B-96754, AUGUST 23, 1950, 30 COMP. GEN. 86

B-96754: Aug 23, 1950

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FEDERAL AID GRANT AGREEMENTS - MODIFICATION AFTER COMPLETION WHERE A GRANT AGREEMENT TO FURNISH FEDERAL AID FOR A PUBLIC AIRPORT DEVELOPMENT WAS COMPLETED AND FINAL PAYMENT THEREUNDER WAS MADE PRIOR TO THE AMENDMENT OF SECTION 12 OF THE FEDERAL AIRPORT ACT BY THE ACT OF JULY 25. MODIFICATION OR AMENDMENT OF THE COMPLETED GRANT AGREEMENT TO PROVIDE FOR AN INCREASE IN FEDERAL AID IS NOT AUTHORIZED. 1950: REFERENCE IS MADE TO LETTER OF JULY 11. IF AND WHEN ANY SUCH OFFER IS ACCEPTED IN WRITING BY THE SPONSOR OR SPONSORS TO WHICH IT IS MADE. ANY PORTION OF THE PROJECT COSTS WHICH HAVE BEEN OR MAY BE INCURRED IN CARRYING OUT THAT PROJECT. WAS TENDERED TO THE SPONSOR. WAS ACCEPTED BY THE SPONSOR ON JUNE 17.

B-96754, AUGUST 23, 1950, 30 COMP. GEN. 86

FEDERAL AID GRANT AGREEMENTS - MODIFICATION AFTER COMPLETION WHERE A GRANT AGREEMENT TO FURNISH FEDERAL AID FOR A PUBLIC AIRPORT DEVELOPMENT WAS COMPLETED AND FINAL PAYMENT THEREUNDER WAS MADE PRIOR TO THE AMENDMENT OF SECTION 12 OF THE FEDERAL AIRPORT ACT BY THE ACT OF JULY 25, 1949, TO PROVIDE FOR INCREASING THE GOVERNMENT'S OBLIGATION UNDER GRANT AGREEMENTS BY NOT MORE THAN 10 PERCENT, MODIFICATION OR AMENDMENT OF THE COMPLETED GRANT AGREEMENT TO PROVIDE FOR AN INCREASE IN FEDERAL AID IS NOT AUTHORIZED, THERE BEING NOTHING IN THE TERMS OF THE 1949 ACT REQUIRING, EITHER EXPRESSLY OR BY NECESSARY IMPLICATION, THAT ITS PROVISIONS BE GIVEN RETROACTIVE EFFECT.

COMPTROLLER GENERAL WARREN TO THE SECRETARY OF COMMERCE, AUGUST 3, 1950:

REFERENCE IS MADE TO LETTER OF JULY 11, 1950, FROM THE ACTING SECRETARY OF COMMERCE REQUESTING THE OPINION OF THIS OFFICE AS TO HETHER UNDER THE CIRCUMSTANCES HEREINAFTER DESCRIBED, A GRANT AGREEMENT EXECUTED PURSUANT TO SECTION 12 OF THE FEDERAL AIRPORT ACT, 60 STAT. 177, MAY BE AMENDED TO PROVIDE FOR AN INCREASE IN THE MAXIMUM OBLIGATION OF THE GOVERNMENT OF NOT MORE THAN 10 PERCENT IN VIEW OF THE ENACTMENT ON JULY 25, 1949, OF PUBLIC LAW 183, 81ST CONGRESS, 63 STAT. 478, WHICH AMENDED SAID SECTION 12 BY PROVIDING FOR SUCH AN INCREASE IN THE MAXIMUM OBLIGATION OF THE UNITED STATES.

