B-219247, JUL 12, 1985

B-219247: Jul 12, 1985

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AS LONG AS TRANSFERS ARE EVENTUALLY MADE DURING FISCAL YEAR DOE CAN DETERMINE EXACT TIMING OF ANY TRANSFER WITHIN THE YEAR. LIMITATION ON DISPOSALS OF NATIONAL STOCKPILE MATERIALS WHEN UNOBLIGATED BALANCE IN NATIONAL DEFENSE STOCKPILE TRANSACTION FUND EXCEEDS $250 MILLION IS NOT ACCEPTABLE WHEN GENERAL SERVICES ADMINISTRATION BARTERS STOCKPILE MATERIAL SINCE BARTERS IN KIND. (2) THE VALIDITY OF THE GENERAL SERVICES ADMINISTRATION (GSA) ASSERTION THAT THE BARTERING OF STOCKPILE MATERIALS FOR FERROALLOYS PROVIDES NO RECEIPTS AND THEREFORE IS NOT AFFECTED BY THE FUND'S $250 MILLION LIMITATION ON DISPOSALS. WHEN NPR RECEIPTS AND EXPENSES ARE FULLY KNOWN. WHATEVER IMPACT THE NPR MONEY PRESENTLY HELD IN DOE'S SUSPENSE ACCOUNT WOULD HAVE ON THE FUND'S UNOBLIGATED BALANCE.

B-219247, JUL 12, 1985

STRATEGIC AND CRITICAL MATERIALS - BARTER EXCHANGE - EXCESS STOCKPILE MATERIALS - NATIONAL DEFENSE STOCKPILE FUND - EFFECT ON UNOBLIGATED BALANCE DIGEST: 1. DEPARTMENT OF ENERGY (DOE), AT REQUEST OF GENERAL SERVICES ADMINISTRATION (GSA), HAS AUTHORITY TO TEMPORARILY STOP MONTHLY TRANSFERS OF 30 PERCENT OF NET RECEIPTS FROM NAVAL PETROLEUM RESERVES TO GSA'S NATIONAL DEFENSE STOCKPILE TRANSACTION FUND SINCE TRANSFER AUTHORITY, SECTION 905, DEPARTMENT OF DEFENSE AUTHORIZATION ACT, 1985, PUB.L. NO. 98-525, 98 STAT. 2573, DOES NOT SPECIFY WHEN DURING FISCAL YEAR RECEIPTS MUST BE TRANSFERRED. AS LONG AS TRANSFERS ARE EVENTUALLY MADE DURING FISCAL YEAR DOE CAN DETERMINE EXACT TIMING OF ANY TRANSFER WITHIN THE YEAR. STRATEGIC AND CRITICAL MATERIALS - BARTER EXCHANGE - EXCESS STOCKPILE MATERIALS - NATIONAL DEFENSE STOCKPILE FUND - EFFECT ON UNOBLIGATED BALANCE 2. LIMITATION ON DISPOSALS OF NATIONAL STOCKPILE MATERIALS WHEN UNOBLIGATED BALANCE IN NATIONAL DEFENSE STOCKPILE TRANSACTION FUND EXCEEDS $250 MILLION IS NOT ACCEPTABLE WHEN GENERAL SERVICES ADMINISTRATION BARTERS STOCKPILE MATERIAL SINCE BARTERS IN KIND, NOT INVOLVING ANY CASH RECEIPTS FOR DEPOSIT IN FUND, DO NOT AFFECT FUND'S UNOBLIGATED BALANCE. CHAIRMAN BENNETT'S LETTER CONCERNING THE NATIONAL DEFENSE STOCKPILE TRANSACTION FUND (FILE B-219247; CODE 391547):

DIRECTOR, NSIAD - FRANK C. CONAHAN:

YOU ASKED THAT WE RESPOND TO CHAIRMAN BENNETT'S QUESTIONS CONCERNING THE OPERATION OF THE NATIONAL DEFENSE STOCKPILE TRANSACTION FUND (FUND). SPECIFICALLY, WE VIEW THE CHAIRMAN'S LETTER AS QUESTIONING (1) WHETHER THE DEPARTMENT OF ENERGY HAS TO MAKE MONTHLY TRANSFERS OF 30 PERCENT OF THE NET NAVAL PETROLEUM RESERVE (NPR) RECEIPTS TO THE FUND PURSUANT TO SEC. 905, PUBLIC LAW NO. 98-525, AND (2) THE VALIDITY OF THE GENERAL SERVICES ADMINISTRATION (GSA) ASSERTION THAT THE BARTERING OF STOCKPILE MATERIALS FOR FERROALLOYS PROVIDES NO RECEIPTS AND THEREFORE IS NOT AFFECTED BY THE FUND'S $250 MILLION LIMITATION ON DISPOSALS.

