B-52216, OCTOBER 3, 1945, 25 COMP. GEN. 322

B-52216: Oct 3, 1945

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1945: THERE WAS RECEIVED. THAT THREE OF THE JACKS WERE RETURNED TO THE LENDING ACCOUNTABLE OFFICER BUT THAT THE FOURTH JACK WAS LOST WHILE IN POSSESSION OF THE BORROWER. THAT A VALUE OF $50 WAS PLACED UPON THE MISSING JACK BY THE UNITED STATES ENGINEER OFFICE AND DEMAND FOR SAID AMOUNT WAS MADE UPON THE BORROWER. THAT REPLY WAS RECEIVED "THAT IT IS THE WARTIME POLICY THAT ONE GOVERNMENT AGENCY SHOULD NOT PAY OUT OF ITS APPROPRIATION ANOTHER GOVERNMENT AGENCY FOR TORT OSSES. THE ABOVE-QUOTED PROVISION OF LAW WAS CONSIDERED IN DECISION DATED APRIL 4. THIS REIMBURSEMENT IS OF COURSE IN ADDITION TO THE REASONABLE COMPENSATION FIXED FOR THE ACTUAL WORK PERFORMED. IT IS PROVIDED IN THE LAW THAT "SUCH ADJUSTMENT IN THE WAY OF CHARGES AND CREDITS SHALL BE MADE BETWEEN THE PROJECTS AFFECTED AS MAY BE EQUITABLE.'.

B-52216, OCTOBER 3, 1945, 25 COMP. GEN. 322

INTER-AGENCY LOANS OF EQUIPMENT - REIMBURSEMENT FOR LOSSES IN THE ABSENCE OF SPECIFIC STATUTORY AUTHORITY FOR REIMBURSEMENT FOR THE LOSS OF PROPERTY OR EQUIPMENT LOANED BETWEEN BUREAUS, AGENCIES, OR ACTIVITIES OF THE SAME DEPARTMENT, THE LOSS REMAINS UPON THE AGENCY OWNING THE PROPERTY OR EQUIPMENT, AND, THEREFORE, A CIVIL ACTIVITY OF THE WAR DEPARTMENT MAY NOT BE REIMBURSED FOR EQUIPMENT LOANED TO AND LOST BY THE UNITED STATES ARMY.

COMPTROLLER GENERAL WARREN TO THE SECRETARY OF WAR, OCTOBER 3, 1945:

THERE WAS RECEIVED, BY ENDORSEMENT OF AUGUST 28, 1945, FROM THE CHIEF OF ENGINEERS, A LETTER DATED JULY 26, 1945, FROM THE UNITED STATES ENGINEER OFFICE, NEW ORLEANS, LOUISIANA, REQUESTING DECISION WHETHER UNDER THE FACTS AND CIRCUMSTANCES HEREINAFTER NARRATED, THE DISTRICT ENGINEER AT NEW ORLEANS MAY BE REIMBURSED FOR THE LOSS OF AN ITEM OF PROPERTY LOANED TO THE UNITED STATES ARMY, PORT OF EMBARKATION, NEW ORLEANS, LOUISIANA.

THE RECORD DISCLOSES THAT ON OCTOBER 19, 1944, THE UNITED STATES ENGINEER OFFICE, NEW ORLEANS DISTRICT, TRANSFERRED FOR USE FOR AN INDEFINITE PERIOD WITH A FIXED RENTAL TO THE UNITED STATES ARMY, PORT OF EMBARKATION, FOUR 50-TON BALL BEARING JACKS, AS EVIDENCED BY THE COMPLETION OF WAR DEPARTMENT MEMORANDUM RECEIPT; THAT THREE OF THE JACKS WERE RETURNED TO THE LENDING ACCOUNTABLE OFFICER BUT THAT THE FOURTH JACK WAS LOST WHILE IN POSSESSION OF THE BORROWER; THAT A VALUE OF $50 WAS PLACED UPON THE MISSING JACK BY THE UNITED STATES ENGINEER OFFICE AND DEMAND FOR SAID AMOUNT WAS MADE UPON THE BORROWER; THAT REPLY WAS RECEIVED "THAT IT IS THE WARTIME POLICY THAT ONE GOVERNMENT AGENCY SHOULD NOT PAY OUT OF ITS APPROPRIATION ANOTHER GOVERNMENT AGENCY FOR TORT OSSES; " AND THAT THE CHIEF OF ENGINEERS VIEWS THE MATTER AS ONE OF "REIMBURSEMENT SPECIFICALLY REQUIRED BY THE PROVISIONS OF STATUTORY LAW CONTAINED IN THE ACT OF 13 JUNE 1902 (33 U.S.C.A. 631); SECTION 601, OF THE ECONOMY ACT OF 30 JUNE 1932, AS AMENDED (31 U.S.C.A., 686 (A AND B) ); AND 31 U.S.C.A., 628.'

