B-32701, MARCH 2, 1943, 22 COMP. GEN. 862

B-32701: Mar 2, 1943

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1943: I HAVE YOUR LETTER OF FEBRUARY 24. WHEN THE TRANSACTION IS CONSUMMATED ORALLY (FACE TO FACE) OR BY TELEPHONE. THE FILING OF THE VOUCHER IN THE GENERAL ACCOUNTING OFFICE COVERING TRANSACTIONS CONSUMMATED IN THIS FORM IS ACCEPTED BY THE GENERAL ACCOUNTING OFFICE AS IN COMPLIANCE WITH THE REQUIREMENTS OF SECTION 3743 OF THE REVISED STATUTES. THERE IS ANY EVIDENCE ON THE VOUCHER OF THEIR EXISTENCE. THESE DOCUMENTS ARE TRANSMITTED TO THE GENERAL ACCOUNTING OFFICE. IS ALL THAT IS REQUIRED WHEN THERE IS NO WRITTEN PROPOSAL OR WRITTEN ACCEPTANCE DOCUMENTS. THE TRANSACTION IS ASSIGNED A CONTRACT NUMBER IN THE STANDARD NUMBERING SERIES AND ALL SUPPORTING DOCUMENTS ARE FILED IN THE GENERAL ACCOUNTING OFFICE UNDER THE SYMBOL AND CONTRACT NUMBER ASSIGNED.

B-32701, MARCH 2, 1943, 22 COMP. GEN. 862

CONTRACT FILING REQUIREMENTS - CONTRACTS MADE UNDER FIRST WAR POWERS ACT, 1941, AND EXECUTIVE ORDER NO. 9001 THE NAVY DEPARTMENT'S AUTHORITY UNDER EXECUTIVE ORDER NO. 9001, ISSUED PURSUANT TO THE FIRST WAR POWERS ACT, 1941, TO ENTER INTO CONTRACTS "WITHOUT REGARD TO THE PROVISIONS OF LAW RELATING TO THE MAKING, PERFORMANCE, AMENDMENT, OR MODIFICATION OF CONTRACTS" DOES NOT AUTHORIZE DISREGARD OF THE PROVISIONS OF SECTION 3743, REVISED STATUTES, REQUIRING THE FILING OF CONTRACTS IN THIS OFFICE, AND, THEREFORE, IN THE CASE OF INFORMAL "ONE PAYMENT" CONTRACTS ENTERED INTO UNDER SAID AUTHORITY, THE WRITTEN PROPOSALS, AWARDS, OR WHATEVER DOCUMENTS COMPRISE THE WRITTEN EVIDENCE OF THE TERMS OF THE CONTRACTS, SHOULD BE ATTACHED TO THE RELATED PAYMENT VOUCHERS FOR FILING IN THIS OFFICE ALONG WITH THE VOUCHERS.

COMPTROLLER GENERAL WARREN TO THE SECRETARY OF THE NAVY, MARCH 2, 1943:

I HAVE YOUR LETTER OF FEBRUARY 24, 1943, AS FOLLOWS:

ACTING UNDER THE AUTHORITY OF THE FIRST WAR POWERS ACT, 1941, APPROVED 18 DECEMBER 1941, THE PRESIDENT BY EXECUTIVE ORDER 9001 DATED 27 DECEMBER 1941 AUTHORIZED THE SECRETARY OF THE NAVY TO ENTER INTO CONTRACTS WITHOUT REGARD TO PROVISIONS OF LAW RELATING TO THE PERFORMANCE, AMENDMENT, OR MODIFICATION OF CONTRACTS. THE CONTRACTS AUTHORIZED TO BE MADE INCLUDE AGREEMENTS OF ALL KINDS (WHETHER IN THE FORM OF LETTER OF INTENT, PURCHASE ORDERS OR OTHERWISE) FOR ALL TYPES AND KINDS OF THINGS AND SERVICES NECESSARY, APPROPRIATE AND CONVENIENT FOR THE PROSECUTION OF THE WAR, WITHOUT ANY RESTRICTIONS OF ANY KIND EITHER AS TO TYPE, CHARACTER, LOCATION, OR FORM. UNDER THIS AUTHORITY ADVERTISING, COMPETITIVE BIDDING AND BID, PAYMENT, PERFORMANCE OR OTHER BONDS OR OTHER FORM OF SECURITY NEED NOT BE REQUIRED.

BY VIRTUE OF THE FOREGOING AUTHORITY THERE HAS BEEN ADOPTED AS A POLICY THROUGHOUT THE NAVY DEPARTMENT AND THE NAVAL SERVICE THE PROCUREMENT OF MATERIAL, SERVICES, ETC., OF EVERY CHARACTER WITHOUT A FORMAL CONTRACT SIGNED BY BOTH PARTIES WHEN THE AMOUNT DOES NOT EXCEED $5,000.00. PURCHASES WITHIN THIS LIMITATION MAY BE MADE ORALLY, (FACE TO FACE) BY TELEPHONE, TELEGRAPH OR BY WRITTEN BIDS (COMPETITIVE OR NONCOMPETITIVE) AS MAY BE DEEMED EXPEDIENT IN THE PROSECUTION OF THE WAR.

