B-149266, JUN. 29, 1962

B-149266, JUN. 29, 1962

TO CHAIRMAN, UNITED STATES ATOMIC ENERGY COMMISSION:

BY LETTER OF JUNE 22, 1962, FROM THE GENERAL MANAGER, OUR VIEWS HAVE BEEN SOLICITED WHETHER APPROPRIATED FUNDS WOULD PROPERLY BE AVAILABLE FOR PAYMENTS UNDER A PROPOSED CONTRACT WITH THE WESTINGHOUSE ELECTRIC COMPANY IN THE FOLLOWING CIRCUMSTANCES.

IN THE LATTER PART OF 1960 THE SOUTHERN CALIFORNIA EDISON COMPANY AND THE WESTINGHOUSE ELECTRIC COMPANY MADE A PROPOSAL TO AEC FOR THE DESIGN, CONSTRUCTION AND OPERATION OF A 375-MEGAWATT (ELECTRIC) PRESSURIZED WATER NUCLEAR REACTOR POWER PLANT AND REQUESTED FINANCIAL ASSISTANCE UNDER THE COMMISSION'S POWER DEMONSTRATION REACTOR PROGRAM. AFTER FULL CONSIDERATION, THE COMMISSION FOUND THE PRINCIPLES UPON WHICH THE PROPOSAL WAS BASED TO BE ACCEPTABLE. AGREEMENT WAS REACHED BY THE PARTIES ON THE SIGNIFICANT FEATURES TO BE INCLUDED IN THE FORMAL CONTRACTS, SUBJECT TO THE AVAILABILITY OF AN APPROPRIATE SITE FOR THE CONSTRUCTION AND TO THE PROCEDURES REQUIRED UNDER SECTION 111 (B) OF PUBLIC LAW 85-162. APPEARS NOW THAT THE CONTEMPLATED SITE MAY NOT BE AVAILABLE AND THE COMMISSION HAS DECIDED TO SEEK CANCELLATION OF THE PRELIMINARY ARRANGEMENTS UNLESS THE SITE PROBLEM IS SATISFACTORILY SETTLED BY SEPTEMBER 15, 1962.

THE ESTIMATED COMPLETION DATE FOR THE PLANT WAS ORIGINALLY SET AT JANUARY 1, 1965. WESTINGHOUSE, IN ORDER TO MAKE IT POSSIBLE TO MEET THAT DATE, EMBARKED ON A RESEARCH AND DEVELOPMENT PROGRAM ON DECEMBER 1, 1960, TO PROVIDE ANSWERS WITH RESPECT TO DESIGN AND CONSTRUCTION PROBLEMS RELATING TO THE PROJECT. THE COMMISSION HAS CONCLUDED THAT CERTAIN OF THE RESULTS OF THIS RESEARCH AND DEVELOPMENT WOULD BE OF VALUE TO ITS BASIC PROGRAM AND PROPOSES, SUBJECT TO OUR DETERMINATION THAT APPROPRIATED FUNDS ARE AVAILABLE THEREFOR, TO ENTER INTO A CONTRACT WITH WESTINGHOUSE TO ACQUIRE SUCH RESULTS IN RETURN FOR REIMBURSEMENT TO WESTINGHOUSE OF ITS PERTINENT ALLOWABLE COSTS UP TO A CEILING OF APPROXIMATELY $3,000,000. UNDER THE CONTRACT THE COMMISSION WOULD OWN THE RESULTING TECHNICAL DATA, INCLUDING ANY INVENTIONS. THIS INFORMATION WOULD BE DISSEMINATED AS PART OF THE COMMISSION'S NORMAL ACTIVITIES IN ITS REACTOR DEVELOPMENT PROGRAM. IT IS REPORTED TO BE THE COMMISSION'S JUDGMENT THAT THE WIDESPREAD DISSEMINATION OF SUCH INFORMATION COULD MAKE A SIGNIFICANT CONTRIBUTION TO PROGRAM OBJECTIVES. THE COMMISSION PROPOSES TO USE FUNDS AVAILABLE FROM ITS BASIC REACTOR DEVELOPMENT PROGRAM.