WE CONCLUDE THAT THE LACK OF SPECIFICITY IN SEC. 905 DETAILING WHEN TRANSFERS MUST BE MADE TO THE FUND ALLOWS DOE SUBSTANTIAL FLEXIBILITY TO DETERMINE WHEN THE TRANSFERS SHALL OCCUR. CONSEQUENTLY, DOE CAN MAKE A SINGLE TRANSFER TO THE FUND OF THE NET FISCAL YEAR (FY) 85 RECEIPTS ON OR SHORTLY AFTER SEPTEMBER 30, 1985, WHEN NPR RECEIPTS AND EXPENSES ARE FULLY KNOWN, RATHER THAN AT EARLIER, MORE FREQUENT INTERVALS. A TRANSFER AT SUCH TIME EFFECTIVELY DELAYS, BUT DOES NOT ELIMINATE, WHATEVER IMPACT THE NPR MONEY PRESENTLY HELD IN DOE'S SUSPENSE ACCOUNT WOULD HAVE ON THE FUND'S UNOBLIGATED BALANCE. AS A FINAL OBSERVATION, WE NOTE THAT THE FUND, WITH THE NPR RECEIPT TRANSFERS ALREADY MADE THIS FISCAL YEAR, IS PRESENTLY FULLY CAPABLE OF SUPPORTING THE ACQUISITIONS REFLECTED IN THE ANNUAL MATERIALS PLANS FOR 1984 AND 1985 WITHOUT ADDITIONAL TRANSFERS OF NPR RECEIPTS BEING NEEDED. ACCORDINGLY, THE DELAY IN MAKING TRANSFERS DOES NOT PRESENTLY PREVENT ACQUISITIONS.

CONCERNING THE CHAIRMAN'S SECOND ISSUE, WE AGREE WITH GSA THAT A BARTERING TRANSACTION NOT INVOLVING CASH RECEIPTS DOES NOT HAVE AN IMPACT ON THE FUND'S UNOBLIGATED BALANCE. CONSEQUENTLY, SUCH BARTERING CAN CONTINUE EVEN IF THE FUND'S UNOBLIGATED BALANCE EXCEEDS $250 MILLION.

BACKGROUND

PUBLIC LAW NO. 98-525, SEC. 903, 98 STAT. 2573, THE DEPARTMENT OF DEFENSE AUTHORIZATION ACT, 1985, AMENDED THE STRATEGIC AND CRITICAL MATERIALS STOCK PILING ACT, 50 U.S.C. SEC. 98 ET SEQ., SO THAT SEC. 5(B)(2), 50 U.S.C. SEC. 98D(B)(2), NOW READS:

"EXCEPT FOR DISPOSALS MADE UNDER THE AUTHORITY OF PARAGRAPH (4) OR (5) OF SECTION 98E(A) OF THIS TITLE OR UNDER 98F(A) OF THIS TITLE, NO DISPOSAL SHALL BE MADE FROM THE STOCKPILE *** (2) IF THE DISPOSAL WOULD RESULT IN THERE BEING AN UNOBLIGATED BALANCE IN THE NATIONAL DEFENSE STOCKPILE TRANSACTION FUND IN EXCESS OF $250,000,000." /1/

SECTION 905 OF THE 1985 DOD AUTHORIZATION ACT, PUB.L. 98-525, 98 STAT. 2574, ALSO PROVIDES THAT:

"THERE SHALL BE DEPOSITED INTO THE NATIONAL DEFENSE STOCKPILE TRANSACTION FUND ESTABLISHED UNDER SECTION 9 OF THE ACT (50 U.S.C. SEC. 98H) 30 PERCENT OF ALL MONEY ACCRUING TO THE UNITED STATES DURING FISCAL YEAR 1985 FROM LANDS IN THE NAVAL PETROLEUM AND OIL SHALE RESERVES (LESS AMOUNTS SPENT FOR EXPLORATION, DEVELOPMENT AND OPERATION OF THOSE RESERVES AND RELATED EXPENSES DURING THAT PERIOD). MONEY DEPOSITED INTO THE FUND UNDER THIS SUBSECTION SHALL BE DEEMED TO HAVE BEEN COVERED INTO THE FUND UNDER SECTION 9(B) OF THE ACT."

