B-57828, JUNE 5, 1946, 25 COMP. GEN. 834

B-57828: Jun 5, 1946

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ADVANCE PAYMENTS - RENTAL OF POST OFFICE BOXES BY GOVERNMENT AGENCIES THE ADVANCE PAYMENT OF POST OFFICE BOX RENTALS ON AN ANNUAL BASIS BY VARIOUS GOVERNMENT AGENCIES TO THE POST OFFICE DEPARTMENT IS NOT IN CONTRAVENTION OF THE PROHIBITION IN SECTION 3648. 1946: I HAVE YOUR LETTER OF MAY 15. IT IS STATED IN YOUR LETTER THAT THE PRESENT PRACTICE IS TO PAY POST OFFICE BOX RENTALS ON A QUARTERLY BASIS AFTER THE SERVICES ARE RENDERED. THE COST OF PROCESSING A SINGLE VOUCHER IS SEVERAL TIMES THE COST OF THE BOX RENT. BASED ON THESE FACTS IT WOULD APPEAR THAT THE SAVINGS TO THE GOVERNMENT AS A WHOLE WOULD BE CONSIDERABLE IF ANNUAL PAYMENTS FOR BOX RENTS WERE POSSIBLE. IT WAS THERE HELD THAT ADVANCE PAYMENT OF POST OFFICE RENTALS WAS PRECLUDED BY SECTION 3648 OF THE REVISED STATUTES.

B-57828, JUNE 5, 1946, 25 COMP. GEN. 834

ADVANCE PAYMENTS - RENTAL OF POST OFFICE BOXES BY GOVERNMENT AGENCIES THE ADVANCE PAYMENT OF POST OFFICE BOX RENTALS ON AN ANNUAL BASIS BY VARIOUS GOVERNMENT AGENCIES TO THE POST OFFICE DEPARTMENT IS NOT IN CONTRAVENTION OF THE PROHIBITION IN SECTION 3648, REVISED STATUTES, AGAINST PAYMENT FOR SERVICES IN ADVANCE OF THEIR RENDITION. CF. 12 COMP. DEC. 67.

COMPTROLLER GENERAL WARREN TO THE DIRECTOR, BUREAU OF THE BUDGET, JUNE 5, 1946:

I HAVE YOUR LETTER OF MAY 15, 1946, REQUESTING MY OPINION AS TO WHETHER ANNUAL PAYMENTS, IN ADVANCE, MAY BE MADE TO THE POST OFFICE DEPARTMENT FOR THE RENTAL OF POST OFFICE BOXES BY VARIOUS AGENCIES OF THE GOVERNMENT.

IT IS STATED IN YOUR LETTER THAT THE PRESENT PRACTICE IS TO PAY POST OFFICE BOX RENTALS ON A QUARTERLY BASIS AFTER THE SERVICES ARE RENDERED, BUT THAT:

THE DEPARTMENT OF AGRICULTURE REPORTS THAT THE PAYMENT OF BOX RENTALS RESULTS IN ABOUT 20,000 VOUCHERS A YEAR IN THAT DEPARTMENT ALONE AND, IN MANY CASES, THE COST OF PROCESSING A SINGLE VOUCHER IS SEVERAL TIMES THE COST OF THE BOX RENT. IT ALSO REPORTS THAT IF ANNUAL PAYMENTS COULD BE MADE FOR BOX RENTS THE NUMBER OF VOUCHERS WOULD BE REDUCED TO ABOUT 5,000 A YEAR AND WOULD RESULT IN AN ESTIMATED ANNUAL SAVING OF $75,000. BASED ON THESE FACTS IT WOULD APPEAR THAT THE SAVINGS TO THE GOVERNMENT AS A WHOLE WOULD BE CONSIDERABLE IF ANNUAL PAYMENTS FOR BOX RENTS WERE POSSIBLE.

THE PRESENT PRACTICE OF MAKING PAYMENTS QUARTERLY, IN ARREARS, FOR POST OFFICE BOX RENTALS APPEARS TO BE BASED UPON A DECISION OF AUGUST 9, 1905, OF THE THEN COMPTROLLER OF THE TREASURY, 12 COMP. DEC. 67. IT WAS THERE HELD THAT ADVANCE PAYMENT OF POST OFFICE RENTALS WAS PRECLUDED BY SECTION 3648 OF THE REVISED STATUTES, 31 U.S.C. 529, WHICH PROHIBITS THE DISBURSEMENT OF PUBLIC FUNDS IN ADVANCE OF THE RENDERING OF SERVICES OR DELIVERY OF MATERIALS FOR WHICH PAYMENT IS MADE; AND FURTHER, THAT SECTION 3901 OF THE REVISED STATUTES, 39 U.S.C. 279, PRECLUDING THE ASSIGNMENT OF A POST OFFICE BOX FOR THE USE OF ANY PERSON UNTIL THE RENT THEREFOR HAS BEEN PAID FOR AT LEAST ONE QUARTER IN ADVANCE, IS NOT APPLICABLE TO THE ASSIGNMENT OF POST OFFICE BOXES TO A GOVERNMENT AGENCY.

