B-4471, JUNE 23, 1939, 18 COMP. GEN. 969

B-4471: Jun 23, 1939

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APPROPRIATIONS - AVAILABILITY PERIOD - INDEPENDENT CONTRACTS INCIDENT TO CONSTRUCTION WHERE APPROPRIATIONS FOR "ESTABLISHING AND EQUIPPING" COAST GUARD AIR STATIONS ARE EXPRESSLY LIMITED BY THE CONGRESS AS TO BE THE PERIOD OF THEIR AVAILABILITY. - ARE INCIDENTAL TO THE CONSTRUCTION. 1 COMP. 1939: I HAVE YOUR LETTER OF JUNE 19. STATION WERE OPENED IN THE PROCUREMENT DIVISION MAY 23. IT IS ANTICIPATED THAT A CONTRACT MAY BE AWARDED IN THE NEAR FUTURE. STATION ARE SCHEDULED FOR OPENING JUNE 20. IT IS. ANTICIPATED THAT THE MAIN CONTRACTS UNDER BOTH OF THESE AUTHORIZATIONS WILL BE OBLIGATED BEFORE JUNE 30. THE AVAILABILITY OF THE FUNDS WILL EXPIRE. THE PERIOD OF CONSTRUCTION OPERATIONS WILL NATURALLY RUN FOR AT LEAST A YEAR BEYOND THAT DATE.

B-4471, JUNE 23, 1939, 18 COMP. GEN. 969

APPROPRIATIONS - AVAILABILITY PERIOD - INDEPENDENT CONTRACTS INCIDENT TO CONSTRUCTION WHERE APPROPRIATIONS FOR "ESTABLISHING AND EQUIPPING" COAST GUARD AIR STATIONS ARE EXPRESSLY LIMITED BY THE CONGRESS AS TO BE THE PERIOD OF THEIR AVAILABILITY, SUCH APPROPRIATIONS, EVEN IF ASSUMED TO BE FOR "THE CONSTRUCTION OF PUBLIC BUILDINGS" WITHIN THE MEANING OF SECTION 1 OF THE ACT OF JUNE 23, 1874, 18 STAT. 275, MAY NOT BE CONSIDERED AVAILABLE FOR ADMINISTRATIVE OBLIGATION FOR WORK UNDER INDEPENDENT CONTRACTS ENTERED INTO SUBSEQUENT TO THE TIME OF AVAILABILITY SO SPECIFIED EVEN THOUGH SUCH CONTRACTS--- E.G., LANDSCAPING THE GROUNDS AFTER COMPLETION OF THE CONSTRUCTION--- ARE INCIDENTAL TO THE CONSTRUCTION. 1 COMP. DEC. 517, INVOLVING PAYMENT OF ADMINISTRATIVE EXPENSES OF SUPERINTENDENCE AND INSPECTION, ETC., AFTER THE PERIOD OF AVAILABILITY AND UNDER A CONTRACT FOR REPAIRING A BRIDGE ENTERED INTO PRIOR TO THE EXPIRATION OF SUCH PERIOD, DISTINGUISHED.

COMPTROLLER GENERAL BROWN TO THE SECRETARY OF THE TREASURY, JUNE 23, 1939:

I HAVE YOUR LETTER OF JUNE 19, 1939, AS FOLLOWS:

THE SECOND DEFICIENCY APPROPRIATION ACT, FISCAL YEAR 1938, APPROVED JUNE 25, 1938 (52 STAT. 1114, 1151), CARRIES THE FOLLOWING ITEMS:

"AIR STATION, ELIZABETH CITY, NORTH CAROLINA: FOR ESTABLISHING AND EQUIPPING A COAST GUARD AIR STATION AT ELIZABETH CITY, NORTH CAROLINA, $540,000, TO REMAIN AVAILABLE UNTIL JUNE 30, 1939. ,AIR STATION, SAN FRANCISCO, CALIFORNIA: FOR ESTABLISHING AND EQUIPPING A COAST GUARD AIR STATION AT THE SAN FRANCISCO AIRPORT ON THE WEST SHORE OF SAN FRANCISCO BAY, TWELVE MILES SOUTH OF SAN FRANCISCO, CALIFORNIA, $600,000, TO REMAIN AVAILABLE UNTIL JUNE 30, 1939.'