THE LEGISLATIVE HISTORY OF THESE PROVISIONS IS LIMITED. THE HOUSE CONFERENCE REPORT, H. CONF. REP. NO 98-1080 AT 308, NOTES THAT THE UNOBLIGATED BALANCE LIMITATION ORIGINATED IN THE HOUSE WHILE THE FUNDING OF THE NATIONAL DEFENSE STOCKPILE TRANSACTION FUND (FUND) WITH REVENUES FROM NAVAL PETROLEUM RESERVE (NPR) ORIGINATED IN THE SENATE.

THE SENATE COMMITTEE ON ARMED SERVICES DEVELOPED THE TRANSFER OF FUNDS PROVISION "OUT OF CONCERN FOR THE STATUS OF THE NATIONAL DEFENSE STOCKPILE" IN VIEW OF THE FIRST REQUEST IN 20 YEARS FOR AUTHORITY TO MAKE PURCHASES AND THE INHERENT LIMITATION ON PURCHASES WHEN FUNDING COMES SOLELY FROM SALES OF EXCESS STOCKPILE MATERIALS. S. REP. NO. 98 500 AT 262 (1984). AS INDICATED BY THE SENATE COMMITTEE REPORT, THE TRANSFER OF FUNDS PROVISION WAS DESIGNED TO PROVIDE AN ADDITIONAL SOURCE OF INCOME WITH WHICH TO MAKE THE FUND'S EXPECTED PURCHASES.

"THE COMMITTEE'S DECISION ON 30 PERCENT OF THE NAVAL PETROLEUM RESERVES RECEIPTS IN EXCESS OF OPERATING EXPENSES IS NEITHER ARBITRARY NOR PERMANENT; PURCHASES FOR THE STOCKPILE DURING FISCAL YEAR 1985 USING THE ANTICIPATED REVENUES FROM SALES OF EXCESS MATERIALS UNDER CURRENT DISPOSAL AUTHORITY, PLUS THE REVENUES FROM THE NAVAL PETROLEUM RESERVES RECEIPTS DESIGNATED FOR DEPOSIT IN THE STOCKPILE TRANSACTION FUND DURING FISCAL YEAR 1985 BY THIS SECTION, ARE CONSISTENT WITH THE LEVEL OF PURCHASES PRESENTLY AUTHORIZED FOR THE NATIONAL DEFENSE STOCKPILE."

S. REP. NO. 98-500 AT 262 (1984).

HOUSE REPORT NO. 98-961 AT 269, STATES THAT THE LIMITATION ON THE AMOUNT OF THE FUND'S UNOBLIGATED BALANCE ($25 MILLION IN THE HOUSE BILL) WAS INTENDED

"TO ENCOURAGE THE PROMPT PURCHASE OF NEEDED STOCKPILE MATERIAL WITH PROCEEDS FROM DISPOSALS. TO THE EXTENT POSSIBLE, THE COMMITTEE INTENDS THAT THE EXECUTIVE BRANCH BALANCE PURCHASES WITH SALES."

PUBLIC LAW NO. 98-525 WAS ENACTED ON OCTOBER 19, 1984. THEREAFTER, WE UNDERSTAND THAT THE DEPARTMENT OF ENERGY (DOE) TRANSFERRED TO THE FUND FOUR MONTHLY INSTALLMENTS OF APPROXIMATELY $96 MILLION REPRESENTING 30 PERCENT OF THE NET REVENUES FROM THE NPR TO THAT TIME. /2/ SUBSEQUENT PAYMENTS WERE, AT THE BEHEST OF THE GENERAL SERVICES ADMINISTRATION (GSA), RETAINED BY DOE IN A DOE SUSPENSE ACCOUNT. /3/ RETENTION OF THE NPR RECEIPTS IN THE SUSPENSE FUND WAS OSTENSIBLY TO OBTAIN CONSISTENCY BETWEEN THE TRANSFER REQUIREMENT OF SECTION 905, AND THE ADMINISTRATION'S LEGISLATIVE PROPOSAL TO REPEAL THE TRANSFER REQUIREMENT AS OF THE DATE OF ENACTMENT OF PUB.L. NO. 98-525. /4/ EVEN THOUGH NO TRANSFERS HAVE BEEN MADE SINCE FEBRUARY 1985, THE FUND'S UNOBLIGATED BALANCE IS SUFFICIENT TO SUPPORT THE ACQUISITIONS REFLECTED IN THE ANNUAL MATERIALS PLANS FOR FISCAL YEARS 1984 AND 1985. ACCORDINGLY, THE DELAY IN MAKING TRANSFERS DOES NOT PRESENTLY PREVENT ACQUISITIONS.