IN THE CONSUMMATION OF THESE PURCHASES WITHOUT A FORMAL CONTRACT, THERE ARISES A QUESTION AS TO WHAT DATA OR RECORDS MAY BE REQUIRED BY THE GENERAL ACCOUNTING OFFICE TO SUPPORT THE PAYMENT VOUCHERS. WHEN THE TRANSACTION IS CONSUMMATED ORALLY (FACE TO FACE) OR BY TELEPHONE, THERE EXISTS NO WRITTEN PROPOSAL OR FORM OF WRITTEN PROPOSAL OR FORM OF WRITTEN ACCEPTANCE AND CONSEQUENTLY THE INVOICE DULY SIGNED BY THE SELLER CONSTITUTES THE ONLY DOCUMENT AVAILABLE FOR FILING IN THE GENERAL ACCOUNTING OFFICE. THE FILING OF THE VOUCHER IN THE GENERAL ACCOUNTING OFFICE COVERING TRANSACTIONS CONSUMMATED IN THIS FORM IS ACCEPTED BY THE GENERAL ACCOUNTING OFFICE AS IN COMPLIANCE WITH THE REQUIREMENTS OF SECTION 3743 OF THE REVISED STATUTES. HOWEVER, WHEN WRITTEN PROPOSALS AND/OR WRITTEN AWARDS EXIST, AND THERE IS ANY EVIDENCE ON THE VOUCHER OF THEIR EXISTENCE, THESE DOCUMENTS ARE TRANSMITTED TO THE GENERAL ACCOUNTING OFFICE. THE ASSEMBLY AND FILING OF THESE DOCUMENTS IN THE GENERAL ACCOUNTING OFFICE IMPOSES A WORK LOAD ON THE PRESENT OVERBURDENED PURCHASING OFFICERS IN THE NAVY DEPARTMENT AND IN THE FIELD. IN VIEW OF THE FACT THAT A PUBLIC VOUCHER, DULY SIGNED, IS ALL THAT IS REQUIRED WHEN THERE IS NO WRITTEN PROPOSAL OR WRITTEN ACCEPTANCE DOCUMENTS, IT WOULD SEEM THAT THE VOUCHER SIGNED BY THE SELLER AND ACCEPTED BY THE GOVERNMENT EVIDENCING AN AGREEMENT BETWEEN THE PARTIES MAY LIKEWISE BE ACCEPTED AS IN COMPLIANCE WITH THE REQUIREMENTS OF SECTION 3743 OF THE REVISED STATUTES EVEN WHEN A BID OR OTHER DOCUMENT EXISTS.

THE FOREGOING DEALS ONLY WITH TRANSACTIONS COMPLETED WITH ONE PAYMENT. WHEN THE TRANSACTION INVOLVES MORE THAN ONE PAYMENT, THE TRANSACTION IS ASSIGNED A CONTRACT NUMBER IN THE STANDARD NUMBERING SERIES AND ALL SUPPORTING DOCUMENTS ARE FILED IN THE GENERAL ACCOUNTING OFFICE UNDER THE SYMBOL AND CONTRACT NUMBER ASSIGNED.

THE GROWING SHORTAGE OF MANPOWER MAKES IT NECESSARY THAT ADVANTAGE BE TAKEN OF ALL POSSIBLE MEANS OF MINIMIZING THE AMOUNT OF PAPER WORK, BOTH IN THE GOVERNMENT AND WITH THE CONTRACTORS, IN THE CONSUMMATION OF PURCHASE TRANSACTIONS. IT IS EQUALLY IMPORTANT THAT PURCHASE TRANSACTIONS BE CONSUMMATED WITH THE LEAST POSSIBLE DELAY. ANYTHING THAT WILL PROMOTE THESE OBJECTIVES WILL FACILITATE THE PROSECUTION OF THE WAR.

THE FOLLOWING SPECIFIC QUESTION, THEREFORE, IS PRESENTED FOR A DECISION.

WILL A PUBLIC VOUCHER SIGNED BY BOTH THE PAYEE AND THE GOVERNMENT EVIDENCING AN AGREEMENT ON THE PRICE COVERING A NAVY PURCHASE TRANSACTION NOT REQUIRED TO BE CONSUMMATED BY FORMAL CONTRACT SIGNED BY BOTH PARTIES (PRESENT LIMITATIONS NOT TO EXCEED $5,000.00) BE ACCEPTED BY THE GENERAL ACCOUNTING OFFICE AS IN COMPLIANCE WITH SECTION 3743 OF THE REVISED STATUTES WHEN THE TRANSACTION IS COMPLETED WITH ONE PAYMENT?

AN EARLY DECISION WOULD BE APPRECIATED.

