTENANCE FUNDS AS MINOR CONSTRUCTION ARE AS MUCH A DIRECT COST OF THE DISPOSAL PROGRAM AS THE CANVAS TARPAULINS PREVIOUSLY USED TO PROTECT PROPERTY AWAITING SALE OR THE SALARIES OF CIVILIAN PERSONNEL CONNECTED WITH THE DISPOSAL PROGRAM.

B-146728, OCTOBER 22, 1962, 42 COMP. GEN. 212

APPROPRIATIONS - AVAILABILITY - CONSTRUCTION, ETC. - SPECIFIC APPROPRIATION REQUIREMENT MINOR CONSTRUCTION PROJECTS INCIDENT TO THE PROPERTY DISPOSAL PROGRAM OF THE DEPARTMENT OF DEFENSE SUCH AS CONSTRUCTION OF CONCRETE SEGREGATION BINS AND TRANSITORY SHELTERS WHICH ARE NOT TEMPORARY STRUCTURES EVEN THOUGH CONSTRUCTED OF PREFABRICATED MATERIALS, MOVABLE AND ACCOUNTED FOR AS PERSONAL PROPERTY, MUST BE REGARDED AS PUBLIC BUILDINGS AND PUBLIC IMPROVEMENTS FOR WHICH SPECIFIC APPROPRIATIONS ARE REQUIRED UNDER SECTION 3733, REVISED STATUTES, 41 U.S.C. 12, AND, THEREFORE, THE USE OF OPERATION AND MAINTENANCE APPROPRIATIONS MADE AVAILABLE FOR THE EXPENSES OF PREPARATION FOR DISPOSAL AND DISPOSAL OF MILITARY SUPPLIES, EQUIPMENT AND MATERIAL IN SECTION 511 OF THE DEPARTMENT OF DEFENSE APPROPRIATION ACT, 1963, 76 STAT. 329, TO FINANCE THE COST OF CONSTRUCTING PUBLIC BUILDINGS OR PUBLIC IMPROVEMENTS FOR THE DISPOSAL PROGRAM IS NOT PROPER.

TO THE SECRETARY OF DEFENSE, OCTOBER 22, 1962:

WE REFER TO THE LETTER DATED SEPTEMBER 24, 1962, OF THE DEPUTY SECRETARY OF DEFENSE CONCERNING OUR REPORT TO THE CONGRESS ENTITLED "REVIEW OF THE USE OF PROCEEDS FROM SCRAP, SALVAGE, AND SURPLUS PROPERTY SALES FOR CONSTRUCTION PURPOSES BY THE AIR FORCE LOGISTICS COMMAND, DEPARTMENT OF THE AIR FORCE.'

THE DEPUTY SECRETARY STATES THAT OUR REPORT CONTENDS THAT MINOR CONSTRUCTION PROJECTS PROPERLY CHARGED TO OPERATION AND MAINTENANCE FUNDS UNDER 10 U.S.C. 2674 (E) REPRESENT "CAPITAL MPROVEMENT" AND THEREFORE CANNOT BE CONSIDERED A DIRECT EXPENSE OF THE DISPOSAL PROGRAM, BUT THAT SUCH CONCLUSION IS TOTALLY DEVOID OF SUPPORT FROM THE LANGUAGE OF THE APPROPRIATION ACT; THAT SINCE THE TRANSITORY SHELTERS, CONCRETE SEGREGATION BINS AND OTHER WORK FINANCED FROM OPERATION AND MAINTENANCE FUNDS AS MINOR CONSTRUCTION ARE AS MUCH A DIRECT COST OF THE DISPOSAL PROGRAM AS THE CANVAS TARPAULINS PREVIOUSLY USED TO PROTECT PROPERTY AWAITING SALE OR THE SALARIES OF CIVILIAN PERSONNEL CONNECTED WITH THE DISPOSAL PROGRAM, THE DEPARTMENT OF DEFENSE MUST TAKE EXCEPTION TO OUR POSITION IN THIS MATTER AND INSIST THAT EXPENSES OF THE DISPOSAL PROGRAM INCLUDING MINOR CONSTRUCTION WHICH ARE PROPERLY CHARGED TO OPERATION AND MAINTENANCE FUNDS MAY BE REIMBURSED FROM THE PROCEEDS OF SURPLUS PROPERTY SALES; AND, IN CONCLUSION, THAT IN LIGHT OF THE BENEFITS OF THE DISPOSAL PROGRAM AND THE CLEAR LEGAL BASIS THEREFOR, THE DEPARTMENT OF DEFENSE WILL CONTINUE TO MAKE USE OF TRANSITORY SHELTERS WITHIN THE AUTHORITY GRANTED BY THE CONGRESS.

