B-64550, APRIL 8, 1947, 26 COMP. GEN. 760

B-64550: Apr 8, 1947

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APPROPRIATIONS AVAILABLE TO THE REQUISITIONING AGENCIES FOR PURCHASES MADE THROUGH THE BUREAU ARE CHARGEABLE WITH THE AMOUNT OF THE SURCHARGES EVEN THOUGH IT MAY RESULT IN A TOTAL CHARGE AGAINST THE APPLICABLE APPROPRIATIONS OF AN AMOUNT IN EXCESS OF THE STATUTORY MAXIMUM PRICES AUTHORIZED TO BE PAID FOR SUCH PURCHASES. 24 COMP. 1947: I HAVE YOUR LETTER OF MARCH 11. THESE TYPEWRITERS WERE INVOICED TO THE POST OFFICE DEPARTMENT AT A UNIT PRICE OF $70.625. A COPY OF WHICH IS ATTACHED. OF ANY STANDARD TYPING MACHINES * * * AT A PRICE IN EXCESS OF THE FOLLOWING * * * TO WIT: 10 INCHES (CORRESPONDENCE MODELS) $70.00 * * *" THE MACHINES WHICH WERE PURCHASED CORRESPOND WITH THAT DESCRIPTION. $0.375 WAS CHARGED TO THE POST OFFICE DEPARTMENT BY THE PROCUREMENT DIVISION AS A SURCHARGE FOR SERVICES RENDERED.

B-64550, APRIL 8, 1947, 26 COMP. GEN. 760

PASSENGER-CARRYING VEHICLES; TYPEWRITERS - PURCHASE PRICE LIMITATIONS AS INCLUDING BUREAU OF FEDERAL SUPPLY SURCHARGES IN APPLYING THE STATUTORY LIMITATIONS ON PRICES TO BE PAID FOR AUTOMOBILES AND TYPEWRITERS, SURCHARGES ADDED BY THE BUREAU OF FEDERAL SUPPLY, TREASURY DEPARTMENT, TO THE PURCHASE PRICES AS ADMINISTRATIVE EXPENSES INVOLVED IN CONNECTION WITH SUCH PROCUREMENTS MAY NOT BE REGARDED AS PART OF THE PRICES TO BE PAID, AND APPROPRIATIONS AVAILABLE TO THE REQUISITIONING AGENCIES FOR PURCHASES MADE THROUGH THE BUREAU ARE CHARGEABLE WITH THE AMOUNT OF THE SURCHARGES EVEN THOUGH IT MAY RESULT IN A TOTAL CHARGE AGAINST THE APPLICABLE APPROPRIATIONS OF AN AMOUNT IN EXCESS OF THE STATUTORY MAXIMUM PRICES AUTHORIZED TO BE PAID FOR SUCH PURCHASES. 24 COMP. GEN. 94, OVERRULED IN PART.

COMPTROLLER GENERAL WARREN TO THE SECRETARY OF THE TREASURY, APRIL 8, 1947:

I HAVE YOUR LETTER OF MARCH 11, 1947, AS FOLLOWS:

UNDER PURCHASE ORDER C-26019-1FINAL, THE PROCUREMENT DIVISION PURCHASED FOR THE POST OFFICE DEPARTMENT 200 TYPEWRITERS. THESE TYPEWRITERS WERE INVOICED TO THE POST OFFICE DEPARTMENT AT A UNIT PRICE OF $70.625. THE POST OFFICE DEPARTMENT DECLINED, IN A LETTER DATED OCTOBER 11, 1946, A COPY OF WHICH IS ATTACHED, TO MAKE PAYMENT OF THE TOTAL AMOUNT INVOLVED, DIRECTING THE ATTENTION OF THE PROCUREMENT DIVISION TO PUBLIC LAW 293, 78TH CONGRESS (58 STAT. 195 (206/). THE PERTINENT PORTION OF THAT STATUTE PROVIDES THAT " NO PART OF ANY MONEY APPROPRIATED BY THIS OR ANY OTHER ACT SHALL BE USED DURING THE FISCAL YEAR 1945 FOR THE PURCHASE WITHIN THE CONTINENTAL LIMITS OF THE UNITED STATES, OF ANY STANDARD TYPING MACHINES * * * AT A PRICE IN EXCESS OF THE FOLLOWING * * * TO WIT: 10 INCHES (CORRESPONDENCE MODELS) $70.00 * * *" THE MACHINES WHICH WERE PURCHASED CORRESPOND WITH THAT DESCRIPTION.

