B-17476, JUNE 10, 1941, 20 COMP. GEN. 868

B-17476, JUNE 10, 1941, 20 COMP. GEN. 868

APPROPRIATIONS - OBLIGATION - PRIOR TO FISCAL YEAR FOR WHICH AVAILABLE SECTIONS 3679 AND 3732, REVISED STATUTES, WHICH, IN EFFECT, PROHIBIT ANY CONTRACTS OR OBLIGATIONS BEYOND THE EXTENT AND AVAILABILITY OF EXISTING APPROPRIATIONS IN THE ABSENCE OF THE SPECIFIC AUTHORITY, DO NOT PROHIBIT ENTERING INTO CONTRACTS TO SUPPLY NEEDS FOR TWO FISCAL YEARS, I.E., THE CURRENT AND NEXT FISCAL YEARS, IF THE CHARGEABLE APPROPRIATION FOR THE LATTER YEAR IS CONTAINED IN AN APPROPRIATION ACT WHICH HAS BECOME LAW ON THE DATE OF THE CONTRACT. THE POST OFFICE DEPARTMENT MAY EXECUTE A CONTRACT DURING THE FISCAL YEAR 1941 FOR MOTOR VEHICLES CHARGEABLE TO AN APPROPRIATION FOR THE FISCAL YEAR 1942 WHICH HAS BECOME LAW WHEN THE CONTRACT IS EXECUTED, BUT THE CONTRACT SHOULD CONTAIN A PROVISION THAT PAYMENT WILL NOT BE MADE FOR THE VEHICLES UNTIL ON OR AFTER JULY 1, 1941, WHETHER DELIVERY BE DURING THE 1941 FISCAL YEAR OR AFTER THE BEGINNING OF THE 1942 FISCAL YEAR.

COMPTROLLER GENERAL WARREN TO THE POSTMASTER GENERAL, JUNE 10, 1941:

I HAVE YOUR LETTER OF JUNE 4, 1941, AS FOLLOWS:

THERE IS ENCLOSED COPY OF PROPOSAL NO. 2744, TOGETHER WITH SPECIFICATIONS, ISSUED BY THE PURCHASING AGENT UNDER DATE OF MAY 12, 1941, IN RESPONSE TO A REQUISITION RECEIVED FROM THE DIVISION OF MOTOR VEHICLE SERVICE FOR "NOT LESS THAN 40, NOR MORE THAN 55" COMPLETE MOTOR TRUCKS. AT THE TIME THE PROPOSAL WAS ISSUED IT WAS KNOWN THAT THE AVAILABILITY OF THE APPROPRIATION TO BE CHARGED WAS SUFFICIENT TO COVER 40 UNITS, BUT THERE WAS CONSIDERABLE DOUBT AS TO THE AVAILABILITY OF FUNDS FOR THE REMAINING 15 UNITS, ALTHOUGH THE ENTIRE QUANTITY OF 55 UNITS WAS IMMEDIATELY NEEDED.

SINCE THE OPENING OF BIDS ON MAY 28, 1941, THE CONDITION OF THE APPROPRIATION HAS NOT CHANGED AND THE SUPERINTENDENT OF THE MOTOR VEHICLE SERVICE ADVISES AS FOLLOWS:

"OWING TO THE GREATLY INCREASED DEMANDS MADE UPON THE POSTAL SERVICE FOR INCREASED TRANSPORTATION SERVICE IN CITIES DUE TO THE DEFENSE PROGRAM, AND GREATLY INCREASED BUSINESS ACTIVITIES IN GENERAL, THE EXPENDITURES FROM THE APPROPRIATION , VEHICLE SERVICE, FOR THE FISCAL YEAR ENDING JUNE 30, 1941, HAVE BEEN GREATLY INCREASED, THEREBY REDUCING THE NUMBER OF VEHICLES WHICH MAY BE PURCHASED FROM THE FUNDS AVAILABLE IN THE APPROPRIATION.

"UNDER THE DEPARTMENT'S INVITATION NO. 2744, THE UNIT PRICE PER TRUCK AS SUBMITTED BY THE LOWEST BIDDER MEETING THE REQUIREMENTS OF THE SPECIFICATION IS APPROXIMATELY $1,000 MORE PER UNIT THAN PAID FOR A COMPARABLE UNIT IN MARCH 1939. IT IS MY UNDERSTANDING THAT THERE WILL BE FURTHER INCREASES IN THE UNIT COST AND I FEEL THAT WE SHOULD PURCHASE AS MANY UNITS AS POSSIBLE AT THIS TIME.

"BECAUSE OF THE CONDITION OF THE APPROPRIATION, IT IS RECOMMENDED THAT 40 COMPLETE UNITS BE PURCHASED FROM THE APPROPRIATION" VEHICLE SERVICE, 1941" AND THE REMAINING 15 UNITS FROM THE APPROPRIATION " VEHICLE SERVICE, 1942.' THESE NEW TRUCKS ARE URGENTLY NEEDED AND IT WILL BE APPRECIATED IF EVERY EFFORT IS MADE TO PURCHASE THE FULL NUMBER UNDER THE CONDITIONS SET FORTH HEREIN.'

WITH YOUR APPROVAL, IT IS PROPOSED TO MAKE AN AWARD IN ACCORDANCE WITH THE PROPOSAL AND EXECUTE A FORMAL CONTRACT FOR "NOT LESS THAN 40, NOR MORE THAN 55" UNITS, THE CONTRACTOR TO BE NOTIFIED THAT 40 UNITS WILL BE ORDERED IMMEDIATELY AND CHARGED TO THE APPROPRIATION " VEHICLE SERVICE, 1941" AND THAT THE REMAINING 15 UNITS WILL BE ORDERED AFTER JULY 1, 1941, TO BE CHARGED TO THE APPROPRIATION " VEHICLE SERVICE, 1942.'

