B-7071, DECEMBER 2, 1939, 19 COMP. GEN. 544

B-7071: Dec 2, 1939

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THE NAVY DEPARTMENT IS EQUIPPED TO RENDER SERVICE FOR THE OTHER AGENCY WITHIN THE MEANING OF SECTION 601 OF THE ECONOMY ACT OF JUNE 30. WHERE THERE IS AN EXISTING NAVY DEPARTMENT CONTRACT FOR CONSTRUCTION OF NAVAL AVIATION FACILITIES ON ISOLATED ISLANDS WHERE THE CIVIL AERONAUTICS AUTHORITY PROPOSES TO ESTABLISH AIR NAVIGATION FACILITIES. IT WOULD BE GREATLY TO THE ADVANTAGE OF THE UNITED STATES TO HAVE THE AUTHORITY'S RELATIVELY SMALL WORK PERFORMED BY THE NAVY CONTRACTORS IN CONJUNCTION WITH THE LARGE NAVAL WORK AND SUBJECT TO THE GENERAL TERMS OF THE EXISTING CONTRACT LIMITING REIMBURSEMENT TO ACTUAL COST PLUS A FIXED FEE. - THERE IS NO OBJECTION TO A SUPPLEMENTARY CONTRACT BY THE AUTHORITY WITH THE NAVY CONTRACTORS TO ACCOMPLISH THAT PURPOSE.

B-7071, DECEMBER 2, 1939, 19 COMP. GEN. 544

DEPARTMENTS AND ESTABLISHMENTS - SERVICES BETWEEN - ONE DEPARTMENT CONTRACTING FOR ANOTHER, ETC. SECTION 601 OF THE ECONOMY ACT OF JUNE 30, 1932, 47 STAT. 417, DOES NOT AUTHORIZE THE TRANSFER OF FUNDS FROM ONE FEDERAL AGENCY TO ANOTHER FOR THE PURPOSE OF HAVING THE SECOND AGENCY PROCURE THE PERFORMANCE OF WORK FOR THE FIRST AGENCY BY OUTSIDE CONTRACTS, THE AUTHORITY BEING LIMITED TO ORDERS FOR SUCH MATERIALS, SUPPLIES, EQUIPMENT, WORK, OR SERVICES OF ANY KIND THAT THE REQUISITIONED AGENCY "MAY BE IN A POSITION TO SUPPLY OR EQUIPPED TO RENDER.' A CONTRACT RECITING THAT IT HAS BEEN ENTERED INTO UNDER THE ACT OF APRIL 25, 1939, 53 STAT. 590, AUTHORIZING THE SECRETARY OF THE NAVY TO CONTRACT UNDER SPECIFIED CONDITIONS IN CONNECTION WITH ESTABLISHMENT, ETC., OF CERTAIN NAVAL AVIATION FACILITIES, DOES NOT OBLIGATE THE CONTRACTORS TO ACCEPT ORDERS FOR, OR TO PERFORM, ANY ADDITIONAL WORK FOR ANOTHER GOVERNMENT AGENCY UNDER A DIFFERENT ACT AND, THEREFORE, THERE CAN BE NO QUESTION WHETHER, BECAUSE OF THE EXISTENCE OF SUCH CONTRACT, THE NAVY DEPARTMENT IS EQUIPPED TO RENDER SERVICE FOR THE OTHER AGENCY WITHIN THE MEANING OF SECTION 601 OF THE ECONOMY ACT OF JUNE 30, 1932, 47 STAT. 417. WHERE THERE IS AN EXISTING NAVY DEPARTMENT CONTRACT FOR CONSTRUCTION OF NAVAL AVIATION FACILITIES ON ISOLATED ISLANDS WHERE THE CIVIL AERONAUTICS AUTHORITY PROPOSES TO ESTABLISH AIR NAVIGATION FACILITIES, AND IT WOULD BE GREATLY TO THE ADVANTAGE OF THE UNITED STATES TO HAVE THE AUTHORITY'S RELATIVELY SMALL WORK PERFORMED BY THE NAVY CONTRACTORS IN CONJUNCTION WITH THE LARGE NAVAL WORK AND SUBJECT TO THE GENERAL TERMS OF THE EXISTING CONTRACT LIMITING REIMBURSEMENT TO ACTUAL COST PLUS A FIXED FEE--- MAKING COMPETITION BY OTHER CONTRACTORS FOR SUCH SUPPLEMENTARY WORK IMPRACTICABLE --- THERE IS NO OBJECTION TO A SUPPLEMENTARY CONTRACT BY THE AUTHORITY WITH THE NAVY CONTRACTORS TO ACCOMPLISH THAT PURPOSE, WITH SUPERVISION THEREUNDER BY NAVAL PERSONNEL, AND SUCH SUPERVISION WOULD BE A SERVICE WHICH THE NAVY DEPARTMENT WOULD BE EQUIPPED TO RENDER ON A REIMBURSABLE BASIS (INCLUDING SALARIES) WITHIN THE TERMS OF SECTION 601 OF THE ECONOMY ACT OF JUNE 30, 1932, 47 STAT. 417.