THE ACT OF JUNE 13, 1902, 32 STAT. 373, AS CONTAINED IN 33 U.S.C. 631, PROVIDES:

THE SECRETARY OF WAR MAY DIRECT A TEMPORARY TRANSFER OF ANY PROPERTY EMPLOYED IN THE IMPROVEMENT OF RIVERS AND HARBORS WHENEVER, IN HIS JUDGMENT, SUCH TRANSFER WOULD SECURE EFFICIENT OR ECONOMICAL RESULTS, AND SUCH ADJUSTMENT IN THE WAY OF CHARGES AND CREDITS SHALL BE MADE BETWEEN THE PROJECTS AFFECTED AS MAY BE EQUITABLE. THE ABOVE-QUOTED PROVISION OF LAW WAS CONSIDERED IN DECISION DATED APRIL 4, 1917, OF A FORMER COMPTROLLER OF THE TREASURY--- 81 MS COMP. DEC. 46--- INVOLVING THE QUESTION OF REIMBURSEMENT FOR THE LOSS OF A BARGE LOANED BY THE DISTRICT ENGINEER OFFICER OF THE FOURTH MISSISSIPPI DISTRICT TO THE DISTRICT ENGINEER OFFICER OF THE NEW ORLEANS DISTRICT. LETTER DATED MARCH 16, 1917 OF THE CHIEF OF ENGINEERS, QUOTED IN SAID DECISION, READS, IN PERTINENT PART, AS FOLLOWS:

IT HAS BEEN CONSIDERED THAT THE LAST SENTENCE OF THIS SECTION CONFERRED UPON THE SECRETARY OF WAR AUTHORITY TO TEMPORARILY TRANSFER PLANT FROM ONE DISTRICT TO ANOTHER, AND TO FIX THE TERMS OF TRANSFER AND IT HAS BEEN THE UNIFORM PRACTICE OF DEPARTMENT TO MAKE SUCH TRANSFERS SUBJECT TO THE CONDITION THAT THE BORROWING DISTRICT SHALL ASSUME THE RISK AND REIMBURSE THE LOANING DISTRICT FOR ANY ACCIDENTAL LOSS OR DAMAGE THAT MAY OCCUR TO THE PLANT. THIS REIMBURSEMENT IS OF COURSE IN ADDITION TO THE REASONABLE COMPENSATION FIXED FOR THE ACTUAL WORK PERFORMED. WITH RESPECT TO THAT CONTENTION, THE FORMER COMPTROLLER OF THE TREASURY STATED:

I FIND NOTHING IN THIS PROVISION WHICH RELATES TO DAMAGES OR LOSSES OF PROPERTY BELONGING TO ONE DISTRICT WHILE LOANED TEMPORARILY TO ANOTHER DISTRICT. IT IS PROVIDED IN THE LAW THAT "SUCH ADJUSTMENT IN THE WAY OF CHARGES AND CREDITS SHALL BE MADE BETWEEN THE PROJECTS AFFECTED AS MAY BE EQUITABLE.' THIS WOULD SEEM TO HAVE REFERENCE TO COST OF OPERATION RATHER THAN AN ADJUSTMENT FOR LOSSES.

IN THE ABSENCE OF SPECIFIC PROVISION OF LAW FOR PAYMENT FOR LOSSES, I THINK THE DECISION IN 22 COMP. DEC. 390, IS APPLICABLE, AND SUCH BEING THE CASE PAYMENT TO THE FOURTH MISSISSIPPI RIVER DISTRICT FOR THE LOSS OF THE BARGE IN QUESTION IS NOT AUTHORIZED. * * *

IN THE REFERRED-TO DECISION, 22 COMP. DEC. 390, IT WAS HELD (QUOTING THE SYLLABUS):

THE OWNERSHIP OF PUBLIC PROPERTY IS IN THE GOVERNMENT AND NOT IN A DEPARTMENT OR BRANCH THEREOF HAVING POSSESSION OF THE PROPERTY, AND, ACCORDINGLY, AN EXECUTIVE DEPARTMENT MAY NOT LAWFULLY BE REIMBURSED FOR THE VALUE OF SUCH PROPERTY LOANED TO, AND LOST BY, ANOTHER DEPARTMENT.