AS A BASIS FOR THE QUESTION PRESENTED IN YOUR LETTER IT IS IMPLIED THAT THE ASSEMBLING AND FILING IN THE GENERAL ACCOUNTING OFFICE OF WRITTEN PROPOSALS AND/OR WRITTEN AWARDS IN CONNECTION WITH THE PROCUREMENT OF SERVICES, MATERIALS, AND SUPPLIES UNDER AUTHORITY OF EXECUTIVE ORDER NO. 9001, DATED DECEMBER 27, 1941, ISSUED PURSUANT TO THE FIRST WAR POWERS ACT, 1941, APPROVED DECEMBER 18, 1941, 55 STAT. 838, WOULD OVERBURDEN THE PURCHASING OFFICERS OF THE NAVY DEPARTMENT TO THE EXTENT THAT THE PROGRESS OF THE WAR EFFORT WOULD BE IMPEDED THEREBY.

THIS OFFICE RECOGNIZES, OF COURSE, THAT BY VIRTUE OF THE BROAD PROVISIONS OF EXECUTIVE ORDER NO. 9001, AS SET FORTH IN YOUR LETTER, THE NAVY DEPARTMENT IS AUTHORIZED TO DISREGARD THE ADVERTISING REQUIREMENTS OF SECTION 3709, REVISED STATUTES, IN THE PROCUREMENT OF SERVICES, MATERIALS AND SUPPLIES RELATING TO THE PROSECUTION OF THE WAR, AND, IN VIEW OF THE EMERGENCY CONDITIONS WHICH NOW EXIST, APPRECIATES THE NECESSITY FOR NOT REQUIRING THE EXECUTION OF FORMAL AGREEMENTS COVERING SUCH PURCHASES WHEN EXISTING CIRCUMSTANCES MAKE IT IMPRACTICABLE TO DO SO. HOWEVER, IT IS TO BE NOTED THAT EXECUTIVE ORDER NO. 9001 DOES NOT BY EXPRESS STIPULATION OR BY IMPLICATION PURPORT TO AUTHORIZE DISPENSING WITH THE REQUIREMENTS OF SECTION 3743, REVISED STATUTES, AS AMENDED, WHICH ARE AS FOLLOWS:

ALL CONTRACTS TO BE MADE, BY VIRTUE OF ANY LAW, AND REQUIRING THE ADVANCE OF MONEY, OR IN ANY MANNER CONNECTED WITH THE SETTLEMENT OF PUBLIC ACCOUNTS, SHALL BE DEPOSITED PROMPTLY IN THE GENERAL ACCOUNTING OFFICE: PROVIDED, THAT THIS SECTION SHALL NOT APPLY TO THE EXISTING LAWS IN REGARD TO THE CONTINGENT FUNDS OF CONGRESS. IT IS TO BE NOTED, ALSO, THAT SAID SECTION IS NOT A ,LAW RELATING TO THE MAKING, PERFORMANCE, AMENDMENT, OR MODIFICATION OF CONTRACTS.'

UNQUESTIONABLY THEN, WHILE SECTION 3743, REVISED STATUTES, SUPRA, NECESSARILY MUST BE GIVEN A PRACTICAL CONSTRUCTION CONSISTENT WITH CONDITIONS ARISING AS A RESULT OF THE NATIONAL EMERGENCY, THERE IS NO ALTERNATIVE BUT TO CONCLUDE THAT THE MANDATORY REQUIREMENTS OF THE STATUTE MAY NOT BE DISREGARDED IN TRANSACTIONS SUCH AS REFERRED TO IN YOUR LETTER. THAT IS TO SAY SUCH CONTRACTS AS ARE MADE PURSUANT TO EXECUTIVE ORDER NO. 9001 MUST BE FILED IN THIS OFFICE.

IT IS TO BE ASSUMED, OF COURSE, THAT THE WRITTEN PROPOSALS, AWARDS, OR WHATEVER DOCUMENTS COMPRISE THE WRITTEN EVIDENCE OF THE TERMS OF THE CONTRACTS HERE INVOLVED ARE ASSEMBLED AND CONSULTED BY EMPLOYEES OF THE NAVY DEPARTMENT WHO ARE CHARGED WITH THE OFFICIAL DUTY OF MAKING THE ADMINISTRATIVE DETERMINATION AS TO WHETHER THE AMOUNTS VOUCHERED FOR PAYMENT THEREUNDER ARE CORRECT AND IN ACCORDANCE WITH THE UNDERSTANDING OF THE PARTIES. HENCE, IT WOULD SEEM THAT VERY LITTLE IF ANY, EXTRA WORK WOULD BE INVOLVED AT THAT TIME BY SIMPLY ATTACHING SAID DOCUMENTS TO THE RELATED VOUCHERS. UNDER SUCH A PROCEDURE THE SUBSEQUENT FILING OF THE VOUCHERS IN THIS OFFICE AS REQUIRED BY LAW WILL SATISFY THE REQUIREMENTS OF SECTION 3743, REVISED STATUTES, SUPRA, AND I AM SURE YOU WILL AGREE THAT COMPLIANCE WITH THE SAID STATUTE TO THIS EXTENT WILL NOT IN ANY MANNER JEOPARDIZE OR RETARD THE PROSECUTION OF THE WAR.