IN ORDER TO AVOID ANY MISUNDERSTANDING AS TO THE BASIS OF OUR CONCLUSION IN THIS MATTER AND TO FACILITATE THE SETTLEMENT OF THE ACCOUNTS OF THE ACCOUNTABLE OFFICERS CONCERNED, IT APPEARS NECESSARY TO REVIEW THE LAWS INVOLVED, THEIR LEGISLATIVE HISTORIES, AND THE INTERPRETATIONS THEREOF CONTAINED IN NUMEROUS AND CONSISTENT DECISIONS OF THE ACCOUNTING OFFICERS OVER A LONG PERIOD OF TIME.

PRIOR TO 1948, THE DEPARTMENT OF DEFENSE RELIED UPON THE PROVISIONS OF SECTION 1 OF THE ACT OF JUNE 8, 1896, 29 STAT. 268, AS AMENDED, 31 U.S.C. 489, AS AUTHORITY TO USE THE PROCEEDS OF SALES OF OLD MATERIAL, CONDEMNED STORES, SUPPLIES, OR OTHER PUBLIC PROPERTY FOR "EXPENSES OF SUCH SALES, AS APPROVED BY THE GENERAL ACCOUNTING OFFICE.' SHORTLY AFTER ENACTMENT OF THIS PROVISION OF LAW, THE THEN COMPTROLLER OF THE TREASURY ON JANUARY 9, 1897, ISSUED REGULATIONS AND INSTRUCTIONS TO THE EFFECT THAT "THE EXPENSES OF SALE PAYABLE FROM THE GROSS PROCEEDS ARE SUCH AS PERTAIN DIRECTLY TO THE SALE IN QUESTION, SUCH AS AUCTIONEER'S FEES, CARTAGE TO PLACE OF SALE, COST OF INSPECTION IF AN INSPECTOR BE HIRED FOR THAT PURPOSE, ETC.' SEE 3 COMP. DEC. 744, 746. NUMEROUS DECISIONS OF THE ACCOUNTING OFFICERS OF THE GOVERNMENT HAVE HELD GENERALLY THAT NO EXPENSES INCURRED IN CONNECTION WITH THE PREPARATION OF THE PROPERTY FOR SALE INCLUDING THE PURCHASE OF MACHINERY OR APPLIANCES, SHOULD BE CHARGED TO THE PROCEEDS OF SALE AND THAT THE COSTS INCURRED IN CONNECTION WITH THE TRUCKING, TRANSPORTATION, HANDLING, SORTING, PACKING OF THE SUPPLIES AND EQUIPMENT, AS WELL AS THE PREPARATION OF SPECIFICATIONS, INVITATIONS TO BID, OPENING OF BIDS, AWARDS OF SALES AND ADMINISTERING OF CONTRACTS OF SALE THEREFOR, MAY BE CHARGED TO THE PROCEEDS OF SALES ONLY IF SUCH SERVICES WERE DIRECTLY CONNECTED WITH THE SALES AND WERE PERFORMED BY PERSONNEL EMPLOYED EXCLUSIVELY FOR THE SALES ACTIVITIES RATHER THAN BY REGULAR EMPLOYEES. SEE 18 COMP. DEC. 5; 20 ID. 20; 5 COMP. GEN. 680; 6 ID. 348; 15 ID. 886; 16 ID. 876; B- 30633, DECEMBER 31, 1942; 28 COMP. GEN. 594; 33 ID. 31; AND 37 ID. 59.