PROPOSALS FOR THE CONSTRUCTION OF THE ELIZABETH CITY, NORTH CAROLINA, STATION WERE OPENED IN THE PROCUREMENT DIVISION MAY 23, 1939, AND IT IS ANTICIPATED THAT A CONTRACT MAY BE AWARDED IN THE NEAR FUTURE.

THOSE FOR THE SAN FRANCISCO, CALIFORNIA, STATION ARE SCHEDULED FOR OPENING JUNE 20, 1939. IT IS, THEREFORE, ANTICIPATED THAT THE MAIN CONTRACTS UNDER BOTH OF THESE AUTHORIZATIONS WILL BE OBLIGATED BEFORE JUNE 30, 1939, AT WHICH DATE, BY THE TERMS OF THE LEGISLATION, THE AVAILABILITY OF THE FUNDS WILL EXPIRE, BUT THE PERIOD OF CONSTRUCTION OPERATIONS WILL NATURALLY RUN FOR AT LEAST A YEAR BEYOND THAT DATE.

CONSEQUENTLY, IT WILL BE ESSENTIAL THAT AN APPROPRIATE PROPORTION OF ANY UNOBLIGATED BALANCES REMAINING AFTER THE AWARD OF THE MAIN CONTRACTS CONTINUE AVAILABLE FOR SUCH CONTINGENCIES AS MAY ARISE DURING AND INCIDENT TO THE CONSTRUCTION WORK UNDER SUCH MAIN CONTRACTS. IT IS ASSUMED TO BE A PROPER INTERPRETATION OF THE LAW THAT THIS WILL BE THE CASE.

HOWEVER, THERE ARE CERTAIN MISCELLANEOUS ITEMS ESSENTIAL TO THE PROPER COMPLETION OF THE STATIONS WHICH ARE OF SUCH NATURE AS CUSTOMARILY WOULD BE HANDLED BY INDEPENDENT CONTRACTS AWARDED AT LATER APPROPRIATE DATES. SUCH WORK HAS, ORDINARILY, NO DIRECT CONNECTION WITH THE WORK COVERED BY THE MAIN CONSTRUCTION CONTRACT, AND BY RESORT TO THE PRACTICE OF AWARDING INDEPENDENT CONTRACTS THE PROFIT WHICH WOULD OTHERWISE BE PAID TO A GENERAL CONTRACTOR IS SAVED TO THE GOVERNMENT.

AMONG THESE ITEMS AND AS A CASE IN POINT IS THE LANDSCAPE DEVELOPMENT OF EACH OF THESE PROJECTS.

THIS WORK CAN NATURALLY NOT BE UNDERTAKEN UNTIL THE CONSTRUCTION WORK IS AT LEAST SUBSTANTIALLY COMPLETED AND MAY BE SUCCESSFULLY PERFORMED ONLY IN AN APPROPRIATE SEASON. CONSEQUENTLY, IT WOULD BE OF ADVANTAGE TO POSTPONE THE AWARD OF SUCH CONTRACTS UNTIL THE TIME AT WHICH THE WORK MAY BE PERFORMED IS APPROACHING.

IT IS, THEREFORE, REQUESTED THAT THE DEPARTMENT BE AFFORDED THE BENEFIT OF YOUR DECISION AT THIS TIME AS TO WHETHER OR NOT, BY VIRTUE OF THE AWARD OF THE MAIN CONTRACTS IN THESE CASES PRIOR TO THE EXPIRATION OF THE AVAILABILITY OF FUNDS, IT MAY BE CONSTRUED THAT THE UNOBLIGATED BALANCES WILL REMAIN AVAILABLE FOR OBLIGATION FOR SUCH INDEPENDENT MISCELLANEOUS ITEMS AFTER JUNE 30, 1939.

