B-4249, JUNE 20, 1939, 18 COMP. GEN. 957

B-4249: Jun 20, 1939

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THE ABOVE-QUOTED PROVISION OF LAW IS MORE RESTRICTIVE THAN PROVISIONS OF TITLE III. IN THAT IT PERMITS OF NO DISCRETION IN THE PROCUREMENT OF FOREIGN ARTICLES OF FOOD WHEN DOMESTIC ARTICLES OF FOOD ARE AVAILABLE. THE ABOVE-QUOTED PROVISO ALSO IS NARROWER IN ITS SCOPE THAN THE PROVISIONS OF THE PRIOR ACT. THE PROHIBITION IN THE ABOVE-QUOTED PROVISO IS AGAINST THE USE OF FUNDS APPROPRIATED BY THE NAVAL APPROPRIATION ACT FOR THE FISCAL YEAR 1940. WHILE THE FUNDS APPROPRIATED BY THAT ACT ARE NOT AVAILABLE FOR EXPENDITURE UNTIL AFTER JUNE 30. THERE ARE NOW IN EFFECT AT SOME OUTLYING STATIONS CONTRACTS FOR ARTICLES OF FOOD OF FOREIGN GROWTH OR PRODUCTION ENTERED INTO UNDER THE EXCEPTIONS PROVIDED FOR IN THE ACT OF MARCH 3.

B-4249, JUNE 20, 1939, 18 COMP. GEN. 957

CONTRACTS - STATUTORY FOREIGN FOOD PURCHASE PROHIBITION - APPLICABILITY TO CURRENT CONTRACTS EXTENDING INTO THE NEXT FISCAL YEAR THE PROVISO APPEARING IN THE NAVAL APPROPRIATION ACT FOR THE FISCAL YEAR ENDING JUNE 30, 1940, APPROVED MAY 25, 1939, 53 STAT. 757, PROHIBITING THE USE OF FUNDS APPROPRIATED BY THE SAID ACT FOR THE PROCUREMENT OF ANY ARTICLE OF FOOD NOT GROWN OR PRODUCED IN THE UNITED STATES OR ITS POSSESSIONS, REQUIRES A DISCONTINUANCE OF PURCHASES OF ARTICLES OF FOOD OF FOREIGN GROWTH OR PRODUCTION DURING THE FISCAL YEAR 1940, EXCEPT AS SPECIFIED THEREIN, EVEN THOUGH THE CONTEMPLATED PURCHASES BE UNDER CURRENT FISCAL YEAR CONTRACTS ENTERED INTO PRIOR TO THE SAID ACT AND EXTENDING INTO THE SAID FISCAL YEAR.

ACTING COMPTROLLER GENERAL ELLIOTT TO THE SECRETARY OF THE NAVY, JUNE 20, 1939:

THERE HAS BEEN RECEIVED YOUR LETTER OF JUNE 8, 1939, IN PERTINENT PART, AS FOLLOWS:

THE APPROPRIATION FOR "SUBSISTENCE FOR NAVAL PERSONNEL," AS CONTAINED IN THE NAVAL APPROPRIATION ACT FOR THE FISCAL YEAR ENDING JUNE 30, 1940, APPROVED MAY 25, 1939 (PUBLIC, NO. 90, 76TH CONGRESS), INCLUDES A PROVISO (PAGE 12) WHICH READS AS FOLLOWS:

"PROVIDED, THAT NO PART OF THIS OR ANY OTHER APPROPRIATION CONTAINED IN THIS ACT SHALL BE AVAILABLE FOR THE PROCUREMENT OF ANY ARTICLE OF FOOD NOT GROWN OR PRODUCED IN THE UNITED STATES OR ITS POSSESSIONS, EXCEPT ARTICLES OF FOOD NOT SO GROWN OR PRODUCED OR WHICH CANNOT BE PROCURED IN SUFFICIENT QUANTITIES AS AND WHEN NEEDED, AND EXCEPT PROCUREMENTS BY VESSELS OR ESTABLISHMENTS IN FOREIGN WATERS OR COUNTRIES FOR THE PERSONNEL ATTACHED THERETO.'