COMPTROLLER GENERAL BROWN TO THE ACTING SECRETARY OF THE NAVY, DECEMBER 2, 1939:

CONSIDERATION HAS BEEN GIVEN TO YOUR LETTER OF NOVEMBER 8, 1939, AS FOLLOWS:

THE CIVIL AERONAUTICS AUTHORITY HAS MADE INFORMAL INQUIRY AS TO WHETHER OR NOT THE NAVY DEPARTMENT IS EQUIPPED TO RENDER THE SERVICE THAT WOULD BE INVOLVED IN THE CONSTRUCTION OF STATIONS FOR THAT AGENCY ON PALMYRA ISLAND AND JOHNSTON ISLAND.

THE AUTHORITY FOR THE CONSTRUCTION OF SAID STATIONS IS FOUND IN THE INDEPENDENT OFFICES APPROPRIATION ACT, 1940 ( PUBLIC, NO. 8, 76TH CONGRESS), UNDER THE FOLLOWING PROVISION:

" CIVIL AERONAUTICS AUTHORITY.

"ESTABLISHMENT OF AIR-NAVIGATION FACILITIES: FOR THE ESTABLISHMENT OF ADDITIONAL AIR NAVIGATION FACILITIES, * * * THE CONSTRUCTION OF ADDITIONAL NECESSARY LIGHTING, RADIO, AND OTHER SIGNALING AND COMMUNICATING STRUCTURES AND APPARATUS; * * * $7,000,000, * * *: PROVIDED FURTHER, THAT THIS CONSTRUCTION WORK MAY BE ACCOMPLISHED EITHER BY CONTRACT OR BY PURCHASE AND HIRE: * * "

PURSUANT TO THE AUTHORITY THUS GRANTED THE CIVIL AERONAUTICS AUTHORITY HAS UNDER CONSIDERATION THE ESTABLISHMENT OF FACILITIES ON PALMYRA ISLAND AND JOHNSTON ISLAND. THE CONSTRUCTION WORK PLANNED WOULD INCLUDE (A) QUARTERS FOR FOUR OPERATORS; (B) ONE RADIO TOWER 125 FT. HIGH AND 6 RADIO MASTS ABOUT 40 FT. TO 50 FT. HIGH; (C) POWERHOUSE TO ACCOMMODATE 2 ELECTRIC GENERATORS OF APPROXIMATELY 3-5 KVA AND DISTILLING EQUIPMENT; (D) WATER SUPPLY; (E) SEPTIC TANK AND EFFLUENT LINE; AND (F) FUEL STORAGE TANKS. THE ESTIMATED COST IS APPROXIMATELY $50,000 FOR EACH STATION.

THE CIVIL AERONAUTICS AUTHORITY HAS ASKED WHETHER THE NAVY DEPARTMENT IF IN A POSITION TO FURNISH THE REQUIRED SERVICE WOULD ACCEPT AN ORDER THEREFOR UNDER THE FOLLOWING PROVISIONS OF THE TITLE 31, U.S.C. SEC. 686:

"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 INTERESTS 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, * * *.'

