B-158148, FEB. 9, 1966

B-158148: Feb 9, 1966

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TO THE SECRETARY OF THE ARMY: FURTHER REFERENCE IS MADE TO LETTER DATED DECEMBER 7. THE REQUEST FOR DECISION WAS ASSIGNED SUBMISSION NO. THE COST OF FINANCING SUCH PROJECT WILL BE BORNE BY THE WAR DEPARTMENT HISTORICAL FUND. A NONAPPROPRIATED FUND ACTIVITY AND NO APPROPRIATED FUNDS WILL BE INVOLVED. IT IS STATED FURTHER THAT THE PROPOSED MANUSCRIPT WOULD BE BASED ON AN ANALYSIS OF VOLUMES IN THE U.S. ARMY IN WORLD WAR II HISTORICAL SERIES AND THAT THE AUTHOR FOR SUCH AN UNDERTAKING MUST BE AN INDIVIDUAL WHO IS BOTH AN HISTORIAN AND A MILITARY OFFICER OF BROAD TRAINING AND EXPERIENCE. ACCOMPANYING THE ASSISTANT SECRETARY'S LETTER IS A COPY OF A PROJECT DIRECTIVE DESCRIBING IN GENERAL THE COMPOSITION OF THE MANUSCRIPT TOGETHER WITH A COPY OF A PROPOSED "NONPERSONAL SERVICES CONTRACT" TO BE EXECUTED BY THE SELECTED INDIVIDUAL AND THE WAR DEPARTMENT HISTORICAL FUND.

B-158148, FEB. 9, 1966

TO THE SECRETARY OF THE ARMY:

FURTHER REFERENCE IS MADE TO LETTER DATED DECEMBER 7, 1965, WITH ENCLOSURES, FROM THE ASSISTANT SECRETARY OF THE ARMY (FINANCIAL MANAGEMENT), REQUESTING A DECISION WHETHER, UNDER THE CIRCUMSTANCES DISCLOSED, A CONTRACT BETWEEN A RETIRED REGULAR ARMY OFFICER AND THE WAR DEPARTMENT HISTORICAL FUND, A NONAPPROPRIATED FUND ACTIVITY, TO PREPARE A MANUSCRIPT CONSTITUTES A SALE OF A SERVICE OR A SALE OF TANGIBLE PROPERTY WITHIN THE MEANING OF 5 U.S.C. 59C AND 37 U.S.C. 801 (C), AS AMENDED. THE REQUEST FOR DECISION WAS ASSIGNED SUBMISSION NO. SS-A-878 BY THE DEPARTMENT OF DEFENSE MILITARY PAY AND ALLOWANCE COMMITTEE.

THE ASSISTANT SECRETARY STATES THAT FOR SEVERAL YEARS THE CHIEF OF MILITARY HISTORY, DEPARTMENT OF THE ARMY,"HAS SOUGHT" A QUALIFIED INDIVIDUAL TO PREPARE A VOLUME TENTATIVELY ENTITLED "LESSONS LEARNED IN WORLD WAR II.' THE COST OF FINANCING SUCH PROJECT WILL BE BORNE BY THE WAR DEPARTMENT HISTORICAL FUND, A NONAPPROPRIATED FUND ACTIVITY AND NO APPROPRIATED FUNDS WILL BE INVOLVED. IT IS STATED FURTHER THAT THE PROPOSED MANUSCRIPT WOULD BE BASED ON AN ANALYSIS OF VOLUMES IN THE U.S. ARMY IN WORLD WAR II HISTORICAL SERIES AND THAT THE AUTHOR FOR SUCH AN UNDERTAKING MUST BE AN INDIVIDUAL WHO IS BOTH AN HISTORIAN AND A MILITARY OFFICER OF BROAD TRAINING AND EXPERIENCE. FOR THIS REASON, THE DEPARTMENT OF THE ARMY DESIRES TO ENGAGE A RETIRED SENIOR REGULAR ARMY OFFICER TO PREPARE THIS BOOK. THE ASSISTANT SECRETARY ALSO STATES THAT THE SELECTED INDIVIDUAL WOULD BE PROVIDED SOME OFFICE SPACE IN THE OFFICE, CHIEF OF MILITARY HISTORY, IN ORDER TO FACILITATE HIS RESEARCH, AND WOULD PERIODICALLY SUBMIT DRAFTS OF HIS WORK FOR REVIEW. THE INDIVIDUAL WOULD BE FREE, HOWEVER, TO HANDLE PREPARATION OF THE BOOK AS HE SEES FIT AS LONG AS HE MEETS THE FINAL DEADLINE FOR THE PROJECT AND HE WOULD NOT BE SUBJECT TO ANY DAY TO DAY SUPERVISION BY ANY FEDERAL OFFICIAL.

ACCOMPANYING THE ASSISTANT SECRETARY'S LETTER IS A COPY OF A PROJECT DIRECTIVE DESCRIBING IN GENERAL THE COMPOSITION OF THE MANUSCRIPT TOGETHER WITH A COPY OF A PROPOSED "NONPERSONAL SERVICES CONTRACT" TO BE EXECUTED BY THE SELECTED INDIVIDUAL AND THE WAR DEPARTMENT HISTORICAL FUND.