IT WAS IN THE LIGHT OF THESE DECISIONS HOLDING THAT THE COSTS OF PREPARATION OF THE PROPERTY FOR SALE WERE NOT "EXPENSES OF SUCH SALES" SO AS TO BE CHARGEABLE TO THE PROCEEDS OF SALE THAT THE FOLLOWING PROVISO WAS INCLUDED IN THE APPROPRIATION "ORDNANCE SERVICE AND SUPPLIES, ARMY" CONTAINED IN THE MILITARY APPROPRIATION ACT, 1948, PUBLIC LAW 267, APPROVED JULY 30, 1947, 61 STAT. 551, 562 (SEE PAGES 1026-1028 OF THE HOUSE HEARINGS ON THE MILITARY ESTABLISHMENT APPROPRIATION BILL FOR 1948):

PROVIDED, THAT, NOTWITHSTANDING THE PROVISIONS OF ANY OTHER LAW, NOT MORE THAN $25,000,000 OF THE AMOUNTS RECEIVED BY THE WAR DEPARTMENT DURING THE FISCAL YEAR 1948 AS PROCEEDS FROM THE SALE OF SCRAP OR SALVAGE MATERIAL SHALL BE AVAILABLE FOR EXPENSES OF TRANSPORTATION, DEMILITARIZATION, AND OTHER PREPARATION FOR SALE OR SALVAGE OF MILITARY SUPPLIES, EQUIPMENT, AND MATERIEL:

SIMILAR PROVISIONS OF LAW HAVE BEEN INCLUDED IN ALL SUBSEQUENT ANNUAL APPROPRIATION ACTS FOR THE MILITARY DEPARTMENTS WITH ONLY MINOR CHANGES OTHER THAN THE ELIMINATION OF THE DOLLAR LIMITATION. WE HAVE FOUND NOTHING IN THE LEGISLATIVE HISTORIES OF SUCH ACTS INDICATING THAT THE CHANGE IN THE LANGUAGE FROM "FOR EXPENSES OF TRANSPORTATION, DEMILITARIZATION, AND OTHER PREPARATION FOR SALE OR SALVAGE OF MILITARY SUPPLIES, EQUIPMENT, AND MATERIEL" TO "FOR ALL EXPENSES INVOLVED IN THE PREPARATION FOR DISPOSAL AND FOR THE DISPOSAL OF MILITARY SUPPLIES, EQUIPMENT, AND MATERIEL," WHICH LATTER LANGUAGE WAS USED IN THE FISCAL YEAR 1959 AND SUBSEQUENT APPROPRIATION ACTS, WAS INTENDED TO CHANGE THE SCOPE OR EFFECT OF THE PRIOR LANGUAGE OR THAT THE CONSTRUCTION OR MODIFICATION OF ANY BUILDINGS WAS EVER CONTEMPLATED BY EITHER PHRASE. THE CURRENT PROVISION OF LAW IS CONTAINED IN SECTION 511 OF THE DEPARTMENT OF DEFENSE APPROPRIATION ACT, 1963, PUBLIC LAW 87-577, 76 STAT. 329, AND PROVIDES IN PERTINENT PART:

APPROPRIATIONS OF THE DEPARTMENT OF DEFENSE AVAILABLE FOR OPERATION AND MAINTENANCE, MAY BE REIMBURSED DURING THE CURRENT FISCAL YEAR FOR ALL EXPENSES INVOLVED IN THE PREPARATION FOR DISPOSAL AND FOR THE DISPOSAL OF MILITARY SUPPLIES, EQUIPMENT, AND MATERIEL, * * *.