THE FEDERAL AIRPORT ACT, 49 U.S.C. 1101-1119, PROVIDES, IN GENERAL, FOR FEDERAL AID FOR PUBLIC AIRPORT DEVELOPMENT BY MEANS OF GRANTS OF FEDERAL FUNDS ON A MATCHING BASIS TO CERTAIN QUALIFIED SPONSORS UP TO 50 PERCENT OF THE ALLOWABLE PROJECT COSTS. SECTION 12 OF THE ABOVE ACT PROVIDED AS FOLLOWS:

UPON APPROVING A PROJECT THE ADMINISTRATOR, ON BEHALF OF THE UNITED STATES SHALL TRANSMIT TO THE SPONSOR OR SPONSORS OF THE PROJECT AN OFFER TO PAY THE UNITED STATES SHARE OF THE ALLOWABLE PROJECT COSTS OF SUCH PROJECT. ANY SUCH OFFER SHALL BE MADE UPON SUCH TERMS, AND SUBJECT TO SUCH CONDITIONS, AS THE ADMINISTRATOR MAY DEEM NECESSARY TO MEET THE REQUIREMENTS OF THIS CHAPTER AND THE REGULATIONS PRESCRIBED THEREUNDER. EACH SUCH OFFER SHALL STATE A DEFINITE AMOUNT AS THE MAXIMUM OBLIGATION OF THE UNITED STATES PAYABLE FROM FUNDS APPROPRIATED UNDER AUTHORITY OF THIS CHAPTER, AND SHALL STIPULATE THE OBLIGATIONS TO BE ASSUMED BY THE SPONSOR OR SPONSORS OF THE PROJECT. IF AND WHEN ANY SUCH OFFER IS ACCEPTED IN WRITING BY THE SPONSOR OR SPONSORS TO WHICH IT IS MADE, SUCH OFFER AND ACCEPTANCE SHALL COMPRISE A GRANT AGREEMENT CONSTITUTING AN OBLIGATION OF THE UNITED STATES AND OF THE SPONSOR OR SPONSORS SO ACCEPTING, AND THEREAFTER THE AMOUNT STATED IN THE ACCEPTED OFFER AS THE MAXIMUM OBLIGATION OF THE UNITED STATES UNDER SUCH GRANT AGREEMENT SHALL NOT BE INCREASED. UNLESS AND UNTIL SUCH A GRANT AGREEMENT HAS BEEN EXECUTED WITH RESPECT TO PROJECT, THE UNITED STATES SHALL NOT PAY, NOR BE OBLIGATED TO PAY, ANY PORTION OF THE PROJECT COSTS WHICH HAVE BEEN OR MAY BE INCURRED IN CARRYING OUT THAT PROJECT.

PUBLIC LAW 183, APPROVED JULY 25, 1949, AMENDED SECTION 12 PROVIDING THAT THE OBLIGATION OF THE UNITED STATES UNDER A GRANT AGREEMENT MAY NOT BE INCREASED "BY MORE THAN 10 PERCENTUM.'

