A-19155, JULY 19, 1927, 7 COMP. GEN. 48

A-19155, JULY 19, 1927, 7 COMP. GEN. 48

CONTRACTS - FISCAL YEAR - DRAYAGE SERVICES FOR POST OFFICES THE CONTINUANCE OF CONTRACTS FOR THE FISCAL YEAR 1927 FOR DRAYAGE SERVICES FOR POST OFFICES DURING THE FISCAL YEAR 1928, WHICH CONTRACTS CONTAIN PROVISIONS TO THE EFFECT THAT THE RATES SPECIFIED THEREIN SHALL BE EFFECTIVE FOR THE FISCAL YEAR 1927 AND THEREAFTER UNTIL CANCELED ON 30 DAYS' NOTICE, IS NOT IN ACCORDANCE WITH THE REQUIREMENTS OF SECTION 3709, REVISED STATUTES, WHICH REQUIRES AND CONTEMPLATES THE YEARLY ADVERTISING FOR PROPOSALS FOR CARRYING OUT THE OBJECTS PROVIDED FOR IN ANNUAL APPROPRIATION ACTS WHEN SUCH OBJECTS ARE NOT TO BE PERFORMED BY THE GOVERNMENT'S OWN INSTRUMENTALITIES.

COMPTROLLER GENERAL MCCARL TO THE POSTMASTER GENERAL, JULY 19, 1927:

I HAVE YOUR LETTER OF JULY 7, 1927, REQUESTING DECISION OF A MATTER THEREIN PRESENTED AS FOLLOWS:

THE POSTAL SERVICE HAS CONTRACTS IN EFFECT AT THE LARGER POST OFFICES FOR THE DRAYING OF POST-OFFICE EQUIPMENT AND SUPPLIES, BETWEEN THE FREIGHT STATIONS AND THE POST OFFICE, WHICH CONTAIN THE SCHEDULE OF RATES TO BE CHARGED WHEN SERVICE IS PERFORMED AND PROVIDE THAT THE RATES ARE TO BE EFFECTIVE DURING THE FISCAL YEAR 1927 AND THEREAFTER UNTIL CANCELED ON THIRTY DAYS' NOTICE IN WRITING BY EITHER PARTY.

THESE CONTRACTS DO NOT OBLIGATE THE GOVERNMENT TO PAY ANY SUM OF MONEY DURING ANY FISCAL YEAR BUT CONSTITUTE A TARIFF OF RATES FOR DRAYAGE SERVICE WHEN ANY SERVICE IS PERFORMED, AND WHEN SERVICE IS PERFORMED THERE IS ALWAYS AN APPROPRIATION AVAILABLE.

A DECISION IS REQUESTED AS TO WHETHER ANY OF THESE CONTRACTS IF CONTINUED IN EFFECT BEYOND THE FISCAL YEAR 1927 WOULD CONSTITUTE A VIOLATION OF REVISED STATUTES, SECTION 3769, (3679), AS AMENDED BY THE ACT OF FEBRUARY 27, 1906, 34 STATUTES 48.

SHOULD YOUR DECISION BE IN THE AFFIRMATIVE IT IS REQUESTED THAT IN INSTANCES WHERE A NEW CONTRACT HAS NOT BEEN AWARDED FOR THE FISCAL YEAR 1928, POSTMASTERS BE ALLOWED CREDIT FOR DRAYAGE PERFORMED IN ACCORDANCE WITH THEIR EXISTING AGREEMENT UNTIL NEW CONTRACTS MAY BE MADE BY POSTMASTERS AND OTHERS CONCERNED.

THE CONTRACTS THAT HAVE BEEN AWARDED FOR THE FISCAL YEAR 1928 SHOW AN AVERAGE INCREASE IN RATES OF FIFTY PERCENT. IT IS BELIEVED THAT IF ALL DRAYAGE RATES ARE CANCELED THE RESULT WILL BE A DECIDED INCREASE IN THE RATES, AND WITH A VIEW OF ECONOMY, IT IS DESIRED, IF IN CONFORMITY WITH THE STATUTE, TO CONTINUE THE EXISTING SCALE OF RATES IN EFFECT UNTIL CANCELED ON THIRTY DAYS' NOTICE IN WRITING BY EITHER PARTY.

