B-249060.2, October 19, 1993

B-249060.2: Oct 19, 1993

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APPROPRIATIONS/FINANCIAL MANAGEMENT Appropriation Availability Claim settlement Fiscal-year appropriation Availability Air Force is advised that there is no authority to suspend implementation of the requirement that its funds must be used to pay the first $100. Our views on this matter are set out in B-249060. The military agencies are required to use their own appropriations to cover the first $100. 000 is meritorious. Inure to the benefit of related persons and/or are advanced by the same person on his or her own behalf. The provision in section 1304 which addresses the payment of MCA claims is preceded by. 000 is expressly conditioned upon satisfaction of the requirement that payment be not otherwise provided for.

B-249060.2, October 19, 1993

APPROPRIATIONS/FINANCIAL MANAGEMENT Appropriation Availability Claim settlement Fiscal-year appropriation Availability Air Force is advised that there is no authority to suspend implementation of the requirement that its funds must be used to pay the first $100,000 of each "claim" allowed by it under the Military Claims Act, 10 U.S.C. Secs. 2733, 2734 (1988), because that requirement arises by operation of law, rather than GAO policies.

Hervey A. Hotchkiss Lt. Colonel, USAF Chief, Tort Claims & Litigation Division Air Force Legal Services Agency Department of the Air Force Washington, DC 20332-6128

Dear Colonel Hotchkiss:

This responds to your letter concerning the source of payment for claims administratively settled by the Air Force pursuant to the Military Claims Act (MCA), 10 U.S.C. Secs. 2733, 2734 (1988). In your letter, you note that Mr. Neill Martin-Rolsky, a Senior Attorney in this Office, has advised that the Air Force must pay from its own appropriations the first $100,000 of each MCA claim administratively settled by it. You believe that this advice reflects a "modification of [GAO] policy" which has resulted in a "substantial increase in demand" upon your agency's appropriated funds.

Your letter asks that this Office "suspend" implementation of that policy while the Air Force seeks additional appropriations to cover its obligations. (Presumably, during that period of "suspension," the amounts that would ordinarily be payable under the MCA from Air Force appropriations would be paid from the permanent, indefinite appropriation known as the Judgment Fund, 31 U.S.C. Sec. 1304 (1988).) In the alternative, you ask that this Office expressly support a request for immediate supplemental appropriations to cover your agency's obligations under the MCA.

Contrary to the suggestion in your letter, the obligation of military agencies to cover the first $100,000 of each claim allowed under the MCA neither arises from GAO "policy" nor reflects a change in the position of this Office. Our views on this matter are set out in B-249060, Apr. 5, 1993 (copy enclosed), concluding that, by law, the military agencies are required to use their own appropriations to cover the first $100,000 of each claim settled under the MCA.

As explained in that opinion, the plain language of both the MCA and the Judgment Fund statutes require military agencies to contribute the first $100,000 towards each claim settlement. The MCA provides in 10 U.S.C. Secs. 2733(d), 2734(d) that

"[i]f the Secretary concerned considers that a claim in excess of $100,000 is meritorious, and . . . otherwise payable under [the MCA], the Secretary may pay the claimant $100,000 and report any meritorious amount in excess of $100,000 to the Comptroller General for payment [from the Judgment Fund]." (Emphasis added.)

In our opinion, it matters not that the claims, the legal causes of action, inure to the benefit of related persons and/or are advanced by the same person on his or her own behalf, as well as on the behalf of others. Nor does the fact that the claims arose from the same factual situation or circumstances make the claims any less legally cognizable as separate claims for purposes of the MCA and the Judgment Fund.

The Judgment Fund statute, 31 U.S.C. Sec. 1304(a)(3)(d), specifies that this appropriation may be used to pay "a meritorious claim" under the MCA. The provision in section 1304 which addresses the payment of MCA claims is preceded by, and connected (by the word "and") to, another provision which specifies that, in order to qualify for payment from the Judgment Fund, the award in question must not be "otherwise provided for." 31 U.S.C. Sec. 1304(a)(1) & (2). The act's use of the word "and" at the end of subsection 1304(a)(2) clearly demonstrates that the authority to use the Judgment Fund to pay those portions of MCA claims in excess of $100,000 is expressly conditioned upon satisfaction of the requirement that payment be not otherwise provided for. Cf., e.g., 13 Op. Off. Legal Counsel 436, 442- 43 (1989) (prelim. print).

To be "otherwise provided for" means that some other source of funds (including, for example, agency appropriations) is legally available to pay the award at issue. E.g., 66 Comp.Gen. 157, 160 (1986). By definition, payment of the first $100,000 of each MCA claim is otherwise provided for. Cf. 10 U.S.C Secs. 2733(d), 2734(d). The availability of sufficient appropriated funds to cover obligations under the MCA does not affect this conclusion. Cf., e.g., 66 Comp.Gen. at 160. See also Department of Energy Request to Use the Judgment for Settlement of Fernald Litigation, Op. Off. Legal Counsel, Dec. 18, 1989.

Taken together, these provisions make it clear that Congress expected the military agencies to use their appropriations to pay the first $100,000 of each claim, not each group of claims, that they settle under the MCA. Furthermore, there is nothing in these statutes, their legislative histories, or the circumstances of our interpretation of them, which permit us to "suspend" or waive implementation of this requirement. Nor do we think it appropriate to treat our recent opinion as having prospective application only. Cf., e.g., B-247506, Mar. 29, 1993, (to be published as 72 Comp.Gen. 154); 62 Comp.Gen. 438, 440 (1983).

We recognize the possibility that some Claims Group settlements may have allowed payments from the Judgment Fund that are inconsistent with the views expressed here and in B-249060. However, while such errors may occur from time to time, it has long been the case that, unlike the decisions and opinions of the Comptroller General, settlements of the Claims Group have no precedential weight. 4 GAO Policy & Procedures Manual Sec. 14.2. See also, e.g., 43 Comp.Gen. 788, 792 (1964). Furthermore, as was noted in B-249060, although this Office had not had occasion prior to that opinion to rule upon this issue in the context of the MCA, our treatment of the relevant MCA provisions is fully consistent with the treatment previously accorded by this Office and the courts to other similar statutory requirements, including the $2,500 limitation imposed in the Federal Tort Claims Act, 28 U.S.C. Sec. 2672 (1988), and the $100,000 limitation which used to be imposed upon all payments from the Judgment Fund under 31 U.S.C. Sec. 724a (1976). Thus, the views informally provided you with respect to this issue, later confirmed in B-249060, as well as herein, do not represent a departure from prior official GAO policies or practices.

With respect to your request that we support your office's request for supplemental appropriations to cover your MCA obligations, we have no objection in principle to such a request should additional appropriations ultimately prove necessary to resolve this matter. We are not, however, in a position to know whether supplemental appropriations are the only solution to the dilemma facing your agency. (There are, for example, the possibilities of foregoing other expenditures or altering the processing and allowance of claims pursuant to your discretion under the MCA.) In any event, whether you should seek supplemental appropriations is a budgetary/policy decision committed to your department's discretion, the success or failure of which will depend on your ability to justify a need for such funds given the other competing demands for the government's limited budgetary resources.

We trust that this fully responds to your inquiry. Should you have any further questions in this regard, please feel free to contact Mr. Martin- Rolsky, at 202-512-5644.