B-23214, FEBRUARY 14, 1942, 21 COMP. GEN. 769

B-23214: Feb 14, 1942

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IN THE ABSENCE OF A SHOWING AS TO WHY THE AUTOMOBILE COULD NOT HAVE BEEN OPERATED WITHOUT SUCH LICENSES OR WHY IT WAS NECESSARY FOR THE CONTRACTOR TO OBTAIN A TITLE. THE COST OF A CHAUFFEUR'S LICENSE OBTAINED FOR AN EMPLOYEE OF A COST PLUS -A-FIXED-FEE CONTRACTOR IS PERSONAL TO THE EMPLOYEE AS AN INCIDENT OF HIS EMPLOYMENT. IS TRANSMITTED HEREWITH FOR AN ADVANCE DECISION AS TO THE PROPRIETY OF PAYMENT. AS THIS OFFICE IS IN DOUBT AS TO WHETHER THE PROVISIONS OF ARTICLE IV-B. OR SUBDIVISION THEREOF WHEREIN THE WORK IS DONE. ATTENTION IS INVITED TO VIEWS OF THE COMMANDING OFFICER. IS AS FOLLOWS: 1. REFERENCE IS MADE TO INVOICE NO. 139 OF THE RIEFLING AUTOMOBILE COMPANY. WHICH IS RESUBMITTED HEREWITH ON BU.

B-23214, FEBRUARY 14, 1942, 21 COMP. GEN. 769

CONTRACTS - COST-PLUS - AUTOMOBILE LICENSE TAGS; CHAUFFEURS' LICENSES UNDER A COST-PLUS-A-FIXED-FEE CONTRACT PROVIDING FOR REIMBURSEMENT OF STATE OR LOCAL TAXES OR FEES, THE CONTRACTOR MAY BE REIMBURSED ONLY TAXES OR FEES IMPOSED DIRECTLY ON THE CONTRACTOR AND NOT THOSE WHICH IT UNDERTAKES TO PAY ON GOVERNMENT PROPERTY BEING USED IN CONNECTION WITH THE CONTRACT WORK. A COST-PLUS-A-FIXED-FEE CONTRACTOR MAY NOT BE REIMBURSED AMOUNTS PAID TO A STATE AND MUNICIPALITY FOR AUTOMOBILE LICENSE TAGS AND TITLE FOR A GOVERNMENT-OWNED AUTOMOBILE BEING USED BY THE CONTRACTOR IN CONNECTION WITH THE CONTRACT WORK, IN THE ABSENCE OF A SHOWING AS TO WHY THE AUTOMOBILE COULD NOT HAVE BEEN OPERATED WITHOUT SUCH LICENSES OR WHY IT WAS NECESSARY FOR THE CONTRACTOR TO OBTAIN A TITLE. THE COST OF A CHAUFFEUR'S LICENSE OBTAINED FOR AN EMPLOYEE OF A COST PLUS -A-FIXED-FEE CONTRACTOR IS PERSONAL TO THE EMPLOYEE AS AN INCIDENT OF HIS EMPLOYMENT, AND, THEREFORE, THE CONTRACTOR MAY NOT BE REIMBURSED THE COST OF SUCH LICENSE.

COMPTROLLER GENERAL WARREN TO MAJ. R. GRITZ, UNITED STATES ARMY, FEBRUARY 14, 1942:

THERE HAS BEEN RECEIVED, BY REFERENCE FROM THE SECRETARY OF WAR, YOUR LETTER OF DECEMBER 9, 1941, AS FOLLOWS:

1. THE ENCLOSED BUREAU VOUCHER NO. M/352, IN THE AMOUNT OF $20.50, HAVING BEEN PRESENTED TO THE UNDERSIGNED DISBURSING OFFICER BY THE MCQUAY-NORRIS MANUFACTURING COMPANY, THROUGH THE OFFICE OF THE COMMANDING OFFICER, ST. LOUIS ORDNANCE PLANT, ST. LOUIS, MISSOURI, REQUESTING REIMBURSEMENT UNDER COST-PLUS-A-FIXED-FEE CONTRACT W-ORD 505, DATED MARCH 1, 1941, IS TRANSMITTED HEREWITH FOR AN ADVANCE DECISION AS TO THE PROPRIETY OF PAYMENT, AS THIS OFFICE IS IN DOUBT AS TO WHETHER THE PROVISIONS OF ARTICLE IV-B, PARAGRAPH (B) OF THE PRIME CONTRACT, READING AS FOLLOWS:

"PROCURE ALL NECESSARY PERMITS AND LICENSES WHENEVER OBTAINABLE; OBEY AND ABIDE BY ALL APPLICABLE LAWS, REGULATIONS, ORDINANCES, AND OTHER RULES OF THE UNITED STATES OF AMERICA, OF THE STATE, TERRITORY, OR SUBDIVISION THEREOF WHEREIN THE WORK IS DONE, OR ANY OTHER DULY CONSTITUTED PUBLIC AUTHORITY," CONTAIN SUFFICIENT AUTHORITY TO JUSTIFY PAYMENT OF THE ACCOUNT.