ON THE BASIS OF THE ASSISTANT SECRETARY'S REPRESENTATIONS, AND THE PROPOSED TERMS AND CONDITIONS OF THE CONTRACT, IT IS OUR VIEW THAT IT IS TO BE REGARDED AS A CONTRACT FOR THE PROCUREMENT OF A SPECIALIZED TYPE OF SERVICE RATHER THAN ONE FOR THE PROCUREMENT OF SUPPLIES OR WAR MATERIALS. ALSO, IT IS OUR VIEW THAT UNDER SUCH PROPOSED TERMS AND CONDITIONS, THE INDIVIDUAL CONCERNED WOULD HAVE THE STATUS OF A PRIVATE CONTRACTOR RATHER THAN THAT OF AN EMPLOYEE OF THE NONAPPROPRIATED FUND. SEE 42 COMP. GEN. 395; B-151720, JUNE 18, 1963, AND B-155365, OCTOBER 28, 1964.

SECTION 59C OF TITLE 5, U.S.C. AS AMENDED BY PUBLIC LAW 87-777, 76 STAT. 777, APPROVED OCTOBER 9, 1962, 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 THREE 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.'

THE QUESTION OF WHETHER A CONTRACT FOR ENGINEERING SERVICES, TO PRODUCE AND DELIVER CERTAIN PLANS AND SPECIFICATIONS, ENTERED INTO BETWEEN TWO REGULAR RETIRED NAVY OFFICERS AND THE DEPARTMENT OF THE NAVY, CONSTITUTED A SALE OF "NAVAL SUPPLIES OR WAR MATERIAL" WITHIN THE MEANING OF THE SUBSTANTIALLY SIMILAR PROVISIONS OF 34 U.S.C. 883 APPLICABLE TO THE NAVY AND IN EFFECT AT THAT TIME, WAS CONSIDERED IN DECISION OF NOVEMBER 7, 1940, B-12238. IN THAT DECISION, COPY ENCLOSED, IT WAS HELD THAT PERSONS OR FIRMS THAT FURNISHED PLANS, SPECIFICATIONS, DESIGNS, DRAWINGS, ETC., FOR THE NAVY ARE COMMONLY UNDERSTOOD AS BEING ENGAGED IN THE FURNISHING OF PROFESSIONAL SERVICES AND CLEARLY PROFESSIONAL SERVICES ARE NOT "NAVAL SUPPLIES OR WAR MATERIAL" WITHIN THE ACCEPTED MEANING OF THAT TERM. SALE, IN THE USUAL SENSE OF THE TERM, IS A TRANSFER OF PROPERTY FROM ONE PERSON TO ANOTHER FOR A FIXED SUM OF MONEY OR OTHER VALUABLE CONSIDERATION. IN CONSIDERING THE PROVISIONS OF 5 U.S.C. 59C AND 10 U.S.C. 6112 (B) (WHICH LATTER STATUTE ALSO WAS APPLICABLE TO THE NAVY AND WHICH HAS SINCE BEEN REPEALED BY PUBLIC LAW 87-777), WE SAID IN 41 COMP. GEN. 677, 679, THAT SINCE THE TERMS RELATING TO "SALE" AS USED IN THOSE STATUTES, HAVE SPECIFIC REFERENCE TO MATERIALS AND SUPPLIES, IT SEEMED CLEAR THAT SUCH TERMS WERE USED IN THEIR ORDINARY SENSE OF A SALE OF GOODS. HENCE, THE SALE OF SERVICES HAVE BEEN HELD TO BE OUTSIDE THE PURVIEW OF THE STATUTE. SEE, ALSO, 42 COMP. GEN. 87. MOREOVER, THE HISTORICAL FUND IN THIS CASE IS SEEKING THE SERVICES OF THE RETIRED OFFICER AND WE EXPRESSED THE VIEW IN 41 COMP. GEN. 799, THAT A RETIRED OFFICER WHO DOES NO MORE THAN RESPOND TO REQUESTS FROM THE NAVY OFFICIALS FOR ASSISTANCE IS NOT TO BE VIEWED AS ENGAGING IN SALES ACTIVITIES FOR THE PURPOSE OF THE REPEALED NAVY STATUTE. AS IN THAT CASE, THE FUND'S KNOWLEDGE OF THE OFFICER'S BACKGROUND AND QUALIFICATIONS APPEARS TO BE THE PRIME FACTOR IN INFLUENCING ITS DECISION TO SEEK HIS SERVICES AND HERE, AS THERE, THE STATUTE IS DIRECTED TO AN ENGAGEMENT IN SALES ACTIVITIES BY THE RETIRED OFFICER AND NOT TO REQUESTS FOR ASSISTANCE OR PURCHASES BY THE ARMY.

ACCORDINGLY, IN LINE WITH THE ABOVE-CITED DECISIONS, IT IS OUR VIEW THAT IN THE CIRCUMSTANCES OF THIS CASE, THE EXECUTION OF THE PROPOSED CONTRACT BY A RETIRED REGULAR ARMY OFFICER TO PREPARE MANUSCRIPT OF THE TYPE HERE INVOLVED WOULD NOT SUBJECT HIM TO THE PROHIBITION OF 5 U.S.C. 59C SO AS TO PRECLUDE HIM FROM RECEIVING HIS RETIRED PAY.

IT APPEARS APPROPRIATE, HOWEVER, TO INVITE YOUR ATTENTION TO THE PROVISIONS OF 18 U.S.C. 291, WHICH POSSIBLY MAY BE APPLIED AS IMPOSING CRIMINAL SANCTIONS FOR THE SALE BY A RETIRED REGULAR OFFICER OF ANYTHING TO THE DEPARTMENT FROM WHICH HE HOLDS A RETIRED STATUS. ANY QUESTION AS TO THE APPLICABILITY OF THAT STATUTE IN THIS CASE SHOULD BE ADDRESSED TO THE ATTORNEY GENERAL.