IN THE ABOVE CONNECTION ATTENTION IS INVITED TO A DECISION BY THE COMPTROLLER OF THE TREASURY UNDER DATE OF JUNE 11, 1895 (1 COMP. DEC. 517) WHICH HAS HERETOFORE BEEN REGARDED AS PRECEDENT IN THE EXPENDITURE OF FUNDS INCIDENT TO AN OBLIGATION INCURRED UNDER AN EXPIRED APPROPRIATION. THE FOLLOWING IS THE SUBSTANCE OF THE ABOVE-MENTIONED DECISION:

"A CONTRACT HAVING BEEN PROPERLY ENTERED INTO DURING THE FISCAL YEAR FOR WHICH AN APPROPRIATION IS AVAILABLE, THE EXPENSES NECESSARILY INCIDENT TO THE INSPECTION AND SUPERINTENDENCE OF THE WORK ARE PROPERLY PAYABLE FROM SAID APPROPRIATION ALTHOUGH SUCH INCIDENTAL EXPENSES ARE NOT INCURRED UNTIL AFTER THE FISCAL YEAR FOR WHICH THE APPROPRIATION IS MADE.'

AS, IN THE EVENT THAT YOUR DECISION IN THIS MATTER IS IN THE NEGATIVE, IT WILL BE NECESSARY TO EXECUTE CONTRACTS FOR ALL OF THIS WORK PRIOR TO JUNE 30, 1939, A RESPONSE AT YOUR EARLIEST CONVENIENCE WILL BE APPRECIATED.

SECTION 3690, REVISED STATUTES, 31 U.S.C. 712, PROVIDES:

EXCEPT AS OTHERWISE PROVIDED BY LAW, ALL BALANCES OF APPROPRIATIONS CONTAINED IN THE ANNUAL APPROPRIATION BILLS AND MADE SPECIFICALLY FOR THE SERVICE OF ANY FISCAL YEAR, AND REMAINING UNEXPENDED AT THE EXPIRATION OF SUCH FISCAL YEAR, SHALL ONLY BE APPLIED TO THE PAYMENT OF EXPENSES PROPERLY INCURRED DURING THAT YEAR, OR TO THE FULFILLMENT OF CONTRACTS PROPERLY MADE WITHIN THAT YEAR; AND BALANCES NOT NEEDED FOR SUCH PURPOSES SHALL BE CARRIED TO THE SURPLUS FUND. * * *

IN THE DECISION OF JUNE 11, 1895, 1 COMP. DEC. 517, CITED IN YOUR LETTER, THE QUESTION WAS WHETHER AN APPROPRIATION FOR THE FISCAL YEAR ENDING JUNE 30, 1895, FOR THE REPAIR OF AQUEDUCT BRIDGE WAS PROPERLY CHARGEABLE WITH THE ADMINISTRATIVE EXPENSES OF SUPERINTENDENCE AND INSPECTION, SERVICE OF A WATCHMAN, PURCHASES OF SMALL SUPPLIES SUCH AS ILLUMINATING OIL FOR LANTERNS, ETC., INCURRED AFTER JUNE 30, 1895, BUT INCIDENTAL TO THE COMPLETION OF A CONTRACT FOR REPAIRING THE BRIDGE ENTERED INTO PRIOR TO JUNE 30, 1895. THE COMPTROLLER OF THE TREASURY SAID:

THESE SERVICES ARE TO BE RENDERED AFTER THE FISCAL YEAR (1895) FOR WHICH THE APPROPRIATION IS MADE. THE QUESTION, THEREFORE, IS, DOES SECTION 3690, REVISED STATUTES (SUPRA), PREVENT THEIR PAYMENT? I THINK THESE EXPENSES CAN BE PROPERLY ALLOWED AND PAID FROM THE APPROPRIATION FOR REPAIR OF THE BRIDGE, ALTHOUGH THE SERVICES WILL BE RENDERED AFTER THE EXPIRATION OF THE FISCAL YEAR FOR WHICH THE APPROPRIATION WAS MADE, AS THEY GAVE OUT OF THE CONTRACT ITSELF, AND ARE INCIDENTAL TO ITS EXECUTION, AND FURTHERMORE ARE RENDERED NECESSARY IN ORDER TO DETERMINE WHETHER OR NOT IT IS PROPERLY PERFORMED.