THAT PORTION OF SECTION 3679, REVISED STATUTES, AS AMENDED, TO WHICH REFERENCE IS MADE AND WHICH IS HERE MATERIAL, PROHIBITS THE EXECUTIVE DEPARTMENTS AND OTHER GOVERNMENT ESTABLISHMENTS FROM EXPENDING IN ANY ONE FISCAL YEAR ANY SUMS IN EXCESS OF APPROPRIATIONS MADE FOR THAT FISCAL YEAR, OR INVOLVING THE GOVERNMENT IN ANY CONTRACTS OR OTHER OBLIGATIONS FOR THE FUTURE PAYMENT OF MONEY IN EXCESS OF SUCH APPROPRIATIONS, UNLESS SUCH CONTRACTS OR OBLIGATIONS ARE AUTHORIZED BY LAW.

THE CONTINUED MAKING OF PAYMENTS FOR SERVICES RENDERED IN THE DRAYAGE OF POST-OFFICE EQUIPMENT AND SUPPLIES FOR THE CURRENT FISCAL YEAR UNDER CONTRACTS THEREFOR FOR THE FISCAL YEAR 1927 WOULD NOT NECESSARILY BE IN VIOLATION OF SECTION 3679, REVISED STATUTES, AS AMENDED BY SECTION 3 OF THE ACT OF FEBRUARY 27, 1906, 34 STAT. 48, APPROPRIATIONS HAVING PREVIOUSLY BEEN MADE AVAILABLE FROM WHICH SUCH SERVICES COULD LEGALLY BE PAID, BUT THE EXTENSION OF SUCH SERVICES DURING THE FISCAL YEAR 1928, UNDER CONTRACTS ENTERED INTO COVERING THAT CLASS OF SERVICES FOR THE FISCAL YEAR 1927, WOULD CONSTITUTE A FAILURE TO COMPLY WITH THE REQUIREMENTS OF LAW RESPECTING ADVERTISING FOR COMPETITIVE PROPOSALS FOR THE PERFORMANCE OF SUCH SERVICES.

THE PROVISIONS OF SECTION 3709, REVISED STATUTES, CONTEMPLATE AND REQUIRE THE ADVERTISING YEARLY FOR SERVICES IN CONNECTION WITH THE FURTHERING OR CARRYING OUT OF THE OBJECTS PROVIDED FOR IN ANNUAL APPROPRIATION ACTS, WHEN SUCH OBJECTS ARE NOT TO BE PERFORMED BY THE GOVERNMENT'S OWN INSTRUMENTALITIES. THEREFORE THERE IS NO AUTHORITY UNDER WHICH THE DRAYAGE SERVICES IN QUESTION MAY BE CONTINUED DURING THE CURRENT FISCAL YEAR WITHOUT READVERTISING, AS SERVICES OF THAT CHARACTER ARE TO BE SECURED FROM THE LOWEST RESPONSIBLE BIDDERS IN THE DIFFERENT CITIES AFTER PROPER ADVERTISING IN COMPLIANCE WITH THE REQUIREMENTS OF THAT PROVISION OF LAW.

THE PROVISION IN THE CONTRACTS REFERRED TO IN YOUR LETTER RELATIVE TO SERVICE AFTER THE END OF THE FISCAL YEAR 1927 MAY BE REGARDED AS A STANDING OFFER OF THE CONTRACTOR TO CONTINUE TO FURNISH THE SERVICE ON THE SAME TERMS, WHICH OFFER MAY BE ACCEPTED OR NOT AS THE INTERESTS OF THE GOVERNMENT MAY REQUIRE AFTER ADVERTISING.

WITH RESPECT TO YOUR SECOND QUESTION, YOU ARE ADVISED THAT DURING SUCH PERIOD AS REASONABLY MAY BE REQUIRED TO ENTER INTO NEW CONTRACTS FOR DRAYAGE SERVICES FOR THE FISCAL YEAR 1928, SUCH SERVICES MAY CONTINUE TO BE RENDERED UNDER EXISTING AGREEMENTS, AND PAYMENT THEREFOR MADE BY POSTMASTERS AT THE RATES SPECIFIED IN THE CONTRACTS FOR THE FISCAL YEAR 1927.