THE SECRETARY OF THE NAVY IS AUTHORIZED BY THE ACT APPROVED APRIL 25, 1939 ( PUBLIC, NO. 43; 76TH CONGRESS), TO ESTABLISH DEVELOP, OR INCREASE NAVAL AVIATION FACILITIES ON THE ISLANDS IN QUESTION. SECTION 4 (A) OF THE ACT READS:

"SEC. 4 (A). TO ENABLE THE SECRETARY OF THE NAVY TO ACCOMPLISH WITHOUT DELAY OR EXCESSIVE COST THOSE PUBLIC WORKS PROJECTS AUTHORIZED BY THIS ACT TO BE LOCATED OUTSIDE THE CONTINENTAL LIMITS OF THE UNITED STATES, HE IS HEREBY AUTHORIZED TO ENTER INTO CONTRACTS UPON A COST PLUS-A-FIXED-FEE BASIS AFTER SUCH NEGOTIATIONS AS HE MAY AUTHORIZE AND APPROVE AND WITHOUT ADVERTISING FOR PROPOSALS WITH REFERENCE THERETO. APPROVAL BY THE PRESIDENT SHALL BE NECESSARY TO THE VALIDITY OF ANY CONTRACT ENTERED INTO UNDER AUTHORITY OF THIS SECTION. THE FIXED FEE TO BE PAID THE CONTRACTOR AS A RESULT OF ANY CONTRACT ENTERED INTO UNDER AUTHORITY OF THIS SECTION SHALL BE DETERMINED AT OR BEFORE THE TIME SUCH CONTRACT IS MADE, AND SHALL BE SET FORTH IN SUCH CONTRACT. SUCH FEE SHALL NOT EXCEED 10 PERCENTUM OF THE ESTIMATED COST OF THE CONTRACT, EXCLUSIVE OF THE FEE, AS DETERMINED BY THE SECRETARY OF THE NAVY. CHANGES IN THE AMOUNT OF THE FEE SHALL BE MADE ONLY UPON MATERIAL CHANGES IN THE SCOPE OF THE WORK CONCERNED AS DETERMINED BY THE SECRETARY OF THE NAVY WHOSE DETERMINATION SHALL BE CONCLUSIVE.'

UNDER THE AUTHORITY ABOVE GRANTED A CONTRACT WAS NEGOTIATED AND EXECUTED AUGUST 5, 1939, AND DULY APPROVED BY THE PRESIDENT ON AUGUST 9, 1939. SAID CONTRACT (NOY-3550), A COPY OF WHICH IS ATTACHED FOR CONVENIENT REFERENCE, PROVIDES THAT THE CONTRACTORS WILL BE REIMBURSED BY THE GOVERNMENT FOR ALL EXPENDITURES (WITH SOME IMMATERIAL EXCEPTIONS) MADE BY THEM ON ACCOUNT OF THE CONTRACT. ALL PURCHASES OF PLANT, EQUIPMENT, AND MATERIALS AND THE EMPLOYMENT OF SERVICES AND LABOR ARE SUBJECT TO THE CONTROL OF THE CONTRACTING OFFICER. ALL REIMBURSEMENTS ARE ON THE BASIS OF ACTUAL NET COST TO THE CONTRACTORS, WITHOUT PROFIT. THE CONTRACTORS ARE THUS AGENTS OF THE GOVERNMENT RATHER THAN CONTRACTORS IN THE ORDINARY MEANING OF THE WORDS. THE MEMBERS OF THEIR ORGANIZATION ARE IN EFFECT GOVERNMENT EMPLOYEES, BEING SUBJECT TO THE CONTROL AND DIRECTION OF THE CONTRACTING OFFICER.

PAYMENTS TO THE CONTRACTORS ARE CHARGEABLE TO THE APPROPRIATION " PUBLIC WORKS, BUREAU OF YARDS AND DOCKS" (7X204).

ARTICLE 3, PAGE 9 OF SAID CONTRACT CONTAINS THE FOLLOWING PROVISION:

"THE GOVERNMENT RESERVES THE RIGHT TO OMIT THE CONSTRUCTION OR ACCOMPLISHMENT OF ANY ONE OR MORE OF THE PROJECTS LISTED ABOVE AND TO INCLUDE THE CONSTRUCTION OR ACCOMPLISHMENT OF ANY ADDITIONAL PROJECT OR PROJECTS AS MAY BE FOUND NECESSARY OR DESIRABLE IN THE INTERESTS OF THE NATIONAL DEFENSE.'

THE PROJECTS INVOLVED IN THE CONSTRUCTION OF THE STATIONS BEING PLANNED BY THE CIVIL AERONAUTICS AUTHORITY FOR THE ISLANDS OF PALMYRA AND JOHNSTON ARE DESIRABLE IN THE INTERESTS OF THE NATIONAL DEFENSE.