THIS DECISION WENT NO FURTHER THAN TO HOLD THAT ADMINISTRATIVE EXPENSES INCIDENTAL TO THE COMPLETION OF A CONTRACT ENTERED INTO DURING A PRIOR FISCAL YEAR WERE EXPENSES IN THE "FULFILLMENT OF CONTRACTS PROPERLY MADE WITHIN THAT (THE PRIOR) YEAR" WITHIN THE CONTEMPLATION OF SUCH PROVISION IN SECTION 3690, REVISED STATUTES, AND, HENCE, WERE PROPERLY CHARGEABLE TO THE PRIOR YEAR APPROPRIATION AS AUTHORIZED BY THAT SECTION. SUCH DECISION APPROVED EXPENDITURES INCIDENTAL TO THE COMPLETION OF A PARTICULAR CONTRACT DULY MADE BEFORE THE EXPIRATION OF THE FISCAL YEAR FOR WHICH THE APPROPRIATION WAS AVAILABLE, AND IS NO AUTHORITY FOR ENTERING INTO FURTHER CONTRACTS FOR OTHER WORK AFTER THE EXPIRATION OF THE FISCAL YEAR. THAT IS, THE AUTHORITY IS TO COMPLETE THE CONTRACTS DULY MADE DURING THE PRIOR YEAR, AND NOT TO MAKE FURTHER CONTRACTS FOR WORK, SUPPLIES, OR SERVICES WHICH MIGHT HAVE BEEN CONTRACTED FOR UNDER THE APPROPRIATION, BUT WERE NOT, DURING THE PERIOD OF ITS AVAILABILITY. SEE 1 COMP. GEN. 232; ID. 655; 9 COMP. GEN. 523; 16 COMP. GEN. 37; ID. 843. IN DECISION OF MAY 3, 1937, A-83862, AFFIRMING DECISION OF MARCH 12, 1937, 16 COMP. GEN. 843, IT WAS SAID:

IT IS FUNDAMENTAL THAT, IN THE ABSENCE OF STATUTORY AUTHORITY TO THE CONTRARY, AN APPROPRIATION FOR A PARTICULAR FISCAL YEAR CEASES TO BE AVAILABLE FOR OBLIGATING AFTER JUNE 30 OF THAT FISCAL YEAR.

SECTION 1 OF THE ACT OF JUNE 23, 1874, 18 STAT. 275, 31 U.S.C. 682, PROVIDES THAT---

* * * ALL MONEYS HERETOFORE APPROPRIATED FOR THE CONSTRUCTION OF PUBLIC BUILDINGS * * * OR WHICH MAY HEREAFTER BE APPROPRIATED FOR SUCH BUILDINGS, SHALL REMAIN AVAILABLE UNTIL THE COMPLETION OF THE WORK FOR WHICH THEY ARE, OR MAY BE, APPROPRIATED; AND UPON THE FINAL COMPLETION OF EACH OR ANY OF SAID BUILDINGS, AND THE PAYMENT OF ALL OUTSTANDING LIABILITIES THEREFOR, THE BALANCE OR BALANCES REMAINING SHALL BE IMMEDIATELY COVERED INTO THE TREASURY.

ASSUMING THAT THE AIR STATIONS AT ELIZABETH CITY AND SAN FRANCISCO HERE INVOLVED ARE "PUBLIC BUILDINGS" WITHIN THE PURVIEW OF THIS PROVISION IN THE ACT OF JUNE 23, 1874, THE AVAILABILITY OF THE APPROPRIATIONS THEREFOR MAY NOT BE HELD TO BE EXTENDED BY SUCH ACT, IN VIEW OF THE EXPRESS LIMITATIONS PUT ON SUCH APPROPRIATIONS BY THE CONGRESS IN PROVIDING THAT SUCH APPROPRIATIONS WERE ,TO REMAIN AVAILABLE UNTIL JUNE 30, 1939.' "AVAILABLE" MEANS AVAILABLE FOR ADMINISTRATIVE OBLIGATION; AND HAVING BEEN EXPRESSLY MADE SO AVAILABLE "UNTIL JUNE 30, 1939," THEY MAY NOT BE TREATED AS AVAILABLE FOR ADMINISTRATIVE OBLIGATION; AFTER THAT DATE. SEE DECISION A-25480, ADDRESSED TO THE SECRETARY OF THE TREASURY UNDER DATE OF DECEMBER 18, 1928.