2. ATTENTION IS INVITED TO VIEWS OF THE COMMANDING OFFICER, ST. LOUIS ORDNANCE PLANT, ON THIS MATTER EXPRESSED IN LETTER ATTACHED TO VOUCHER.

THE REFERRED TO LETTER, DATED NOVEMBER 18, 1941, FROM THE COMMANDING OFFICER, ST. LOUIS ORDNANCE PLANT, ST. LOUIS, MO., IS AS FOLLOWS:

1. REFERENCE IS MADE TO INVOICE NO. 139 OF THE RIEFLING AUTOMOBILE COMPANY, WHICH IS RESUBMITTED HEREWITH ON BU. VOU. NO. M/352 FOR REIMBURSEMENT.

2. THIS INVOICE WAS ORIGINALLY SUBMITTED FOR REIMBURSEMENT ON BU. VOU. NO. M/265, IT BEING DEDUCTED BY YOU WITH THE EXPLANATION THAT IT DID NOT APPEAR TO BE A PROPER PROCUREMENT UNDER CONTRACT W-ORD-505.

3. THE AUTOMOBILE IN QUESTION WAS PURCHASED BY THE MCQUAY-NORRIS MFG. COMPANY AT A PRICE CONSIDERED APPROXIMATELY $200.00 BELOW THE COST HAD THE PURCHASE BEEN MADE ON A RENTAL BASIS AT THE BEGINNING OF THE ORGANIZATION OF THE ST. LOUIS ORDNANCE PLANT. AT THE TIME, THE GOVERNMENT WAS UNABLE TO FURNISH THE NECESSARY PLATES, AND IN ORDER TO MAKE IMMEDIATE USE OF THE CAR, AS IT WAS NEEDED BADLY, THE CONTRACTOR SECURED THE NECESSARY STATE AND CITY LICENSES IN ORDER TO COMPLY WITH STATE LAWS AND LOCAL ORDINANCES, AS STIPULATED IN TITLE IV, ARTICLE IV B, PARAGRAPH (B) OF CONTRACT W-ORD- 505, WHICH READS AS FOLLOWS:

STATE LICENSE AND TITLE --------------------------- $12.00 OBEY AND ABIDE BY ALL APPLICABLE LAWS, REGULATIONS, ORDINANCES, AND OTHER RULES OF THE UNITED STATES OF AMERICA, OF THE STATE, TERRITORY, OR SUBDIVISION THEREOF WHEREIN THE WORK IS DONE, OR ANY OTHER DULY CONSTITUTED PUBLIC AUTHORITY.'

4. IT IS REQUESTED THAT REIMBURSEMENT BE MADE AS SUBMITTED, OR THE VOUCHER BE REFERRED TO HIGHER AUTHORITY FOR ADVANCE DECISION.

IT FURTHER APPEARS FROM YOUR LETTER OF DECEMBER 9, 1941, TO THE CHIEF OF FINANCE, WAR DEPARTMENT, WASHINGTON, D.C., THAT THE LICENSES, ETC., WERE PROCURED FOR USE WITH A FORD SEDAN PURCHASED BY THE CONTRACTOR FOR THE GOVERNMENT AND THAT REIMBURSEMENT WAS MADE THEREFOR BY THE GOVERNMENT TO THE CONTRACTOR UNDER THE TERMS OF THE CONTRACT IN JULY 1941, ON YOUR VOUCHER NO. 3170. THE SUBMITTED VOUCHER IS SUPPORTED BY AN INVOICE OF THE RIEFLING AUTOMOBILE CO. WHICH CONTAINS A SIGNED NOTATION TO THE EFFECT THAT THE SAID COMPANY ACKNOWLEDGED THAT PAYMENT IN FULL HAD BEEN MADE ON THE INVOICE, THE AMOUNT OF WHICH WAS ITEMIZED AS FOLLOWS:

"/B) PROCURE ALL NECESSARY PERMITS AND LICENSES WHENEVER OBTAINABLE;