IF A SATISFACTORY SITE FOR CONSTRUCTION OF THE PLANT IS AGREED UPON BY THE SEPTEMBER 15, 1962, DEADLINE AND THE LEGISLATIVE REQUIREMENTS ARE MET, THE ENSUING FORMAL AGREEMENT WOULD BE SO WRITTEN AS TO INSURE THAT THERE WOULD BE NO REIMBURSEMENT THEREUNDER FOR THE DATA TO BE ACQUIRED UNDER THE PROPOSED CONTRACT WITH WESTINGHOUSE.

THE WORK PERFORMED BY WESTINGHOUSE WOULD UNDOUBTEDLY COME WITHIN THE DEFINITION OF RESEARCH AND DEVELOPMENT STATED AT SECTION 11V. OF THE ATOMIC ENERGY ACT OF 1954, 42 U.S.C. 2014 (V). UNDER SECTION 31A. OF THE ACT THE COMMISSION IS AUTHORIZED TO ENTER INTO CONTRACTS "FOR THE CONDUCT OF RESEARCH AND DEVELOPMENT ACTIVITIES" RELATING TO THE UTILIZATION OF ATOMIC ENERGY FOR THE GENERATION OF USABLE ENERGY. IN OUR JUDGMENT THE AUTHORITY CONTAINED IN THE SECTION IS LIMITED TO CONTRACTS FOR RESEARCH AND DEVELOPMENT TO BE PERFORMED SUBSTANTIALLY AFTER THE CONTRACT IS ENTERED INTO. THIS VIEW IS SUPPORTED BY THE INCLUSION IN THE PROVISION OF THE PHRASE "FOR THE CONDUCT" OF RESEARCH AND DEVELOPMENT, WHICH WOULD IMPLY THE PERFORMANCE OF THE WORK DURING THE CONTRACT PERIOD AND SUBSEQUENT TO THE EXECUTION OF THE CONTRACT. THEREFORE, WE DOUBT THAT THE PROPOSED CONTRACT WITH WESTINGHOUSE COULD BE AUTHORIZED UNDER SECTION 31A.

HOWEVER, THE COMMISSION HAS GENERAL AUTHORITY TO ACQUIRE PERSONAL PROPERTY UNDER SECTION 161G. OF THE ACT. THERE SEEMS LITTLE ROOM FOR DOUBT THAT THE DATA TO BE ACQUIRED WOULD COME WITHIN THE DEFINITION OF PERSONAL PROPERTY. FURTHER, THE INTENDED PURPOSE OF THE PURCHASE--- DISSEMINATION OF THE INFORMATION--- APPEARS TO COME WITHIN THE PURPOSE OF SECTION 3B. OF THE ACT. THEREFORE, THE EXPENDITURE COULD BE JUSTIFIED AS INCIDENT TO AN EXPRESS AUTHORITY FOR WHICH APPROPRIATIONS ARE AUTHORIZED UNDER SECTION 261A. SEE ALSO 29 COMP. GEN. 419. SINCE THE PROCUREMENT WOULD BE NEGOTIATED WITH A SINGLE SOURCE, THE PROCEDURES TO BE FOLLOWED WOULD HAVE TO BE JUSTIFIED UNDER SECTION 302 (C) OF THE FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT OF 1949, AS AMENDED, 40 U.S.C. 252 (C), OR A WAIVER OBTAINED UNDER SECTION 162 OF THE ATOMIC ENERGY ACT. SUBJECT TO THE CONDITIONS STATED IN THE FOREGOING SENTENCE WE WOULD NOT OBJECT TO THE PAYMENT OF APPROPRIATED FUNDS AVAILABLE THEREFOR UNDER THE PROPOSED CONTRACT.