DISCUSSIONS:

A.

MUST THE DOE MAKE MONTHLY TRANSFERS TO THE FUND OF 30 PERCENT OF THE NET NPR RECEIPTS?

SECTION 905 DOES NOT STATE SPECIFICALLY WHEN 30 PERCENT OF THE NPR RECEIPTS (NET OF CERTAIN EXPENSES) MUST BE TRANSFERRED BY DOE TO GSA. THE ABSENCE OF STATUTORY DIRECTION, DOE, IN CONSULTATION WITH GSA, HAS SUBSTANTIAL DISCRETION TO DETERMINE THE FREQUENCY OF THE TRANSFERS. IT IS THE EXERCISE OF THAT DISCRETION AND THE REASONS THAT SUPPORT IT THAT CONCERNS US HERE.

DOE AND GSA ORIGINALLY NEGOTIATED A MONTHLY ACCOUNTING AND TRANSFER OF NET NPR RECEIPTS, AND TRANSFERS WERE IN FACT MADE ON THAT BASIS. NOTHING IN THE RECORD BEFORE US INDICATES THAT MONTHLY TRANSFERS TO THE FUND WERE ABANDONED BECAUSE THEY WERE FOUND TO BE INFEASIBLE OR AN UNREASONABLE IMPLEMENTATION OF SEC. 905. INDEED, WE THINK TRANSFERS FROM THE DOE SUSPENSE ACCOUNT TO THE FUND ON A MONTHLY BASIS WERE AN EMINENTLY REASONABLE IMPLEMENTATION OF SEC. 905.

DOE STOPPED THE MONTHLY TRANSFERS TO THE FUND AT GSA'S REQUEST, OSTENSIBLY BECAUSE OF THE NEED TO OBTAIN CONSISTENCY BETWEEN SEC. 905 AND THE ADMINISTRATION'S PROPOSED LEGISLATION TO REPEAL THAT SECTION. THE RETENTION OF FUNDS IN THE DOE SUSPENSE ACCOUNT PENDING THE OUTCOME OF THE ADMINISTRATION'S REPEAL PROPOSAL DELAYS THE FUND'S RECEIPT OF MONEY THAT CURRENTLY COULD BE TRANSFERRED. THIS ACTION TEMPORARILY ACCOMPLISHES IN THE PRESENT, WITHOUT CONGRESSIONAL ACTION, WHAT THE PROPOSED REPEAL LEGISLATION IS DESIGNED TO ACCOMPLISH WHEN AND IF ENACTED AT SOME FUTURE TIME. ALSO, THE CONTINUING NEED TO RETAIN FUNDS APPEARS DOUBTFUL SINCE THE REPEALER SEEMS TO HAVE LITTLE CHANCE OF PASSING. /5/

IN SUM, GSA, THROUGH DOE, HAS APPARENTLY MANIPULATED THE FLEXIBILITY INHERENT IN SECTION 905 FOR ITS OWN PURPOSES RATHER THAN CONTINUE A REASONABLE FREQUENCY OF TRANSFERS TO THE FUND. NEVERTHELESS, AS SHOWN BELOW, A LITERAL READING OF BOTH SECTION 905 AND ITS LEGISLATIVE HISTORY SUPPORT THE DOE AND GSA ACTION ALTHOUGH IT IS NOT WHAT WE OR CONGRESS WOULD NECESSARILY HAVE ADOPTED.