OWING TO THE ISOLATED POSITIONS OF THE ISLANDS MENTIONED AND THE ENTIRE ABSENCE OF ANY PRIVATE FACILITIES OR CONTRACTING AGENCIES LOCALLY, A CALL BY THE CIVIL AERONAUTICS AUTHORITY FOR BIDS FOR THE ACCOMPLISHMENT OF THE WORK CONTEMPLATED WOULD RESULT IN COMPARATIVELY HIGH PRICES BECAUSE OF THE LARGE OVERHEAD AND CONTINGENT ITEMS WHICH BIDDERS WOULD INCLUDE IN THEIR PROPOSALS. IT IS ALSO PROBABLE THAT, OWING TO THE DECIDEDLY FAVORABLE BIDDING POSITIONS OF THE CONTRACTORS UNDER THE CONTRACT NOY-3550, NO OTHER PROSPECTIVE BIDDERS WOULD UNDERTAKE TO COMPETE. THOSE CONTRACTORS WOULD THEREFORE PROBABLY HAVE A CLEAR FIELD AND IF THEY BID ON THE WORK WOULD NO DOUBT FEEL IMPELLED TO AMPLY PROTECT THEMSELVES AGAINST CONTINGENCIES BY INCLUDING IN THEIR PROPOSAL A LARGE CONTINGENT ITEM. A REPRESENTATIVE OF THE CONTRACTORS HAS STATED INFORMALLY THAT HE DID NOT THINK THEY WOULD CARE TO UNDERTAKE TO CARRY ON A LUMP-SUM CONTRACT ON THE ISLANDS IN CONNECTION WITH THEIR COST-PLUS CONTRACT WORK.

THERE WILL BE NO REGULAR GOVERNMENT FORCE WHICH COULD BE UTILIZED TO ACCOMPLISH THE CONSTRUCTION OF THE CIVIL AERONAUTICS AUTHORITY STATIONS. THE NAVY DEPARTMENT IS THEREFORE NOT EQUIPPED, SO FAR AS ITS REGULAR FORCES ARE CONCERNED, TO RENDER THE SERVICE THAT WOULD BE INVOLVED IN THE CONSTRUCTION OF THE STATIONS. HOWEVER, THE FORCES AVAILABLE TO THE DEPARTMENT UNDER THE CONTRACT NOY-3550 COULD ACCOMPLISH THE WORK WITHOUT INTERFERENCE WITH THE WORK UNDER THAT CONTRACT. IF, THEREFORE, THE PROJECTS INVOLVED CAN BE INCLUDED IN THE CONTRACT NOY-3550 UNDER THE CONTRACT PROVISIONS ABOVE QUOTED, THEN THE NAVY DEPARTMENT IS EQUIPPED TO RENDER THE SERVICE TO THE CIVIL AERONAUTICS AUTHORITY AND CAN ACCEPT AN ORDER FOR THE WORK.

IF THE PROJECTS ARE INCLUDED IN THE CONTRACT THERE WOULD BE INVOLVED THE EXECUTION OF A SUPPLEMENTAL AGREEMENT WITH THE CONTRACTORS FOR THE ACCOMPLISHMENT OF THE WORK ON THE BASIS OF ACTUAL NET COST IN ACCORDANCE WITH THE TERMS OF THE CONTRACT AND AN ADJUSTMENT OF THE FIXED FEE BY NEGOTIATION. THERE WOULD ALSO BE INVOLVED THE ISSUANCE OF APPROPRIATE ACCOUNTING INSTRUCTIONS UNDER WHICH THE CIVIL AERONAUTICS AUTHORITY WOULD ADVANCE TO THE NAVY DEPARTMENT THE ESTIMATED COST OF THE WORK BY CHECK; THE DEPOSIT OF THE PROCEEDS OF SUCH CHECK TO THE CREDIT OF THE APPROPRIATION " PUBLIC WORKS, BUREAU OF YARDS AND DOCKS" THE SETTING UP OF AN ACCOUNT UNDER THE SAID APPROPRIATION TO CARRY IN SUSPENSE ALL CHARGES ON ACCOUNT OF THE WORK PENDING FINAL SETTLEMENT; THE PREPARATION OF SEPARATE PUBLIC VOUCHERS COVERING CHARGES TO BE LODGED AGAINST SUCH SUSPENSE ACCOUNT; AND FINAL SETTLEMENT UPON COMPLETION OF THE WORK, AS CONTEMPLATED BY SAID SECTION 686 ( TITLE 31; U.S.C. SUPRA). AS AN ALTERNATIVE, THE PROCEEDS OF THE CHECK MIGHT BE DEPOSITED TO THE CREDIT OF THE NAVAL WORKING FUND (7X777).