THE ONLY QUESTION FOR DETERMINATION INSOFAR AS THE FISCAL YEAR 1963 IS CONCERNED IS WHETHER THE LANGUAGE "EXPENSES INVOLVED IN THE PREPARATION FOR DISPOSAL AND FOR THE DISPOSAL OF MILITARY SUPPLIES, EQUIPMENT, AND MATERIEL" INCLUDES THE COST OF MINOR CONSTRUCTION PROJECTS NOT IN EXCESS OF $25,000. IN OUR OPINION, IT CLEARLY CANNOT BE INTERPRETED AS INCLUDING ANY CONSTRUCTION PROJECT WHICH CONSTITUTES A "PUBLIC BUILDING" OR A "PUBLIC IMPROVEMENT" WITHIN THE MEANING OF THOSE TERMS AS USED IN SECTION 3733, REVISED STATUTES, 41 U.S.C. 12, WHICH PROVIDES:

NO CONTRACT SHALL BE ENTERED INTO FOR THE ERECTION, REPAIR, OR FURNISHING OF ANY PUBLIC BUILDING, OR FOR ANY PUBLIC IMPROVEMENT WHICH SHALL BIND THE GOVERNMENT TO PAY A LARGER SUM OF MONEY THAN THE AMOUNT IN THE TREASURY APPROPRIATED FOR THE SPECIFIC PURPOSE.

THE TERMS "PUBLIC BUILDING" AND "PUBLIC IMPROVEMENT" AS USED IN THE FOREGOING STATUTE LIKEWISE HAVE BEEN THE SUBJECT OF NUMEROUS DECISIONS OF THE ACCOUNTING OFFICERS OVER A LONG PERIOD OF TIME. THE DECISIONS UNIFORMLY HAVE BEEN TO THE EFFECT THAT ANY STRUCTURE IN THE FORM OF A BUILDING NOT CLEARLY OF A TEMPORARY CHARACTER IS SUCH A PUBLIC BUILDING OR PUBLIC IMPROVEMENT, THE EXPENDITURES FOR WHICH MUST BE AUTHORIZED BY SPECIFIC APPROPRIATIONS. 1 COMP. DEC. 33; 13 ID. 355; 16 ID. 85; 20 ID. 73; 21 ID. 420; 2 COMP. GEN. 14; 5 ID. 575; 6 ID. 619; 10 ID. 140; 27 ID. 634; 30 ID. 487; 38 ID. 392; ID. 758; 39 ID. 388. ALSO, SUCH STRUCTURES AS TEMPORARY SHEDS FOR THE SHELTER OF FARM ANIMALS; PORTABLE HOUSES FOR TEMPORARY USE OF EMPLOYEES; TEMPORARY PORTABLE BUILDINGS FOR USE IN THE DETENTION AND TREATMENT OF ALIENS; BARNS, SHEDS, COTTAGES, ETC; OF FRAME CONSTRUCTION OF A TEMPORARY NATURE WITH DIRT FLOORS AND CONTEMPLATED TO BE DESTROYED; HANGARS, SHOPS AND STOREHOUSES; AND QUONSET HUTS, HAVE BEEN CONSIDERED AS BEING SUCH PUBLIC BUILDINGS OR PUBLIC IMPROVEMENTS. MINOR STRUCTURES CLEARLY OF A TEMPORARY NATURE AND INTENDED TO BE USED FOR ONLY A TEMPORARY PERIOD HAVE BEEN HELD NOT TO BE PUBLIC BUILDINGS OR PUBLIC IMPROVEMENTS (26 COMP. DEC. 829), BUT THE STRUCTURES AND IMPROVEMENTS INVOLVED GENERALLY IN YOUR DISPOSAL PROGRAM ARE CLEARLY NOT OF THIS NATURE. THE MERE FACT THAT THE BUILDINGS ARE PREFABRICATED, MOVABLE, AND ACCOUNTED FOR AS PERSONAL PROPERTY, IN ITSELF, IS IMMATERIAL AS TO WHETHER THEY ARE PUBLIC BUILDINGS OR PUBLIC IMPROVEMENTS WITHIN THE CONTEMPLATION OF SECTION 3733, REVISED STATUTES. IT IS COMMON PRACTICE TODAY TO CONSTRUCT BOTH TEMPORARY AND PERMANENT STRUCTURES WITH PREFABRICATED MATERIAL WHICH MAY BE DISMOUNTED AND MOVED, BUT THE STRUCTURES ARE NEVERTHELESS PUBLIC BUILDINGS OR PUBLIC IMPROVEMENTS. WE, THEREFORE, CAN SEE NO BASIS WHATEVER FOR NOT CONSIDERING MOST, IF NOT ALL, OF THE CONSTRUCTION PROJECTS REFERRED TO IN OUR REPORT TO THE CONGRESS ON THIS MATTER, AS PUBLIC BUILDINGS OR PUBLIC IMPROVEMENTS FOR WHICH SPECIFIC APPROPRIATIONS ARE REQUIRED BY THE SAID SECTION 3733.