THE ABOVE-QUOTED PROVISION OF LAW IS MORE RESTRICTIVE THAN PROVISIONS OF TITLE III, SECTION 3, OF THE ACT APPROVED MARCH 3, 1933 (47 STAT. 1520- 1521; 41 U.S. CODE, SECTION 10B), IN THAT IT PERMITS OF NO DISCRETION IN THE PROCUREMENT OF FOREIGN ARTICLES OF FOOD WHEN DOMESTIC ARTICLES OF FOOD ARE AVAILABLE. THE ABOVE-QUOTED PROVISO ALSO IS NARROWER IN ITS SCOPE THAN THE PROVISIONS OF THE PRIOR ACT, IN THAT IT APPLIES ONLY TO ARTICLES OF "FOOD.'

THE PROHIBITION IN THE ABOVE-QUOTED PROVISO IS AGAINST THE USE OF FUNDS APPROPRIATED BY THE NAVAL APPROPRIATION ACT FOR THE FISCAL YEAR 1940. WHILE THE FUNDS APPROPRIATED BY THAT ACT ARE NOT AVAILABLE FOR EXPENDITURE UNTIL AFTER JUNE 30, 1939, THERE ARE NOW IN EFFECT AT SOME OUTLYING STATIONS CONTRACTS FOR ARTICLES OF FOOD OF FOREIGN GROWTH OR PRODUCTION ENTERED INTO UNDER THE EXCEPTIONS PROVIDED FOR IN THE ACT OF MARCH 3, 1933, SUPRA, WHICH WILL EXTEND INTO THE NEXT FISCAL YEAR.

BECAUSE OF THE DISTANCE FROM ADEQUATE MARKETS, IT IS NECESSARY FOR OUTLYING NAVAL STATIONS TO MAKE CONTRACTS SOME TIME IN ADVANCE OF THE DELIVERY DATES, IN ORDER TO ALLOW THE CONTRACTORS ADEQUATE TIME TO ASSEMBLE A SUFFICIENT STOCK OF PROVISIONS TO SUPPLY NORMAL DEMANDS. THESE CONTRACTS ARE MADE UNDER THE NAVAL SUPPLY ACCOUNT FUND, TO BE CHARGED TO THE ANNUAL APPROPRIATION CURRENT AT THE TIME OF ISSUE.

YOUR DECISION IS REQUESTED AS TO THE EFFECT OF THE ABOVE-QUOTED PROVISO FROM THE NAVAL APPROPRIATION ACT FOR THE FISCAL YEAR 1940 ON CONTRACTS ENTERED INTO PRIOR TO THE APPROVAL OF THAT ACT ON MAY 25, 1939, BUT EXTENDING INTO THE FISCAL YEAR 1940, WHICH PROVIDE FOR THE DELIVERY OF ARTICLES OF FOOD OF FOREIGN GROWTH OR PRODUCTION. SPECIFICALLY, WILL IT BE NECESSARY TO CANCEL ITEMS IN THSE CONTRACTS FOR ARTICLES OF FOOD OF FOREIGN GROWTH OR PRODUCTION WITHOUT REGARD TO THE LIABILITY OF THE GOVERNMENT FOR DAMAGES FOR A BREACH OF THE CONTRACT?

UNDER THE NEW PROVISION OF LAW QUOTED IN YOUR LETTER THE PURCHASE OF FOOD SUPPLIES NOT GROWN OR PRODUCED IN THE UNITED STATES IS PROHIBITED DURING THE FISCAL YEAR 1940 UNLESS BY THE TERM ,OUTLYING STATIONS" AS USED IN YOUR LETTER IT IS MEANT THAT "VESSELS OR ESTABLISHMENTS IN FOREIGN WATERS OR COUNTRIES" ARE INVOLVED.

AS TO THE STATEMENT IN YOUR LETTER WITH RESPECT TO THE LIABILITY OF THE GOVERNMENT FOR DAMAGES FOR A BREACH OF CONTRACT WHERE AN EXISTING CONTRACT IS CANCELED, IT IS ASSUMED THE CONTRACTS COVERING MORE THAN 1 FISCAL YEAR CONTAIN ADEQUATE PROVISIONS TO THE EFFECT THAT THEIR CONTINUANCE IS CONDITIONED UPON FUNDS BEING MADE AVAILABLE BY LAW FOR THE PURPOSE. THE EXTENT THAT THE EXISTING CONTRACTS PROVIDE FOR THE DELIVERY OF ARTICLES OF FOOD OF FOREIGN GROWTH OR PRODUCTION, NOT WITHIN THE EXCEPTIONS MENTIONED IN THE STATUTE, NO APPROPRIATION IS AVAILABLE FOR PERFORMANCE THEREUNDER.