YOUR DECISION IS REQUESTED AS TO WHETHER THE PROCEDURE OUTLINED ABOVE OR OTHER PROCEDURE ALONG SIMILAR LINES MAY BE LEGALLY ADOPTED IN ORDER TO ENABLE THE NAVY DEPARTMENT TO RENDER TO THE CIVIL AERONAUTICS AUTHORITY THE SERVICE DESIRED.

THE CITED PROVISIONS OF TITLE 31, U.S.C. SEC. 686, DERIVED FROM SECTION 601 OF THE ECONOMY ACT OF JUNE 30, 1932, 47 STAT. 417, DO NOT AUTHORIZE THE TRANSFER OF FUNDS FROM ONE FEDERAL AGENCY TO ANOTHER FOR THE PURPOSE OF HAVING THE SECOND AGENCY PROCURE THE PERFORMANCE OF WORK FOR THE FIRST AGENCY BY OUTSIDE CONTRACTS, THE AUTHORITY BEING LIMITED TO ORDERS FOR SUCH MATERIALS, SUPPLIES, EQUIPMENT, WORK, OR SERVICES OF ANY KIND THAT THE REQUISITIONED AGENCY "MAY BE IN A POSITION TO SUPPLY OR EQUIPPED TO RENDER.' 18 COMP. GEN. 262; A-70486, MARCH 18, 1936. SEE ALSO, ACT OF JUNE 15, 1938, 52 STAT. 683.

YOU APPARENTLY URGE, HOWEVER, THAT THE EXISTING COST-PLUS-A-FIXED FEE NAVY CONTRACT OF AUGUST 5, 1939, IN EFFECT MAKES THE CONTRACTORS THEREUNDER GOVERNMENT AGENTS, AND THAT AS SUCH CONTRACT EXPRESSLY PROVIDES FOR THE INCLUSION OF ANY ADDITIONAL PROJECT OR PROJECTS AS MAY BE FOUND NECESSARY OR DESIRABLE IN THE INTERESTS OF THE NATIONAL DEFENSE (WITH AN EQUITABLE ADJUSTMENT OF THE FIXED FEE), THE CONTRACTORS MAY BE REQUIRED TO PERFORM THE CIVIL AERONAUTICS AUTHORITY CONSTRUCTION WORK IN QUESTION UNDER THE EXISTING NAVY CONTRACT, AND, THEREFORE, THAT THE NAVY DEPARTMENT, IS "EQUIPPED" TO RENDER SUCH SERVICE FOR THE CIVIL AERONAUTICS AUTHORITY WITHIN THE MEANING OF THE SAID STATUTORY PROVISION.