IN LINE WITH SAID DECISIONS I HAVE TO ADVISE THAT THE ACT OF JUNE 13, 1902, SUPRA, WHICH PROVIDES FOR THE TEMPORARY TRANSFER OF PROPERTY AND AN EQUITABLE ADJUSTMENT OF CHARGES AND CREDITS BETWEEN PROJECTS, RELATES TO THE TEMPORARY TRANSFER OF PROPERTY WITHIN AND BETWEEN ENGINEERING DISTRICTS AND NOT TO A LOAN OF PROPERTY BY A DISTRICT ENGINEER TO ANOTHER DEPARTMENT, AGENCY OR ACTIVITY, AND THAT SAID ACT IS NO AUTHORITY FOR THE REIMBURSEMENT SOUGHT IN THE PRESENT CASE.

IT IS A RULE OF LONG STANDING THAT WHERE ONE DEPARTMENT LOANS PROPERTY OR EQUIPMENT TO ANOTHER IT IS NOT ENTITLED TO CHARGE FOR ITS USE OR DEPRECIATION, OR TO HAVE LOST PROPERTY REPLACED OR DAMAGED PROPERTY REPAIRED BY THE BORROWING DEPARTMENT UPON ITS RETURN TO THE LOANING ESTABLISHMENT. SEE 10 COMP. GEN. 288, AND CASES CITED THEREIN. THE SAME RULE APPLIES WITH RESPECT TO LOANS OF PROPERTY OR EQUIPMENT BETWEEN BUREAUS, AGENCIES, OR ACTIVITIES OF THE SAME DEPARTMENT. HENCE, IN THE ABSENCE OF SPECIFIC STATUTORY AUTHORITY FOR REIMBURSEMENT FOR THE LOSS OF LOANED PROPERTY OR EQUIPMENT THE LOSS MUST REMAIN WHERE IT FALLS, THAT IS, UPON THE AGENCY OWNING THE PROPERTY OR EQUIPMENT. SEE A-35803, DATED MARCH 25, 1931; A-81991, DATED JANUARY 11, 1937.

MOREOVER, SECTION 628, TITLE 31, U.S.C. (SECTION 3678, REVISED STATUTES), PROVIDES AS FOLLOWS:

EXCEPT AS OTHERWISE PROVIDED BY LAW, SUMS APPROPRIATED FOR THE VARIOUS BRANCHES OF EXPENDITURE IN THE PUBLIC SERVICE SHALL BE APPLIED SOLELY TO THE OBJECTS FOR WHICH THEY ARE RESPECTIVELY MADE, AND FOR NO OTHERS. OBVIOUSLY, THE APPROPRIATIONS MADE FOR THE UNITED STATES ARMY ARE NOT AVAILABLE FOR CIVIL PURPOSES OF THE WAR DEPARTMENT.

THE CHIEF OF ENGINEERS CITES SECTION 686, TITLE 31, U.S.C. AS ADDITIONAL AUTHORITY FOR THE REIMBURSEMENT SOUGHT. SAID SECTION PROVIDES, IN PERTINENT PART, AS FOLLOWS:

(A) ANY EXECUTIVE DEPARTMENT OR INDEPENDENT ESTABLISHMENT OF THE GOVERNMENT, OR ANY BUREAU OR OFFICE THEREOF, IF FUNDS ARE AVAILABLE THEREFOR AND IF IT IS DETERMINED BY THE HEAD OF SUCH EXECUTIVE DEPARTMENT, ESTABLISHMENT, BUREAU, OR OFFICE TO BE IN THE INTEREST OF THE GOVERNMENT SO TO DO, MAY PLACE ORDERS WITH ANY OTHER SUCH DEPARTMENT, ESTABLISHMENT, BUREAU, OR OFFICE FOR MATERIALS, SUPPLIES, EQUIPMENT, WORK, OR SERVICES, OF ANY KIND THAT SUCH REQUISITIONED FEDERAL AGENCY MAY BE IN A POSITION TO SUPPLY OR EQUIPPED TO RENDER, AND SHALL PAY PROMPTLY BY CHECK TO SUCH FEDERAL AGENCY AS MAY BE REQUISITIONED, UPON ITS WRITTEN REQUEST, EITHER IN ADVANCE OR UPON THE FURNISHING OR PERFORMANCE THEREOF, ALL OR PART OF THE ESTIMATED OR ACTUAL COST THEREOF AS DETERMINED BY SUCH DEPARTMENT, ESTABLISHMENT, BUREAU, OR OFFICE AS MAY BE REQUISITIONED; BUT PROPER ADJUSTMENTS ON THE BASIS OF THE ACTUAL COST OF THE MATERIALS, SUPPLIES, OR EQUIPMENT FURNISHED, OR WORK OR SERVICES PERFORMED, PAID FOR IN ADVANCE, SHALL BE MADE AS AMY BE AGREED UPON BY THE DEPARTMENTS, ESTABLISHMENTS, BUREAUS, OR OFFICES CONCERNED: PROVIDED, HOWEVER, THAT IF SUCH WORK OR SERVICES CAN BE AS CONVENIENTLY OR MORE CHEAPLY PERFORMED BY PRIVATE AGENCIES SUCH WORK SHALL BE LET BY COMPETITIVE BIDS TO SUCH PRIVATE AGENCIES. BILLS RENDERED, OR REQUESTS FOR ADVANCE PAYMENTS MADE, PURSUANT TO ANY SUCH ORDER, SHALL NOT BE SUBJECT TO AUDIT OR CERTIFICATION IN ADVANCE OF PAYMENT.

UNDER THAT PROVISION OF LAW ANY EXECUTIVE DEPARTMENT OR INDEPENDENT ESTABLISHMENT OF THE GOVERNMENT, OR ANY BUREAU OR OFFICE THEREOF MAY REQUISITION SUPPLIES OR EQUIPMENT FROM ANY OTHER SUCH DEPARTMENT, ESTABLISHMENT, BUREAU OR OFFICE UPON PAYMENT IN ADVANCE OR UPON THE FURNISHING OF THE SUPPLIES OR EQUIPMENT AS AGREED UPON. WHILE THE UNITED STATES ARMY, PORT OF EMBARKATION, NEW ORLEANS, LOUISIANA, WELL MIGHT HAVE ENTERED INTO AN AGREEMENT UNDER SECTION 686, SUPRA, WITH THE DISTRICT ENGINEER AT NEW ORLEANS FOR THE USE OF THE EQUIPMENT INVOLVED ON AN ACTUAL COST BASIS OR COULD HAVE ENTERED INTO AN AGREEMENT FOR THE PURCHASE OF THE EQUIPMENT, NEITHER KIND OF AGREEMENT WAS IN FACT ENTERED INTO IN THIS CASE. WHAT IS SOUGHT NOW BY THE DISTRICT ENGINEER IS NOT REIMBURSEMENT FOR COSTS WHILE THE EQUIPMENT WAS USED BY THE BORROWER, BUT RATHER, THE VALUE OF THE EQUIPMENT AS IF IT HAD BEEN SOLD TO THE UNITED STATES ARMY. AS INDICATED ABOVE, THE TRANSACTION INVOLVED, AT ITS INCEPTION, WAS NOT A SALE OF THE EQUIPMENT BUT MERELY A LOAN OF THE USE OF PROPERTY BY ONE ACTIVITY OF A DEPARTMENT TO ANOTHER. AFTER THE LOSS OF THE EQUIPMENT BY THE BORROWING AGENCY THERE EXISTED NO PROPER SUBJECT OF A PURCHASE OR SALE THEREOF. OBVIOUSLY, NO APPROPRIATION IS AVAILABLE FOR THE PURCHASE OF THE NONEXISTENT ARTICLE UNDER SUCH CIRCUMSTANCES.

CONSEQUENTLY, THERE IS FOR APPLICATION IN THE INSTANT CASE THE RULE STATED IN 10 COMP. GEN. 288, SUPRA, AND, ACCORDINGLY, IT MUST BE HELD THAT THE APPROPRIATION MADE FOR CARRYING OUT THE WORK FOR THE PROSECUTION OF WHICH THE EQUIPMENT HERE INVOLVED WAS LOANED IS NOT AVAILABLE FOR PAYMENT OF THE VALUE OF THE EQUIPMENT WHICH WAS LOST AND THAT THE REIMBURSEMENT HERE SOUGHT IS NOT AUTHORIZED.