IT IS UNDERSTOOD INFORMALLY THAT THE POST OFFICE DEPARTMENT, ALTHOUGH IT IS PRESENTLY ACCEPTING BOX RENTAL PAYMENTS IN ARREARS FOR ONE QUARTER, IS NOT DISPOSED TO ACCEPT PAYMENTS IN ARREARS FOR ANY LONGER PERIOD BECAUSE OF CERTAIN ADMINISTRATIVE DIFFICULTIES WHICH WOULD THEREBY ARISE IN THE SETTLEMENT OF POSTMASTERS' ACCOUNTS, AND THAT THE PRESENT PROPOSAL FOR PAYMENTS ANNUALLY IN ADVANCE IS THE ONLY FEASIBLE ONE WHICH WILL EFFECT THE DESIRED REDUCTION IN THE NUMBER OF PAYMENT VOUCHERS. ACCORDINGLY, IT IS UNNECESSARY AT THIS TIME TO REEXAMINE THE CONCLUSION REACHED BY THE COMPTROLLER OF THE TREASURY IN THE CITED DECISION OF AUGUST 9, 1905, WITH RESPECT TO THE APPLICATION OF SECTION 3901 OF THE REVISED STATUTES TO BOX RENTALS BY THE GOVERNMENT AND THE SOLE POINT INVOLVED IS WHETHER, UNDER THE CIRCUMSTANCES OUTLINED IN YOUR LETTER, ADVANCE PAYMENTS THEREFOR ARE PROHIBITED BY SECTION 3648, REVISED STATUTES.

WHILE SECTION 3648 OF THE REVISED STATUTES CONSISTENTLY HAS BEEN REGARDED AS PROHIBITING ADVANCE PAYMENTS UNDER RENTAL AGREEMENTS, 19 COMP. GEN. 758, 760; 18 COMP. GEN. 839, 841; 23 COMP. 653, THERE IS INVOLVED IN THIS CASE THE DISTINGUISHING FEATURE THAT THE ADVANCE PAYMENTS PROPOSED WOULD NOT BE RECEIVED BY A PRIVATE CLAIMANT, BUT WOULD BE MADE BY ONE GOVERNMENT AGENCY TO ANOTHER. IT HAS BEEN RECOGNIZED THAT THE PRIMARY PURPOSE OF SECTION 3648 IS TO PRECLUDE THE POSSIBILITY OF LOSS TO THE GOVERNMENT IN THE EVENT A CONTRACTOR--- AFTER RECEIPT OF PAYMENT--- SHOULD FAIL TO PERFORM HIS CONTRACT OR REFUSE OR FAIL TO REFUND MONEYS ADVANCED. THUS, UNDER CERTAIN CIRCUMSTANCES, ADVANCE PAYMENTS TO STATES HAVE BEEN AUTHORIZED--- PRIMARILY UPON THE BASIS THAT THE ESTABLISHED RESPONSIBILITY OF THE STATE GOVERNMENT WOULD REDUCE TO A MINIMUM THE POSSIBILITY OF LOSS TO THE UNITED STATES. B-36099, AUGUST 14, 1943; B-35670, JULY 19, 1943. THE CONSIDERATIONS WHICH MOTIVATED THOSE DECISIONS APPLY WITH EVEN GREATER FORCE TO THE CASE AT HAND. FURTHER, THE ACT OF MAY 21, 1920, AS AMENDED, 31 U.S.C. 686, SUPP. V, RELATING TO THE FURNISHING OF MATERIALS, SUPPLIES, EQUIPMENT, WORK OR SERVICES BY ONE FEDERAL AGENCY TO ANOTHER, SPECIFICALLY AUTHORIZES THE MAKING OF ADVANCE PAYMENTS THEREFOR, WHILE THAT ACT IS NOT PRECISELY APPLICABLE TO THIS CASE, IT IS AT LEAST DIRECTLY ANALOGOUS, AND THE FACT THAT THE CONGRESS THERE HAS SANCTIONED THE MAKING OF ADVANCE PAYMENTS BY ONE GOVERNMENT AGENCY TO ANOTHER IN SIMILAR CIRCUMSTANCES SEEMS MORE SIGNIFICANT AT THIS TIME THAN DOES THE ABOVE-MENTIONED DECISION OF 1905. THEREFORE, HAVING REGARD FOR THE SMALL AMOUNTS INVOLVED, THE EXTREMELY REMOTE POSSIBILITY OF ANY LOSS TO THE UNITED STATES, AND THE DEMONSTRATED SAVINGS WHICH WOULD RESULT TO THE GOVERNMENT FROM THE PROCEDURE PROPOSED, I AM OF THE OPINION THAT SECTION 3648 OF THE REVISED STATUTES DOES NOT PROHIBIT THE ADOPTION OF THE PLAN SUGGESTED IN YOUR LETTER. CF. 24 COMP. GEN. 851.

PARAGRAPH 3 OF SECTION 486, POSTAL LAWS AND REGULATIONS OF 1940, PROVIDES THAT NO PORTION OF THE RENTAL SHALL BE RETURNED WHEN A BOX IS SURRENDERED DURING A QUARTER. IT IS ASSUMED THAT THIS PARAGRAPH WILL NOT BE APPLIED TO ANY PERIOD LONGER THAN ONE QUARTER, AND THAT AMOUNTS PAID IN ADVANCE TO COVER RENTAL FOR QUARTERS BEYOND THAT IN WHICH THE BOX MIGHT BE SURRENDERED WOULD BE REFUNDED TO THE DEPARTMENT OR AGENCY CONCERNED.