ASSUMING, WITHOUT DECIDING, THAT SUCH CONDITIONS WOULD BRING THE MATTER WITHIN THE SCOPE OF THE STATUTE, IT NEED ONLY BE POINTED OUT THAT THE NAVY CONTRACT OF AUGUST 5, 1939, EXPRESSLY RECITES IN THE FIRST PARAGRAPH THAT "WHEREAS THE SECRETARY OF THE NAVY HAS BEEN AUTHORIZED BY AN ACT OF CONGRESS, APPROVED APRIL 25, 1939 (53 STAT. 590) AND KNOWN AS PUBLIC, NO. 43, SEVENTY-SIXTH CONGRESS, TO ESTABLISH, DEVELOP, OR INCREASE CERTAIN NAVAL AVIATION FACILITIES AND TO ENTER INTO CONTRACTS UPON A COST-PLUS-A- FIXED-FEE BASIS FOR THOSE PUBLIC WORKS PROJECTS AUTHORIZED BY SAID ACT TO BE LOCATED OUTSIDE THE CONTINENTAL LIMITS OF THE UNITED STATES * * * THE PARTIES HERETO * * * DO MUTUALLY AGREE AS FOLLOWS: ," AND, THEREFORE, THAT THE CONTRACT DOES NOT OBLIGATE THE CONTRACTORS TO ACCEPT ORDERS FOR, OR TO PERFORM, ANY ADDITIONAL WORK NOT AUTHORIZED BY THE CITED ACT OF APRIL 25, 1939. THE PROPOSED CIVIL AERONAUTICS AUTHORITY WORK IS NOT AUTHORIZED BY THAT ACT, AND WHILE THE CONTRACTORS, BY A VOLUNTARY SUPPLEMENTAL AGREEMENT, MIGHT BE WILLING TO PERFORM SUCH WORK, THEY ARE NOT BOUND TO DO SO UNDER THE TERMS OF THE EXISTING CONTRACT PERMITTING THE INCLUSION OF ADDITIONAL WORK. IT FOLLOWS THAT THE NAVY DEPARTMENT IS NOT EQUIPPED OR IN A POSITION, BY VIRTUE OF THE EXISTING CONTRACT, TO RENDER THE SERVICE IN QUESTION TO THE CIVIL AERONAUTICS AUTHORITY, WITHIN THE PURVIEW OF SECTION 601 OF THE ECONOMY ACT, SUPRA, BUT WOULD HAVE TO NEGOTIATE A FURTHER CONTRACT TO THAT END. ACCORDINGLY, THE QUESTION STATED IN THE LAST PARAGRAPH OF YOUR LETTER MUST BE AND IS ANSWERED IN THE NEGATIVE.

IT MAY BE SUGGESTED, HOWEVER, IN VIEW OF THE FACTS AND CIRCUMSTANCES RELATED IN YOUR LETTER, AND SHOWN BY THE CONTRACT, RESPECTING THE ISOLATED POSITION OF THE ISLANDS WHERE THE WORK HAS TO BE DONE, AND OF THE DIFFICULTY AND EXPENSE OF TRANSPORTING MEN, MATERIALS, AND EQUIPMENT FOR SUCH WORK, THERE WOULD APPEAR TO BE NO QUESTION BUT WHAT IT WOULD BE MUCH TO THE ADVANTAGE OF THE GOVERNMENT TO HAVE SUCH CIVIL AERONAUTICS AUTHORITY WORK, RELATIVELY SMALL IN AMOUNT, PERFORMED BY THE NAVY CONTRACTORS IN CONJUNCTION WITH THE LARGE NAVAL WORK BEING CARRIED OUT ON SUCH ISLANDS, FOR WHICH CONSTRUCTION FACILITIES WILL BE ALREADY PROVIDED, AND SUBJECT TO THE GENERAL TERMS OF THE EXISTING CONTRACT LIMITING REIMBURSEMENT TO ACTUAL NET COST PLUS A FEE OF NOT TO EXCEED TEN PERCENT, MAKING COMPETITION BY OTHER CONTRACTORS FOR SUCH SUPPLEMENTARY WORK ON A COMPARABLE BASIS OBVIOUSLY IMPRACTICABLE. UNDER THESE CONDITIONS THERE WOULD APPEAR NO NECESSARY OBJECTION TO A SUPPLEMENTAL CONTRACT BY THE CIVIL AERONAUTICS AUTHORITY WITH THE NAVY CONTRACTORS, FOR THE PERFORMANCE OF THE WORK IN QUESTION, INCORPORATING BY REFERENCE THE TERMS OF THE EXISTING NAVY CONTRACT, INCLUDING THOSE LIMITING REIMBURSEMENT, AND PROVIDING FOR SUPERVISION, ETC., BY NAVAL PERSONNEL. B-580, JANUARY 18, 1939. SUCH SUPERVISION AND DIRECTION BY NAVAL PERSONNEL OF THE SUPPLEMENTAL CONTRACT WORK WOULD BE A SERVICE WHICH THE NAVY DEPARTMENT WOULD BE EQUIPPED TO RENDER THE CIVIL AERONAUTICS AUTHORITY, WITHIN THE TERMS OF SECTION 601 OF THE ECONOMY ACT, AND THE COST THEREOF, INCLUDING SALARIES, WOULD BE REIMBURSABLE TO THE NAVY DEPARTMENT UNDER THAT STATUTORY PROVISION, IF SO AGREED IN ADVANCE. 12 COMP. GEN. 442; 13 ID. 234; 15 ID. 334; A-70486, MARCH 18, 1936.