SECTION 905 CONFERS ON DOE SUBSTANTIAL DISCRETION TO DETERMINE THE FREQUENCY OF TRANSFERS, BUT THAT DISCRETION IS NOT UNLIMITED. DOE MUST ULTIMATELY MAKE THE TRANSFER NO LATER THAN SUCH POINT IN TIME WHEN ALL NPR RECEIPTS ACCRUING DURING FISCAL YEAR 1985 AND ALL THE EXPENSES TO BE NETTED AGAINST THOSE RECEIPTS ARE KNOWN, I.E., AT THE END OF FISCAL YEAR 1985 OR SHORTLY THEREAFTER. /6/ WITHIN THIS CONSTRAINT, HOWEVER, MORE FREQUENT TRANSFERS ARE PERMISSIBLE AND, AS PREVIOUSLY DISCUSSED, DOE AND GSA DID AGREE AT ONE POINT TO MONTHLY TRANSFERS. /7/

THE VIEW THAT TRANSFERS CAN BE POSTPONED TO YEAR'S END IS COMPATIBLE WITH THE LIMITED LEGISLATIVE HISTORY THAT EXISTS. THE TRANSFER PROVISION ORIGINATED IN THE SENATE AS A MEANS OF ENSURING THAT THE FUND WOULD HAVE ADEQUATE MONEY TO SUPPORT STOCKPILE PURCHASES DURING 1985 CONSISTENT WITH THE LEVEL OF PURCHASES THEN AUTHORIZED. THE SENATE ALSO DID NOT WANT TO HAVE TO RELY ENTIRELY ON STOCKPILE DISPOSALS TO GENERATE RECEIPTS FOR THOSE PURCHASES.

THE SENATE REPORT DOES SEEM TO EMPHASIZE THAT PURCHASES WERE ANTICIPATED "DURING FISCAL YEAR 1985" AND THAT NPR RECEIPTS WERE "DESIGNATED FOR DEPOSIT" TO THE FUND "DURING" FISCAL YEAR 1985. ALTHOUGH "DURING FY 85" CERTAINLY CONNOTES AN EVENT WITHIN A SPECIFIED TIME FRAME, SUCH PHRASE DOES NOT ANSWER THE MORE RELEVANT QUESTION OF WHEN DURING THAT TIME FRAME THE EVENTS MUST OCCUR. WHENEVER ELSE THAT EVENT MIGHT OCCUR DURING FISCAL 1985, IT IS EQUALLY ARGUABLE TO SAY THAT THE EVENT MIGHT OCCUR DURING THE VERY LAST MONTHS, DAYS OF MOMENTS OF THE FISCAL YEAR 1985. /8/

ACCEPTANCE OF "DURING" AS ALLOWING A TRANSFER AT YEAR'S END MEANS THAT NO TRANSFER IS NECESSARILY REQUIRED BEFORE THAT TIME. THIS IN TURN DIMINISHES THE IMPORTANCE OF THE DOE-GSA ACTION OF ESTABLISHING AND THEN TERMINATING MONTHLY TRANSFERS SINCE THESE AGENCIES WERE NEITHER REQUIRED TO START TRANSFERS AT SUCH FREQUENCY OR CONTINUE THEM. CONSEQUENTLY, WHILE OUR VIEW THAT MONTHLY TRANSFERS WERE REASONABLE REMAINS A VALID OBSERVATION, IT CANNOT BE CONSIDERED AN IMPERATIVE FOR CONTINUED ACTION WHEN CONSIDERED AGAINST THE DISCRETION THAT FLOWS FROM SEC. 905.

BASED ON THE FOREGOING, WE CONCLUDE THAT SEC. 905 DOES NOT REQUIRE DOE AND GSA TO MAINTAIN A PROGRAM OF MONTHLY TRANSFERS TO THE FUND. THERE IS NO SPECIFIC STATUTORY LANGUAGE THAT DICTATES A DIFFERENT CONCLUSION. THE CONTRARY, THE VAGUENESS OF SEC. 905'S LANGUAGE CONFERS ON THE AGENCY SUBSTANTIAL DISCRETION TO DETERMINE "WHEN" DURING THE FISCAL YEAR TRANSFERS ARE TO BE MADE. MOREOVER, IN THE ABSENCE OF A STATUTORILY DECLARED "WHEN", THE ARGUMENT THAT CONGRESS COULD NEVER HAVE INTENDED A SINGLE TRANSFER AT YEAR'S END DOES NO MORE THAN BEG THE QUESTION OF "WHEN" CONGRESS DID INTEND THE TRANSFERS TO BE MADE. WITHOUT A STATUTORILY PRESCRIBED TRANSFER TIME, A TRANSFER ON THE LAST DAY OF THE FISCAL YEAR IS AS LEGALLY REASONABLE AS A TRANSFER AT MORE FREQUENT INTERVALS DURING THE YEAR.