THE FACTS OF THE MATTER AS REPORTED BY THE ACTING SECRETARY SHOW THAT A GRANT OFFER FOR THE ACCOMPLISHMENT OF A PROJECT UNDER THE FEDERAL AIRPORT ACT FOR THE DEVELOPMENT OF AUSTIN STRAUBEL FIELD, GREEN BAY, WISCONSIN, WAS TENDERED TO THE SPONSOR, BROWN COUNTY, WISCONSIN, BY THE ADMINISTRATOR OF CIVIL AERONAUTICS ON MAY 22, 1947, AND WAS ACCEPTED BY THE SPONSOR ON JUNE 17, 1947. THE AGREEMENT PROVIDED, AMONG OTHER THINGS, THAT THE UNITED STATES WAS TO PAY 50 PERCENT OF THE ALLOWABLE PROJECT COSTS AS THE UNITED STATES' SHARE OF THE COSTS, AND FURTHER THAT THE MAXIMUM OBLIGATION OF THE UNITED STATES PAYABLE UNDER THE OFFER SHALL BE $522,500. AS THE WORK PROGRESSED, IT BECAME EVIDENT THAT THE MAXIMUM OBLIGATION OF THE UNITED STATES OF $522,500, AS STATED IN THE GRANT AGREEMENT, WOULD BE INSUFFICIENT TO PAY THE UNITED STATES' SHARE OF THE PROJECT COSTS. IT IS REPORTED THAT PRIOR TO SEPTEMBER 29, 1948, THE SPONSOR HAD RECEIVED SIX PROGRESS PAYMENTS UNDER THE AGREEMENT TOTALING $445,125 AND ON THAT DATE THE SPONSOR EXECUTED AN APPLICATION FOR A GRANT PAYMENT, DESIGNATED BY IT AS "7--- FINAL," IN THE AMOUNT OF $121,001.62, BUT SINCE THE PAYMENT OF THIS AMOUNT, TOGETHER WITH THE PRIOR PAYMENTS, WOULD EXCEED THE MAXIMUM OBLIGATION OF THE UNITED STATES UNDER THE AGREEMENT, THE SPONSOR REDUCED SUCH AMOUNT IN HIS APPLICATION BY $43,626.62, LEAVING A TOTAL AMOUNT TO BE PAID THE SPONSOR OF $77,375. THEREAFTER, UPON COMPLETION OF THE FINAL AUDIT OF ALL PROJECT COSTS AND UPON PREPARATION OF THE FINAL PAYMENT VOUCHER, THE BALANCE OF $77,375 WAS PAID TO THE SPONSOR AND A CHECK IN THIS AMOUNT WAS RECEIVED BY IT ON JANUARY 25, 1949. IT IS REPORTED THAT THERE WAS "INADVERTENTLY" ATTACHED TO THE CHECK A STANDARD FORM OF THE DEPARTMENT OF COMMERCE STATING THAT THE CHECK REPRESENTED PROGRESS PAYMENT NO. 7 UNDER THE GRANT AGREEMENT, AND CONTAINING OTHER INFORMATION TO THE EFFECT THAT THE PAYMENT DID NOT CONSTITUTE THE ADMINISTRATOR'S APPROVAL AS TO THE ALLOWABILITY OF ALL PROJECT COSTS, SUCH APPROVAL BEING GIVEN ONLY AFTER REVIEW OF ALL PROJECT COSTS TO BE MADE AT THE COMPLETION OF THE WORK INVOLVED AND PRIOR TO THE FINAL AUDIT. THE WORDING IN THE STANDARD FORM IS STATED BY THE ACTING SECRETARY TO BE ENTIRELY INAPPROPRIATE TO IDENTIFY THE CHECK ATTACHED BECAUSE (A) THE FINAL AUDIT HAD IN FACT BEEN MADE, (B) THE ALLOWABILITY OF ALL PROJECT COSTS HAD BEEN DETERMINED, AND (C) THE AMOUNT OF SUCH SEVENTH PAYMENT WAS FIXED ON THE BASIS OF THE FINAL AUDIT.

THEREAFTER, ON FEBRUARY 2, 1949, THE SPONSOR INQUIRED AS TO THE POSSIBILITY OF OBTAINING FURTHER FEDERAL PARTICIPATION IN THE COSTS ABOVE THE MAXIMUM OBLIGATION OF $522,500 SET OUT IN THE GRANT AGREEMENT, BUT WAS ADVISED THAT THERE WAS NO WAY IN WHICH IT COULD BE ACCOMPLISHED. SEPTEMBER 23, 1949, A FORMAL REQUEST WAS SUBMITTED BY THE SPONSOR TO THE CIVIL AERONAUTICS ADMINISTRATION FOR AN EIGHTH OR ADDITIONAL GRANT PAYMENT UPON THE BASIS THAT THE ENACTMENT OF PUBLIC LAW 183, SUPRA, AUTHORIZED AN INCREASE IN THE MAXIMUM OBLIGATION OF THE UNITED STATES UNDER THE AGREEMENT. THE ADMINISTRATOR OF CIVIL AERONAUTICS ADVISED THE SPONSOR THAT NO AUTHORITY EXISTED FOR AN INCREASE IN THE MAXIMUM OBLIGATION OF THE UNITED STATES IN ANY CASE WHERE FINAL PAYMENT WAS MADE PRIOR TO THE ENACTMENT OF PUBLIC LAW 183.