CITY LICENSE -------------------------------------- 5.50

CHAUFFEURS LICENSE -------------------------------- 3.00

TOTAL ----------------------------------------- 20.50

CONTRACT NO. W-ORD-505, DATED FEBRUARY 26, 1941, PROVIDED FOR THE EQUIPMENT PREPARATION FOR OPERATION (INCLUDING TRAINING OF OPERATING PERSONNEL), AND OPERATION OF AN ORDNANCE MANUFACTURING PLANT AT ST. LOUIS, MO., IN CONSIDERATION OF THE REIMBURSEMENT BY THE GOVERNMENT OF THE CONTRACTOR'S EXPENDITURES AS PROVIDED IN THE CONTRACT, PLUS STIPULATED FIXED FEES. THE CONTRACT WAS MODIFIED BY SUPPLEMENTAL AGREEMENT DATED AUGUST 11, 1941, SO AS TO PROVIDE FOR AN INCREASE IN THE CAPACITY OF THE PLANT AND FOR PAYMENT OF THE INCREASED COSTS RESULTING THEREFROM.

ARTICLE III-A OF THE CONTRACT PROVIDES, IN PERTINENT PART, AS FOLLOWS:

THE CONTRACTOR SHALL BE REIMBURSED IN THE MANNER HEREINAFTER DESCRIBED FOR SUCH OF ITS ACTUAL EXPENDITURES IN THE PERFORMANCE OF THE WORK UNDER THIS CONTRACT AS MAY BE APPROVED OR RATIFIED BY THE CONTRACTING OFFICER AND WHICH COSTS AND EXPENSES SHALL INCLUDE BUT SHALL NOT BE LIMITED TO THE FOLLOWING ITEMS:

J. PAYMENTS MADE BY THE CONTRACTOR UNDER THE SOCIAL SECURITY ACT (EMPLOYER'S CONTRIBUTION) AND ANY APPLICABLE FEDERAL, STATE OR LOCAL TAXES, FEES OR CHARGES WHICH THE CONTRACTOR MAY BE REQUIRED TO PAY, ON ACCOUNT OF THIS CONTRACT (OTHER THAN TAXES ON THE FIXED-FEES); AND IF APPROVED IN WRITING IN ADVANCE BY THE CONTRACTING OFFICER ROYALTIES ON PATENTS USED INCLUDING THOSE OWNED BY THE CONTRACTOR.

ARTICLE IV-B OF THE CONTRACT PROVIDES, IN PERTINENT PART, AS FOLLOWS:

6. THE CONTRACTOR HEREBY AGREES THAT IT WILL:

(B) PROCURE ALL NECESSARY PERMITS AND LICENSES WHENEVER OBTAINABLE; OBEY AND ABIDE BY ALL APPLICABLE LAWS, REGULATIONS, ORDINANCES AND OTHER RULES OF THE UNITED STATES OF AMERICA, OF THE STATE, TERRITORY, OR SUBDIVISION THEREOF WHEREIN THE WORK IS DONE, OR ANY OTHER DULY CONSTITUTED PUBLIC AUTHORITY.

8. THE TITLE TO ALL WORK UNDER THIS CONTRACT, COMPLETED OR IN THE COURSE OF CONSTRUCTION OR MANUFACTURE, AND TO ALL THE CORES MANUFACTURED OR IN THE PROCESS OF BEING MANUFACTURED, SHALL BE IN THE GOVERNMENT. LIKEWISE, UPON DELIVERY AT THE SITE OF THE WORK, OR AT AN APPROVED STORAGE SITE, TITLE TO ALL PURCHASED MATERIALS, TOOLS, MACHINERY, EQUIPMENT, AND SUPPLIES, FOR WHICH THE CONTRACTOR SHALL BE ENTITLED TO BE REIMBURSED UNDER TITLE III HEREOF, SHALL VEST IN THE GOVERNMENT. THE GOVERNMENT SHALL BEAR ALL RISK INCIDENT TO SUCH OWNERSHIP. THESE PROVISIONS AS TO TITLE BEING VESTED IN THE GOVERNMENT SHALL NOT OPERATE HOWEVER, TO RELIEVE THE CONTRACTOR FROM ANY DUTIES IMPOSED UPON IT UNDER THE TERMS OF THIS CONTRACT.

