B-158896, MAY 6, 1966

B-158896: May 6, 1966

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310.38 IS NOT SUPPORTED BY A STANDARD FORM 1143 (ADVERTISING ORDER) ACCOMPANIED BY A COPY OF THE INSTRUMENT DELEGATING AUTHORITY TO ADVERTISE AS REQUIRED BY THE ARMED SERVICES PROCUREMENT REGULATION (ASPR) 1-1002.6. THE WALKER AGENCY HAS NOT FURNISHED THESE DOCUMENTS BECAUSE THE PROCUREMENT WAS NOT CONSUMMATED IN THE ROUTINE MANNER. ARRANGEMENTS FOR THE SERVICES WERE MADE ORALLY WITH THE WALKER AGENCY BY OTHER THAN A CONTRACTING OFFICIAL AND IT WAS NOT UNTIL THE FIRM SUBMITTED ITS INVOICE AFTER PLACING THE REQUESTED ADVERTISEMENTS THAT IT WAS DISCOVERED THAT ASPR HAD NOT BEEN COMPLIED WITH AND THAT A PURCHASE ORDER HAD NOT BEEN ISSUED. THIS CASE WAS REFERRED TO THE ARMY CONTRACT ADJUSTMENT BOARD FOR CONSIDERATION.

B-158896, MAY 6, 1966

TO CAPTAIN C. D. PREETORIUS, FINANCE AND ACCOUNTING OFFICER, ROCK ISLAND ARSENAL, DEPARTMENT OF THE ARMY:

BY LETTER OF APRIL 5, 1966, THE OFFICE OF THE CHIEF OF FINANCE FORWARDED YOUR REQUEST OF JANUARY 25, 1966, REFERENCE SWERI-CPF, FOR A DECISION AS TO WHETHER THE WALKER AGENCY MAY BE PAID FOR CERTAIN ADVERTISING SERVICES PERFORMED IN MARCH 1964, SINCE ITS INVOICE FOR $3,310.38 IS NOT SUPPORTED BY A STANDARD FORM 1143 (ADVERTISING ORDER) ACCOMPANIED BY A COPY OF THE INSTRUMENT DELEGATING AUTHORITY TO ADVERTISE AS REQUIRED BY THE ARMED SERVICES PROCUREMENT REGULATION (ASPR) 1-1002.6.

THE WALKER AGENCY HAS NOT FURNISHED THESE DOCUMENTS BECAUSE THE PROCUREMENT WAS NOT CONSUMMATED IN THE ROUTINE MANNER. ARRANGEMENTS FOR THE SERVICES WERE MADE ORALLY WITH THE WALKER AGENCY BY OTHER THAN A CONTRACTING OFFICIAL AND IT WAS NOT UNTIL THE FIRM SUBMITTED ITS INVOICE AFTER PLACING THE REQUESTED ADVERTISEMENTS THAT IT WAS DISCOVERED THAT ASPR HAD NOT BEEN COMPLIED WITH AND THAT A PURCHASE ORDER HAD NOT BEEN ISSUED.

ASPR 1-1002.6 IMPLEMENTS 44 U.S.C. 324, 5 U.S.C. 22A AND 7 GAO 5200. SECTION 324 OF TITLE 44 OF THE U.S.C. PROVIDES:

"NO ADVERTISEMENT, NOTICE, OR PROPOSAL FOR ANY EXECUTIVE DEPARTMENT OF THE GOVERNMENT, OR FOR ANY BUREAU THEREOF, OR FOR ANY OFFICE THEREWITH CONNECTED, SHALL BE PUBLISHED IN ANY NEWSPAPER WHATEVER, EXCEPT IN PURSUANCE OF A WRITTEN AUTHORITY FOR SUCH PUBLICATION FROM THE HEAD OF SUCH DEPARTMENT; AND NO BILL FOR ANY SUCH ADVERTISING, OR PUBLICATION, SHALL BE PAID UNLESS THERE BE PRESENTED, WITH SUCH BILL, A COPY OF SUCH WRITTEN AUTHORITY.'

SECTION 22A OF TITLE 5 OF THE U.S.C. AUTHORIZES THE HEAD OF ANY DEPARTMENT TO DELEGATE TO SUBORDINATE OFFICIALS AND AUTHORITY CONTAINED IN 44 U.S.C. 324. SECTION 5200 OF TITLE 7 OF THE GAO MANUAL SETS FORTH INSTRUCTIONS REGARDING THE USE AND PREPARATION OF ADVERTISING ORDERS AND VOUCHERS FOR PAYMENT FOR ADVERTISING.