TO PRECLUDE A REOCCURRENCE OF THE EVENTS RESPECTING TRANSFERS AS WELL AS TO CLARIFY THE LIMITATIONS LANGUAGE PERTAINING TO UNOBLIGATED FUND BALANCES, THE FOLLOWING LEGISLATIVE CHANGES ARE SUGGESTED IN REPORTING TO CONGRESS:

1. AMEND THE LANGUAGE OF SEC. 905, PUB.L. NO. 98-525 BY INSERTING AFTER "DEPOSITED" WHERE IT FIRST APPEARS ONE OF THE FOLLOWING PHRASES "ON A MONTHLY BASIS", "ON A QUARTERLY BASIS", "ON A SEMIANNUAL BASIS", "ANNUALLY", ETC..

2. AMEND 50 U.S.C. SEC. 98D(B) BY:

A. STRIKING "OR" BEFORE "(2)";

B. INSERTING A COMMA IN LIEU OF THE PERIOD FOLLOWING "250,000,000; AND

C. ADDING "OR (3) AT ANY TIME THE UNOBLIGATED BALANCE IN THE DEFENSE STOCKPILE TRANSACTION FUND EXCEEDS $250,000,000.

B.

IS GSA'S AUTHORITY TO BARTER LIMITED BY AN UNOBLIGATED FUND BALANCE IN EXCESS OF $250 MILLION?

CHAIRMAN BENNETT ALSO QUESTIONS THE ASSERTION OF THE ACTING ADMINISTRATOR, GSA, THAT

"OUR DISPOSAL OF STOCKPILE MATERIAL AS PAYMENT FOR THE PRESIDENTIALLY- DIRECTED FERROALLOYS UPGRADING PROGRAM WILL CONTINUE EVEN IF THE ($250 MILLION) LIMITATION SHOULD BE REACHED." /9/

WE UNDERSTAND THAT THE UPGRADING REFERRED TO IS BEING ACCOMPLISHED BY BARTER. SPECIFICALLY, CONTRACTORS PERFORMING THE UPGRADING ARE PAID WITH OTHER MATERIALS RATHER THAN CASH. IN THIS REGARD, GSA ALSO ASSERTS:

"SINCE THE LIMITATION ONLY APPLIES TO RECEIPTS DEPOSITED IN THE TRANSACTION FUND, AND NO FUNDS ARE GENERATED WHEN MATERIAL IS DISPOSED OF AS PAYMENT FOR UPGRADING THE FERROALLOYS, THE LIMITATION IS INAPPLICABLE."

WE AGREE. THE LANGUAGE OF 50 U.S.C. SEC. 98D(B)(2) PRECLUDES A DISPOSAL "THAT WOULD RESULT IN THERE BEING AN UNOBLIGATED BALANCE *** IN EXCESS OF $250,000,000." SINCE WE ARE NOT ADVISED THAT ANY CASH RECEIPTS ARE GENERATED BY GSA'S USE OF BARTER TRANSACTIONS TO UPGRADE ITS STOCKS OF FERROALLOYS, IT IS NOT APPARENT HOW SUCH A TRANSACTION WOULD "RESULT IN THERE BEING", OR OTHERWISE AFFECT, THE UNOBLIGATED BALANCE IN THE FUND. SUCH BARTERS COULD CONTINUE, THEN, EVEN IF THE FUND'S UNOBLIGATED BALANCE EXCEEDS $250 MILLION. IF CHAIRMAN BENNETT EVENTUALLY DECIDES THAT BARTER AGREEMENTS ARE A SIGNIFICANT PROBLEM REQUIRING CORRECTIVE LEGISLATION, WE ARE AVAILABLE TO ASSIST HIM IN THAT EFFORT.