THE PROCEDURE OUTLINED IS ENTIRELY NEW TO THIS DEPARTMENT, BEING BROUGHT ABOUT BY PRESENT CONDITIONS CAUSED BY NATIONAL DEFENSE. HOWEVER, IN VIEW OF THE EVER GROWING DEMAND FOR MOTOR TRUCKS AND THE CONSTANTLY ADVANCING PRICES, IT IS BELIEVED THAT IT WILL BE TO THE BEST INTERESTS OF THE GOVERNMENT TO AWARD A CONTRACT ON THE BASIS OF THE PRESENT LOWEST ACCEPTABLE BID FOR A TOTAL OF 55 UNITS.

IN THE EVENT THE METHOD OUTLINED DOES NOT MEET WITH YOUR APPROVAL YOUR SUGGESTIONS ARE REQUESTED AND WILL BE APPRECIATED. ALSO, IN VIEW OF THE FACT THAT THE CURRENT FISCAL YEAR IS RAPIDLY DRAWING TO A CLOSE, I WILL THANK YOU TO GIVE THIS MATTER YOUR IMMEDIATE ATTENTION AND FAVOR ME WITH AN EARLY REPLY.

SECTION 3679, REVISED STATUTES, AS AMENDED BY THE ACT OF FEBRUARY 27, 1906, 34 STAT. 49, PROVIDES:

NO EXECUTIVE DEPARTMENT OR OTHER GOVERNMENT ESTABLISHMENT OF THE UNITED STATES SHALL EXPEND, IN ANY ONE FISCAL YEAR, ANY SUM IN EXCESS OF APPROPRIATIONS MADE BY CONGRESS FOR THAT FISCAL YEAR, OR INVOLVE THE GOVERNMENT IN ANY CONTRACT OR OTHER OBLIGATION FOR THE FUTURE PAYMENT OF MONEY IN EXCESS OF SUCH APPROPRIATIONS UNLESS SUCH CONTRACT OR OBLIGATIONS IS AUTHORIZED BY LAW. * * *

SECTION 3732, REVISED STATUTES, ALSO PROVIDES:

NO CONTRACT OR PURCHASE ON BEHALF OF THE UNITED STATES SHALL BE MADE, UNLESS THE SAME IS AUTHORIZED BY LAW OR IS UNDER AN APPROPRIATION ADEQUATE TO ITS FULFILLMENT, EXCEPT IN THE WAR AND NAVY DEPARTMENTS, FOR CLOTHING, SUBSISTENCE, FORAGE, FUEL, QUARTERS, OR TRANSPORTATION, WHICH, HOWEVER, SHALL NOT EXCEED THE NECESSITIES OF THE CURRENT YEAR.

THE FOREGOING PROVISIONS OF LAW, HOWEVER, DO NOT PROHIBIT THE ENTERING INTO CONTRACTS TO SUPPLY THE NEEDS FOR 2 FISCAL YEARS, THAT IS TO SAY, THE CURRENT FISCAL YEAR AND THE NEXT FISCAL YEAR, IF THE CHARGEABLE APPROPRIATION FOR THE LATTER YEAR IS CONTAINED IN AN APPROPRIATION ACT WHICH HAS BECOME LAW ON THE DATE THE CONTRACT IS ENTERED INTO. THUS, IT WAS HELD IN DECISION OF THIS OFFICE, 16 COMP. GEN. 1007, QUOTING FROM THE SYLLABUS:

LOAN CONTRACTS BETWEEN PROSPECTIVE BORROWERS AND THE RURAL ELECTRIFICATION ADMINISTRATION OBLIGATING FISCAL YEAR FUNDS MAY NOT BE ENTERED INTO PRIOR TO APPROPRIATION MADE BUT THERE IS NO OBJECTION AFTER APPROPRIATION MADE TO THE EXECUTION OF SUCH CONTRACTS PRIOR TO THE BEGINNING OF THE FISCAL YEAR, NOTWITHSTANDING THE FUNDS ARE NOT AVAILABLE FOR EXPENDITURE UNTIL THE BEGINNING OF THE FISCAL YEAR.

THE APPROPRIATION " VEHICLE SERVICE, 1942" PROPOSED TO BE CHARGED WITH THE COST OF 15 UNITS UNDER THE CONTEMPLATED CONTRACT IS CONTAINED IN TITLE II OF THE TREASURY AND POST OFFICE DEPARTMENTS APPROPRIATION ACT, 1942, APPROVED MAY 31, 1941, PUBLIC LAW 88, 55 STAT. 233. HENCE, THERE WOULD APPEAR TO BE NO LEGAL OBJECTION TO THE EXECUTION OF THE PROPOSED CONTRACT ON THE BASIS YOU SUGGEST, IT BEING ASSUMED THAT SAID CONTRACT WILL CONTAIN SUCH PROVISIONS AS WILL FULLY APPRISE THE CONTRACTOR THAT FOR SUCH UNITS AS ARE TO BE PAID FOR UNDER THE 1942 APPROPRIATION, WHETHER DELIVERED DURING THE PRESENT FISCAL YEAR OR AFTER THE BEGINNING OF THE NEXT FISCAL YEAR, PAYMENT MAY NOT BE MADE UNTIL ON OR AFTER JULY 1, 1941.