AT THE REQUEST OF CONGRESSMAN JOHN B. BYRNES, THERE WAS CONSIDERED HERE A BRIEF PRESENTED BY THE SPONSOR, BROWN COUNTY, WISCONSIN, SETTING OUT ITS CONTENTIONS AS TO THE PROPRIETY OF MAKING A FURTHER PAYMENT UNDER THE GRANT AGREEMENT. THE SPONSOR, IN ITS BRIEF, CONTENDS THAT, CONTRARY TO THE OPINION EXPRESSED BY THE ADMINISTRATOR OF CIVIL AERONAUTICS, THE AMENDMENT MADE BY PUBLIC LAW 183 SHOULD BE GIVEN RETROACTIVE EFFECT SO AS TO AUTHORIZE A PAYMENT OF AN ADDITIONAL AMOUNT UNDER THE GRANT AGREEMENT. FURTHER, IT IS CONTENDED THAT THE INCREASE IN THE COST OF THE PROJECT RESULTED FROM CHANGES AND ADDITIONS REQUESTED BY THE CIVIL AERONAUTICS ADMINISTRATION, AND THAT THE SPONSOR HAVING ACCEPTED THE PAYMENT OF $77,375 AS A PARTIAL RATHER THAN A FINAL PAYMENT, THE CONTRACT IS STILL EXECUTORY AND MAY BE AMENDED TO INCLUDE THE ADDITIONAL AMOUNT CLAIMED UNDER THE PROVISIONS OF PUBLIC LAW 183.

AS TO THE CONTENTION OF THE SPONSOR THAT THE PROVISIONS OF PUBLIC LAW 183 ARE RETROACTIVE, THE RULE IS WELL ESTABLISHED THAT AN AMENDATORY STATUTE, LIKE OTHER LEGISLATIVE ACTS, MUST BE REGARDED AS EFFECTIVE FROM THE DATE OF APPROVAL, UNLESS RETROACTIVE CONSTRUCTION IS REQUIRED BY EXPRESS LANGUAGE OR NECESSARY IMPLICATION. SEE 28 COMP. GEN. 200 AND THE CASES CITED THEREIN. THERE IS NOTHING IN THE TERMS OF PUBLIC LAW 183 WHICH EXPRESSLY OR BY NECESSARY IMPLICATION REQUIRES THAT ITS PROVISIONS BE GIVEN RETROACTIVE EFFECT. AS TO THE INTENTION OF THE CONGRESS, DATED JUNE 30, 1950, ON S. 1281, FURTHER AMENDING THE FEDERAL AIRPORT ACT, AS FOLLOWS:

THE COMMITTEE APPRECIATES THE FACT THAT THERE MAY WELL BE SOME SENTIMENT THAT THE AMENDMENT SHOULD BE GIVEN RETROACTIVE EFFECT. IN OTHER WORDS, IT MAY BE THAT SPONSORS THAT HAVE RECEIVED PAYMENT OF THE UNITED STATES SHARE OF LAND ACQUISITION COSTS AT THE 25-PERCENT RATE, PRIOR TO ENACTMENT OF THE BILL, WILL FEEL THAT THEY SHOULD OBTAIN FROM THE UNITED STATES AN ADDITIONAL GRANT PAYMENT THEREFOR IN ORDER THAT THEY MAY BE PLACED IN THE SAME POSITION AS THE SPONSORS OF LAND ACQUISITION PROJECTS COMPLETED SUBSEQUENT TO ENACTMENT. HOWEVER, THE COMMITTEE IS OF THE OPINION THAT THE INCREASE IN THE UNITED STATES SHARE OF LAND COSTS SHOULD BE APPLIED ONLY TO LAND ACQUISITION PROJECTS AS TO WHICH FINAL PAYMENT OF THE UNITED STATES SHARE OF COSTS UNDER THE GRANT AGREEMENT HAS NOT BEEN MADE AT THE TIME OF ENACTMENT OF THE BILL. THIS IS CONSISTENT WITH THE EFFECT GIVEN TO PUBLIC LAW 227 OF THIS CONGRESS AUTHORIZING INCREASES IN THE UNITED STATES SHARE OF THE COST OF INSTALLATION OF HIGH INTENSITY RUNWAY LIGHTING SYSTEMS AND TO PUBLIC LAW 183 OF THIS CONGRESS AUTHORIZING INCREASES IN THE MAXIMUM OBLIGATION OF THE UNITED STATES SHARE OF THE COST OF INSTALLATION OF HIGH INTENSITY RUNWAY LIGHTING SYSTEMS AND TO PUBLIC LAW 183 OF THIS CONGRESS AUTHORIZING INCREASES IN THE MAXIMUM OBLIGATION OF THE UNITED STATES UNDER GRANT AGREEMENTS. (ITALICS SUPPLIED.)