IT IS A WELL ESTABLISHED PRINCIPLE OF LAW THAT THE PROPERTY OF THE UNITED STATES AND THE INSTRUMENTALITIES WHEREBY IT PERFORMS ITS PROPER GOVERNMENTAL FUNCTIONS CANNOT BE TAXED BY A STATE OR A POLITICAL SUBDIVISION THEREOF. ON THE BASIS OF SUCH PRINCIPLE OF LAW IT HAS BEEN HELD BY THE ACCOUNTING OFFICERS OF THE GOVERNMENT THAT THERE IS NO AUTHORITY OF LAW FOR PAYMENT FROM PUBLIC FUNDS OF A FEE FOR A LICENSE TAG REQUIRED BY A STATE ON A GOVERNMENT VEHICLE. SEE 15 COMP. DEC. 231; 1 COMP. GEN. 150; 4 ID. 412, AND 18 ID. 151. ALSO, IT HAS BEEN HELD THE MATTER OF OBTAINING A DRIVER'S PERMIT AND THE PAYING OF A FEE THEREFOR, IF NECESSARY, IS PERSONAL TO THE EMPLOYEE AS AN INCIDENT TO QUALIFYING FOR THE POSITION FOR WHICH EMPLOYED AND THAT THE COST OF SUCH A FEE MAY NOT PROPERLY BE CHARGED TO FEDERAL FUNDS. 23 COMP. DEC. 386; 3 COMP. GEN. 663, AND 6 ID. 432.

THEREFORE, WHILE THE TERMS OF THE CONTRACT PROVIDE FOR REIMBURSING THE CONTRACTOR FOR ANY STATE OR LOCAL TAXES OR FEES WHICH IT MAY BE REQUIRED TO PAY IN THE PERFORMANCE OF THE CONTRACT, SUCH PROVISIONS CONTEMPLATE REIMBURSEMENT ONLY FOR TAXES OR FEES WHICH ARE IMPOSED DIRECTLY ON THE CONTRACTOR AND MAY NOT BE CONSTRUED TO INCLUDE STATE OR LOCAL TAXES ON THE PROPERTY OF THE FEDERAL GOVERNMENT WHICH THE CONTRACTOR MAY UNDERTAKE TO PAY. COMPARE JAMES V. DRAVO CONTRACTING COMPANY, 302 U.S. 134, AND ALABAMA V. KING AND BOOZER, 314 U.S. 1, 86 L.1ED. ( ADV. OPS.)

NO EXPLANATION HAS BEEN FURNISHED AS TO WHY THE NECESSARY PLATES COULD NOT HAVE BEEN OBTAINED FROM THE FEDERAL GOVERNMENT OR WHY TEMPORARY IDENTIFICATION TAGS COULD NOT HAVE BEEN USED, OR WHY IT WAS NECESSARY FOR THE CONTRACTOR TO OBTAIN A TITLE, OR STATE AND CITY LICENSE TAGS IN ORDER TO OPERATE THE CAR, SINCE OWNERSHIP THEREOF HAD VESTED IN THE UNITED STATES UPON ITS DELIVERY TO THE PROJECT SITE. THEREFORE, IN VIEW OF THE IMMUNITY OF PROPERTY OF THE UNITED STATES FROM TAXATION BY A STATE OR A POLITICAL SUBDIVISION THEREOF, AND IN THE ABSENCE OF EVIDENCE CLEARLY SHOWING WHY THE CAR COULD NOT HAVE BEEN OPERATED UNLESS STATE AND LOCAL LICENSES WERE OBTAINED, IT MUST BE HELD THAT NO LEGAL BASIS EXISTS FOR REIMBURSING THE CONTRACTOR FOR THE AMOUNTS PAID FOR THE TITLE AND SUCH LICENSES. MOREOVER, WHILE IT APPEARS THAT THE CHAUFFEUR FOR WHOM THE LICENSE WAS PROCURED WAS AN EMPLOYEE OF THE CONTRACTOR AND NOT OF THE GOVERNMENT, SINCE IT APPEARS THAT THE OBTAINING OF THE LICENSE WAS AN INCIDENT OF HIS EMPLOYMENT, AND THUS A PERSONAL EXPENSE, REIMBURSEMENT OF THE AMOUNT PAID FOR THE CHAUFFEUR'S LICENSE IS NOT SUCH AN EXPENSE AS IS CONTEMPLATED BY THE TERMS OF THE CONTRACT HERE INVOLVED FOR REIMBURSEMENT TO THE CONTRACTOR.

ACCORDINGLY, THE VOUCHER, TOGETHER WITH SUPPORTING PAPERS, IS RETURNED WITH THE ADVICE THAT PAYMENT THEREOF IS NOT AUTHORIZED.