B-27425 August 7, 1942

B-27425 August 7, 1942

The Honorable, The Secretary of the Interior.

My dear Mr. Secretary:

I have your letter of July 14, 1942, as follows:

"There is enclosed a voucher in favor of the Bitter Foot Irrigation District, Hamilton, Montana, for reimbursement of expenditures made by the District for protection of structures on the Bitter Foot Reclamation Project. Due to the increased precautions against sabotage necessitated by the outbreak of war, the Bureau of Reclamation requested the District to make these expenditures without waiting for execution by the United States of an agreement to reimburse the District. This agreement, a copy of which is enclosed, had, at the time of this request, been executed by the District and contained provisions requiring that the protective measures deemed necessary by the Bureau be put into effect by the District. Although, as a matter of security to the project, the protective measures should be continued, the District was notified on April 24, 1942, that the agreement would not be approved, because it was determined that some doubt exists whether the reimbursement would be authorized under the terms of the appropriation act which provides for the protection of structures 'constructed by the Bureau of Reclamation.'

"The concerned appropriation item, Second Deficiency Appropriation Act, 1942, reads as follows:

"'Protection of project works: For an additional amount, fiscal year 1942, for protection of project works, to be used for the employment of civilian guards, and other necessary expenses, independently or in cooperation with other agencies, as specified under this head in the Interior Department Appropriation Act, 1942, $410,000.'

"The provision of the Interior Department Appropriation Act, 1942, which is referred to by the above act is as follows:

"'Protection of project works: For the purpose of providing protective devices such as floodlights, gates, and barricades for the protection against sabotage and other depredations of any an all dams, powerhouses, and other structures and works whatsoever, heretofore or hereafter constructed by the Bureau of Reclamation, which in the opinion of the Secretary require such protections, $30,000, to be immediately available: Provided, That the Secretary may, in his discretion, enter into agreements with other Federal agencies or with States, countries, irrigation, construction, or reclamation districts of other political subdivisions or water users' associations for the protection of any such works and for reimbursement from this appropriation for amounts expended by them in furnishing protection for any such works.

"The Bitter Foot project differs from other Reclamation projects in that it was created out of an existing irrigation system rather than erected as an original project. The system had been initially constructed by private capital, but due to financial difficulties, it had fallen into disrepair, and the well developed agricultural community was threatened with a serious disaster. The act authorizing the project (Act of July 3, 1930, 46 Stat. 852) provided for the expenditure of funds to be used for liquidating the outstanding indebtedness of the old project and for doing construction, betterment and repair work. The funds expended were to be repaid with 4 percent interest under a contract providing for a lien to the United States on the land and the irrigation system. Subsequently, the act was amended (Act of August 26, 1935, 49 Stat. 799) to provide that the repayment contract should segregate the funds used in construction from the funds used to pay the outstanding indebtedness and should provide that no interest be paid on the funds used for construction. Accordingly, under the repayment contract (dated August 24, 1931, and amended March 17, 1936, Symbol IIr-660) the District is obligated to repay $990,888.86, of which amount $450,000 was expended for the construction of canals, spillways, pipe lines, head gates and other structures. This construction was carried on in accordance with plans prepared by the Bureau of Reclamation and under the supervision of the Bureau. While the District did the work, all expenditures for labor, equipment, material, and supplies were under the supervision of the Bureau, and if at any time the work was not being done in a satisfactory manner, or at too high a cost, the Bureau could discontinue the work. Therefore, in reality, these structures can be said to have been 'constructed' by the Bureau of Reclamation in the same sense that structure s are ordinarily constructed by the Bureau-that is, by private contractors under the supervision of the Bureau and pursuant to specifications written by the Bureau.

"While Lake Como Dam, the specific structure which was guarded, was not constructed by the Bureau of Reclamation,, the safety of the entire project, including the structures constructed under the plans and supervision of the Bureau of Declamation, as well as the ability of the District to repay its obligation to the United States, depends upon the safety of that structure. Therefore, the protective measures taken at the dam are necessary to protect the other structures.

"That Congress intended to provide protection for the project is shown by the fact that it appropriated the entire amount as estimated by the Bureau of the Budget, and the cost of protecting the Bitter Foot project was included in the estimate. (See estimate of cost, itemized by projects, listing the annual cost of protecting subcommittee of the Committee on Appropriations, United States Senate, in connection with the Department of Interior Appropriation Act. 1942)

"Please advise this Department whether, in view of the fact that the project was partially constructed with Government funds under the direction of the Bureau of Reclamation, payment to the District is proper under this voucher."

It is understood from your letter that the expenditures incurred by the Bitter Foot Irrigation District in connection with the protective measures taken by it at the request of the Bureau of Reclamation, and for the reimbursement of which the voucher now in question was submitted, were necessary for the safety of the entire Bitter Foot Reclamation Project including those structures which had been constructed with Government funds under the supervision of the Bureau of Reclamation; and, while, as stated by you, the work in connection with the erection of the structures was done by the Irrigation District, it would appear unreasonable, in view of the manifest purpose of the legislation here involved and the financial interest of the Government in the structures, to assume that the Congress intended that a distinction should be made, so far as the meaning of the phrase "constructed by the Bureau of Reclamation" as used in said legislation is concerned, between such structures and those on which the work was done by employees of the Bureau of Reclamation or by private contractors under the supervision of that Bureau. Also, the fact that the estimates submitted to the Congress in respect to the cost of protecting reclamation projects against sabotage included an item representing the Bitter Root project, coupled with the fact that the Congress appropriated the entire amount estimated as necessary for such purpose, affords a substantial basis for the conclusion that the Congress contemplated that the appropriation here involved should be available for any necessary expense in connection with the protection of said project.

Accordingly, the voucher is returned herewith with the advice that payment thereon is authorized, if correct in other respects.

Respectfully,

Lindsay C. Warren Comptroller General of the United States

Enclosure