IN THE LIGHT OF THE FOREGOING, THERE WOULD APPEAR TO BE NO QUESTION THAT THE CONGRESS INTENDED THAT THE PROVISIONS OF PUBLIC LAW 183 BE GIVEN PROSPECTIVE EFFECT ONLY.

FURTHER, WITH RESPECT TO THE CONTENTION OF THE SPONSOR THAT THE DRAFT IN THE AMOUNT OF $77,375 RECEIVED ON JANUARY 25, 1949, WAS ACCEPTED AS A PARTIAL PAYMENT RATHER THAN A FINAL PAYMENT, IT APPEARS CLEAR FROM THE FACTS AND CIRCUMSTANCES OUTLINED IN THE LETTER OF JULY 11, 1950, AND ITS ENCLOSURES, THAT NOTWITHSTANDING THE CIRCUMSTANCES THAT THE STANDARD FORM ACCOMPANYING THE CHECK DESCRIBED THE PAYMENT AS " PROGRESS PAYMENT NO. 7," IT WAS INTENDED AS THE FINAL PAYMENT SO FAR AS THE CIVIL AERONAUTICS ADMINISTRATION WAS CONCERNED. WHATEVER THE SPONSOR MAY HAVE ASSUMED AT THE TIME THE PAYMENT OF $77,375 WAS MADE, THE FACT REMAINS THAT THAT AMOUNT CONSTITUTED THE DIFFERENCE BETWEEN THE AMOUNTS ALREADY PAID UNDER THE GRANT AGREEMENT AND THE TOTAL OBLIGATION OF THE UNITED STATES THEREUNDER, AND UPON THE PAYMENT THEREOF THE GOVERNMENT SATISFIED ITS OBLIGATION TO THE SPONSOR. IN SUCH CIRCUMSTANCES, ANY CONTEMPLATED INCREASE IN THE OBLIGATION OF THE GOVERNMENT, OR ANY PURPOSE TO REGARD SAID PAYMENT AS OTHER THAN A FINAL PAYMENT, OBVIOUSLY WOULD HAVE BEEN IN DEROGATION OF THE TERMS OF THE AGREEMENT EXPRESSLY FIXING THE MAXIMUM OBLIGATION OF THE UNITED STATES, AND OF THE PROHIBITION AGAINST SUCH INCREASES CONTAINED IN THE APPLICABLE STATUTE IN EFFECT AT THE TIME (SECTION 12 OF THE FEDERAL AIRPORT ACT QUOTED ABOVE). THE AGREEMENT HAVING BEEN CONTEMPLATED AND FINAL PAYMENT HAVING BEEN MADE, THERE NO LONGER EXISTS A CONTRACT WHICH LEGALLY MAY BE MODIFIED OR AMENDED. COMP. GEN. 332.

ACCORDINGLY, FOR THE REASONS STATED ABOVE, YOU ARE ADVISED THAT THE ADMINISTRATOR OF CIVIL AERONAUTICS IS WITHOUT AUTHORITY TO AMEND THE GRANT AGREEMENT IN QUESTION TO PROVIDE FOR AN INCREASE IN THE MAXIMUM OBLIGATION OF THE UNITED STATES.