OF THE $0.625 INVOLVED IN EXCESS OF $70.00, $0.375 WAS CHARGED TO THE POST OFFICE DEPARTMENT BY THE PROCUREMENT DIVISION AS A SURCHARGE FOR SERVICES RENDERED, AND IT IS IN REGARD TO SUCH SURCHARGE THAT YOUR CONSIDERATION IS DESIRED.

THE PRESENT CASE HAS BEEN COVERED TO SOME EXTENT BY YOUR PREVIOUS RULING IN 24 C.G. 94. IN THAT CASE YOU STATED THAT ANY SURCHARGE MADE BY THE PROCUREMENT DIVISION FOR SERVICES RENDERED TO A GOVERNMENT AGENCY IN CONNECTION WITH THE PROCUREMENT OF MOTOR-PROPELLED PASSENGER CARRYING VEHICLES AND RELATED SERVICES WOULD CONSTITUTE A PART OF THE GROSS PRICE TO BE PAID BY THE PURCHASING OFFICE, AND THEREFORE, WOULD BE INCLUDED WITHIN THE PRICE LIMITATION. IT IS OBVIOUS THAT NO DISTINCTION WOULD EXIST BETWEEN THE PURCHASE OF AUTOMOBILES AND OF TYPEWRITERS.

THE STATEMENT FROM YOUR PREVIOUS DECISION REFERRED TO ABOVE WAS NOT AN ESSENTIAL PART OF YOUR HOLDING ON THE FACTS PRESENTED, AND, IN ADDITION, DID NOT INVOLVE A RULING SUBMITTED THROUGH OR REQUESTED BY THIS DEPARTMENT. IT APPEARS THAT A FULLER CONSIDERATION OF ALL THE FACTORS INVOLVED IN SUCH CASES SHOULD LEAD TO THE ADOPTION OF ANOTHER VIEWPOINT WITH RESPECT TO PROCUREMENT DIVISION OR BUREAU OF FEDERAL SUPPLY CONTRACTS.

THE FOLLOWING REASONS APPEAR TO BE SUFFICIENT FOR RECONSIDERATION OF THE SURCHARGE QUESTION CONSIDERED AS AN ADJUNCT OF THE PRINCIPAL POINT OF DISCUSSION IN 24 C.G. 94. THE TYPE OF STATUTE WHICH SETS A LIMITATION AS TO THE MAXIMUM PRICE PAYABLE FOR A PARTICULAR ARTICLE REFERS SPECIFICALLY TO THE PURCHASE PRICE TO BE PAID AND THE SURCHARGE IS NOT A PART OF SUCH PRICE. FURTHERMORE, CONGRESS, IN ESTABLISHING SUCH A MAXIMUM PRICE, MUST HAVE CONTEMPLATED THAT ADMINISTRATIVE EXPENSES WOULD BE INCURRED IN SUCH A PURCHASE, AND SUCH SURCHARGE IS REPRESENTATIVE OF THE ADMINISTRATIVE EXPENSE WHICH WOULD HAVE BEEN INVOLVED HAD THE AGENCY RECEIVING THE ARTICLE PURCHASED SUCH ARTICLE DIRECTLY FROM THE SUPPLIER INSTEAD OF REQUESTING THIS DEPARTMENT TO MAKE THE PURCHASE FOR IT. THEREFORE, THE ADDITION OF THE SURCHARGE DOES NOT ADD TO THE PRICE PAID, BUT IS MERELY A MEANS OF REIMBURSEMENT FOR SUCH ADMINISTRATIVE EXPENSE.

IT IS BELIEVED THAT EXAMINATION OF YOUR PREVIOUS DECISION IN THE LIGHT OF THE ABOVE REASONING SHOULD BE SUFFICIENT FOR A RULING TO THE EFFECT THAT SURCHARGES ADDED BY THE BUREAU OF FEDERAL SUPPLY SHOULD NOT BE HELD TO CONSTITUTE A PART OF THE GROSS PRICE TO BE PAID BY THE PURCHASING OFFICE IN DETERMINING THAT SUCH PRICE DOES NOT EXCEED THE STATUTORY MAXIMUM PRICE.