THIS CASE WAS REFERRED TO THE ARMY CONTRACT ADJUSTMENT BOARD FOR CONSIDERATION. THE AUTHORITY OF THE BOARD IS DERIVED FROM THE ACT OF AUGUST 28, 1958, 72 STAT. 972, PUBLIC LAW 85-804, WHICH STATES:

"* * * THE PRESIDENT MAY AUTHORIZE ANY DEPARTMENT OR AGENCY OF THE GOVERNMENT WHICH EXERCISES FUNCTIONS IN CONNECTION WITH THE NATIONAL DEFENSE, ACTING IN ACCORDANCE WITH REGULATIONS PRESCRIBED BY THE PRESIDENT FOR THE PROTECTION OF THE GOVERNMENT, TO ENTER INTO CONTRACTS OR INTO AMENDMENTS OR MODIFICATIONS OF CONTRACTS HERETOFORE OR HEREAFTER MADE AND TO MAKE ADVANCE PAYMENTS THEREON, WITHOUT REGARD TO OTHER PROVISIONS OF LAW RELATING TO THE MAKING, PERFORMANCE, AMENDMENT, OR MODIFICATION OF CONTRACTS, WHENEVER HE DEEMS THAT SUCH ACTION WOULD FACILITATE THE NATIONAL DEFENSE. * * *"

IN CONSIDERING THE CASE, THE BOARD STATED:

"* * * THERE IS NO EVIDENCE THAT THE PARTICIPANTS INTENDED TO SHORT CUT ANY OF THE REQUIRED PROCEDURES. TWO OF THE INSTALLATIONS HAD RECEIVED THE NECESSARY PERMISSION TO ADVERTISE. THE FACT THAT NO PURCHASE ORDER REQUEST HAD BEEN ISSUED APPEARS TO BE THE RESULT OF MISUNDERSTANDINGS AND HONEST MISTAKES. THE GOVERNMENT HAS RECEIVED THE SERVICES IT SOUGHT AND HAS BENEFITED THEREFROM. THE APPLICANT WAS REQUIRED TO PAY THE NEWSPAPERS IN ADVANCE AND HAS SUBMITTED EVIDENCE WHICH SHOWS THAT HE EXPENDED APPROXIMATELY $2,900.00 OF HIS FUNDS. THE AMOUNT OF THE APPLICANT'S REQUEST HAS BEEN FOUND TO BE REASONABLE AND IN ACCORDANCE WITH THE AGREEMENT THAT EXISTED BETWEEN THE APPLICANT AND THE PURPORTED GOVERNMENT CONTRACTING OFFICER.'

THE BOARD THEREFORE CONCLUDED THAT THE INFORMAL COMMITMENT FOR $3,310.38 SHOULD BE FORMALIZED. THIS WAS ACCOMPLISHED BY THE EXECUTION OF A FORMAL CONTRACT BETWEEN THE GOVERNMENT AND THE WALKER AGENCY IN JANUARY 1966.

WE HAVE HELD THAT STATUTES WHICH PROHIBIT THE EXPENDITURE OF FUNDS MAY NOT BE DISREGARDED UNDER THE PROVISIONS OF THE FIRST WAR POWERS ACT, 55 STAT. 839, WHICH WAS THE PREDECESSOR OF PUBLIC LAW 85-804 AND WHICH CONTAINED IDENTICAL LANGUAGE ABOUT DISREGARDING "OTHER PROVISIONS OF LAW RELATING TO THE MAKING * * * OF CONTRACTS.' 21 COMP. GEN. 835. IT IS OUR VIEW, HOWEVER, THAT THE PRIMARY PURPOSE OF THE ABOVE-QUOTED PROVISIONS OF 44 U.S.C. 324 IS TO PRESCRIBE THE CONTRACTING PROCEDURE TO BE FOLLOWED BEFORE A CONTRACT FOR ADVERTISING IN NEWSPAPERS MAY BE AWARDED; THAT IS, TO REQUIRE THAT PRIOR WRITTEN AUTHORITY BE OBTAINED FROM THE HEAD OF THE DEPARTMENT. WE THEREFORE BELIEVE THAT THE FORMALIZATION OF THE INFORMAL COMMITMENT UNDER THE AUTHORITY OF PUBLIC LAW 85-804 WAS AUTHORIZED.

ACCORDINGLY, THE VOUCHER WHICH IS RETURNED HEREWITH MAY BE PAID IN THE AMOUNT OF $3,310.38 IF OTHERWISE CORRECT.