THE APPROPRIATION OF THE PROCEEDS OF SALE CONTAINED IN SECTION 511 OF THE DEPARTMENT OF DEFENSE APPROPRIATION ACT, 1963, PROVIDES MERELY FOR THE "EXPENSES INVOLVED IN THE PREPARATION FOR DISPOSAL AND FOR THE DISPOSAL OF MILITARY SUPPLIES, EQUIPMENT, AND MATERIEL" AND DOES NOT SPECIFICALLY PROVIDE FOR ANY PUBLIC BUILDING OR PUBLIC IMPROVEMENTS. IN MOST OF THE DECISIONS CITED ABOVE, IT WAS CONTENDED THAT THE BUILDINGS OR IMPROVEMENTS WERE "NECESSARY EXPENSES" WITHIN THE MEANING OF THAT TERM AS USED IN THE APPROPRIATION CONCERNED OR WERE ESSENTIAL TO THE CARRYING OUT OF THE PURPOSE OF AN APPROPRIATION, BUT SUCH CONTENTIONS HAVE LONG BEEN REJECTED. IN THE DECISION PUBLISHED IN 38 COMP. GEN. 392 IT WAS HELD THAT AN APPROPRIATION FOR "EXPENSES OF ACQUIRING, ADMINISTERING, OPERATING, MAINTAINING, AND DEVELOPING HELIUM PROPERTIES" WAS NOT AVAILABLE FOR CONSTRUCTION OF AN INDUSTRIAL TYPE BUILDING. WE, THEREFORE, HAVE NO ALTERNATIVE BUT TO CONCLUDE THAT THE APPROPRIATION IN SECTION 511 IS LIKEWISE NOT AVAILABLE FOR FINANCING THE COST OF PUBLIC BUILDINGS OR PUBLIC IMPROVEMENTS, AND ANY VOUCHERS CHARGING SUCH APPROPRIATION THEREFOR AND CREDITING THE MAINTENANCE AND OPERATION APPROPRIATIONS WILL HAVE TO BE DISALLOWED IN THE SETTLEMENT OF THE ACCOUNTS OF THE MILITARY DISBURSING OFFICERS CONCERNED UNLESS STATUTORY AUTHORITY THEREFOR IS OBTAINED.

WE REQUEST THAT YOU RECONSIDER THE CONCLUSION REACHED IN THE DEPUTY SECRETARY'S LETTER OF SEPTEMBER 24, 1962, IN THE LIGHT OF OUR DECISIONS AND THE CONCLUSION REACHED IN OUR REPORT AS EXPLAINED HEREIN.