THE WORD "PRICE," AS GENERALLY UNDERSTOOD, MEANS THE PAYMENT MADE IN CONSIDERATION FOR AN ARTICLE SOLD (33 WORDS AND PHRASES 533) AND, AS USED IN THE STATUTE REFERRED TO IN YOUR LETTER AND IN THE STATUTE CONSIDERED IN 24 COMP. GEN. 94, CLEARLY SIGNIFIES THE AMOUNT TO BE PAID TO A MANUFACTURER OR DEALER FOR THE PURCHASE OF AUTOMOBILES AND TYPEWRITERS. IT DOES NOT INCLUDE AMOUNTS PAID BY ONE AGENCY OF THE GOVERNMENT FOR SERVICES RENDERED TO IT BY ANOTHER GOVERNMENT AGENCY. THE LIMITATIONS FIXED IN THE SAID STATUTES ON THE PRICES TO BE PAID FOR TYPEWRITERS AND AUTOMOBILES NECESSARILY RELATE TO PROCUREMENTS FROM THE MANUFACTURERS AND DEALERS AND NOT TO TRANSACTIONS BETWEEN TWO GOVERNMENT DEPARTMENTS OR AGENCIES. IT FOLLOWS, THEREFORE, THAT SUCH PRICES PROPERLY SHOULD NOT BE REGARDED AS INCLUDING ANY AUTHORIZED ADMINISTRATIVE EXPENSES INVOLVED IN CONNECTION WITH SUCH PROCUREMENTS.

AS CONTENDED IN YOUR LETTER, THE SURCHARGES ADDED BY THE BUREAU OF FEDERAL SUPPLY, TREASURY DEPARTMENT, APPEAR TO BE REPRESENTATIVE OF THE ADMINISTRATIVE EXPENSES WHICH WOULD BE INVOLVED IF THE ARTICLES INVOLVED WERE PURCHASED BY THE REQUISITIONING AGENCIES OF THE GOVERNMENT DIRECTLY FROM THE SUPPLIERS OF THE ARTICLES RATHER THAN THROUGH THE TREASURY DEPARTMENT. ALSO, THE ADDITION OF THE SURCHARGES FOR THE PURPOSE OF REIMBURSING THE GENERAL SUPPLY FUND OF THE TREASURY DEPARTMENT FOR EXPENSES INCURRED IN MAKING PURCHASES FOR THE SEVERAL AGENCIES OF THE GOVERNMENT IS AUTHORIZED BY SECTION 2 OF THE ACT OF FEBRUARY 27, 1929, 45 STAT. 1342, 41 U.S.C. 7B.

ACCORDINGLY, SURCHARGES SUCH AS THOSE HERE IN QUESTION ARE NOT PROPERLY FOR CONSIDERATION AS A PART OF THE PRICES TO BE PAID FOR AUTOMOBILES AND TYPEWRITERS WITHIN THE MEANING OF THE APPLICABLE PRICE LIMITATION STATUTES, AND THE APPROPRIATIONS AVAILABLE TO THE REQUISITIONING AGENCIES FOR PURCHASES MADE THROUGH THE BUREAU OF FEDERAL SUPPLY, TREASURY DEPARTMENT, ARE CHARGEABLE WITH THE AMOUNTS OF THE SURCHARGES EVEN THOUGH THE ADDITION THEREOF TO THE PURCHASE PRICES OF THE ARTICLES MAY RESULT IN A TOTAL CHARGE AGAINST THE APPLICABLE APPROPRIATIONS OF AN AMOUNT IN EXCESS OF THE STATUTORY MAXIMUM PRICES AUTHORIZED TO BE PAID FOR SUCH ARTICLES.

AS STATED IN YOUR ABOVE LETTER, THE OPINION EXPRESSED IN 24 COMP. GEN. 94, IN ANSWER TO QUESTION NO. 2 (E) AS SUBMITTED BY THE SECRETARY OF STATE WAS NOT BASED UPON THE FACTS OF ANY PARTICULAR CASE AND DID NOT CONSTITUTE AN ESSENTIAL PART OF THE CONCLUSION REACHED. HENCE, TO THE EXTENT THAT PART OF THE SAID DECISION MIGHT BE SAID TO CONFLICT WITH THE INSTANT DECISION, IT NO LONGER WILL BE FOLLOWED BY THIS OFFICE.