/1/ 50 U.S.C. SEC. 98E(A)(4) AUTHORIZES THE ROTATION OF STOCKPILE MATERIAL TO PREVENT DETERIORATION; SEC. 98E(A)(5) AUTHORIZES THE DISPOSAL OF EXCESS MATERIALS THAT MAY CAUSE A LOSS TO THE GOVERNMENT IF ALLOWED TO DETERIORATE; AND SEC. 98F(A) AUTHORIZES THE DISPOSITION OF STOCKPILE MATERIAL WHEN THE PRESIDENT DETERMINES THAT THE DISPOSITION IS REQUIRED FOR NATIONAL DEFENSE, AND IN TIME OF WAR OR NATIONAL EMERGENCY.

/2/ THE OCTOBER AND NOVEMBER 1984 INSTALLMENTS WERE TRANSFERRED ON DECEMBER 19, 1984; THE DECEMBER, 1984 INSTALLMENT ON JANUARY 9, 1985; AND THE JANUARY, 1985 INSTALLMENT ON FEBRUARY 8, 1985. SUBSEQUENT TRANSFERS WERE NOT MADE.

/3/ DOE HAD PREVIOUSLY ESTABLISHED THIS SUSPENSE ACCOUNT AS A TEMPORARY REPOSITORY FOR AMOUNTS DUE GSA TO ASSURE THAT 30 PERCENT OF DOE'S MONTHLY COLLECTIONS FROM THE NPR WOULD BE DEPOSITED IN THE FUND. POINT PAPER FROM GSA COMPTROLLER TO THE ACTING ADMINISTRATOR, GSA, MAY 4, 1985.

/4/ LETTER FROM R. FONTAINE, COMPTROLLER TO CONTROLLER, DOE DATED MARCH 7, 1985.

/5/ BOTH SENATE AND HOUSE ARMED SERVICES COMMITTEES WOULD CONTINUE THE REQUIREMENTS OF THE SECTION TO FISCAL YEAR 1986. HOUSE REPT. NO. 99-81, AT 307; S. REP. NO. 99-41, AT 219, BOTH 99TH CONG., 1ST SESS.

/6/ STRICTLY SPEAKING SEC. 905 DOES NOT EVEN DICTATE THE TIMING OF THIS TRANSFER. THEORETICALLY, EXPENSES COULD BE NETTED AGAINST RECEIPTS AT THE END OF THE FISCAL YEAR AND THEN HELD INDEFINITELY BY DOE. SINCE SUCH A WITHHOLDING EFFECTIVELY NULLIFIES SEC. 905, WE OPT FOR A READING OF THE SECTION THAT PLACES AN OUTSIDE TIME LIMIT ON THE ABILITY OF DOE TO NOT TRANSFER THE NET NPR RECEIPTS.

/7/ GSA'S POINT PAPER (FOOTNOTE 3) STATES THAT A MONTHLY TRANSFER WAS AGREED TO, EVEN THOUGH LESS FREQUENTLY TRANSFERS WERE ALLOWED UNDER SECTION 905, BECAUSE DOE RECEIVES "NPR RECEIPTS MONTHLY." THIS MAY BE FACTUALLY INACCURATE SINCE WE ARE INFORMALLY ADVISED THAT DOE RECEIVES NPR RECEIPTS DAILY. DOE MAY, HOWEVER, TRANSFER NET NPR RECEIPTS TO MISCELLANEOUS RECEIPTS ON A MONTHLY BASIS. THIS DISCREPANCY, IF IT EXISTS, DOES NOT AFFECT OUR CONCLUSIONS.

/8/ A TRANSFER TO THE FUND MADE VERY LATE IN THE FISCAL YEAR COULD REPRESENT ALMOST ALL THE RECEIPTS ACCRUING TO THE NPR DURING 1985. EXPENSES TO BE NETTED AGAINST RECEIPTS MIGHT NOT BE FULLY KNOWN AT THAT TIME AND AN ADJUSTMENT MIGHT WELL BE NECESSARY EARLY IN THE NEXT FISCAL YEAR. HOWEVER, THIS WOULD BE TRUE OF ANY TRANSFER REPRESENTING NPR RECEIPTS ACCRUING TO THE UNITED STATES IN THE WANING DAYS OF FY 1985, IRRESPECTIVE OF THE NUMBER OF PRIOR TRANSFERS.

/9/ LETTER DATED APRIL 5, 1985 FROM THE ACTING ADMINISTRATOR, GSA, TO CHAIRMAN, HOUSE ARMED SERVICES COMMITTEE.