B-207014 L/M, OCT 25, 1982, OFFICE OF GENERAL COUNSEL

B-207014 L/M, OCT 25, 1982, OFFICE OF GENERAL COUNSEL

DIGEST: INDIVIDUAL IS ADVISED ABOUT THE DUAL COMPENSATION RESTRICTIONS THAT APPLY TO MILITARY PERSONNEL AND CIVILIAN GOVERNMENT EMPLOYEES; THE ELIGIBILITY OF UNINCORPORATED, NON-PROFIT, PRIVATE ASSOCIATIONS CONTROLLED SUBSTANTIALLY BY GOVERNMENT PERSONNEL TO ENTER INTO CONTRACTS WITH THE GOVERNMENT; BID PROTEST PROCEDURES; AND THE GAO FRAUD TASK FORCE.

MS. ELLEN LIVELY STEELE, MANAGING PARTNER, AVVA III:

WE REFER TO YOUR CORRESPONDENCE DATED MARCH 30 AND MAY 22, 1982, CONCERNING THE AWARD OF CONTRACTS BY MILITARY INSTALLATIONS TO LOCAL ASSOCIATIONS FOR THE SERVICES OF SPORTS OFFICIALS. YOU STATE THAT THESE ASSOCIATIONS ARE NON-PROFIT ORGANIZATIONS WITH MEMBERSHIPS WHICH CONSIST PRIMARILY OF MILITARY PERSONNEL AND DEPARTMENT OF DEFENSE CIVILIAN EMPLOYEES. THE ASSOCIATIONS ARE PAID FROM APPROPRIATED FUNDS UNDER THE CONTRACTS, AND THEY USE THE PAYMENTS TO EMPLOY THEIR MEMBERS TO OFFICIATE AT SPORTS EVENTS HELD AT THE MILITARY INSTALLATIONS. YOU QUESTION THE PROPRIETY OF THIS.

ALTHOUGH A DECISION OF THE COMPTROLLER GENERAL IS NOT BEING RENDERED ON THE BASIS OF YOUR LETTERS, THE FOLLOWING INFORMATION MAY BE OF USE TO YOU.

YOU FIRST ASK WHETHER IT IS PROPER, UNDER THE RULES RESTRICTING THE DUAL EMPLOYMENT OF AN INDIVIDUAL BY THE GOVERNMENT, FOR ACTIVE DUTY MILITARY PERSONNEL AND DEPARTMENT OF DEFENSE CIVILIAN EMPLOYEES TO BE PAID FOR OFFICIATING AT SPORTS EVENTS IN THE DESCRIBED CIRCUMSTANCES.

WITH CERTAIN EXCEPTIONS FEDERAL CIVILIAN EMPLOYEES ARE PROHIBITED BY STATUTE FROM RECEIVING PAY FROM MORE THAN ONE GOVERNMENT POSITION IF MORE THAN AN AGGREGATE OF 40 HOURS OF WORK IN ONE CALENDAR WEEK IS INVOLVED. SEE 5 U.S.C. 5533(A). IN ADDITION, THE COMPTROLLER GENERAL HAS LONG FOLLOWED THE RULE, ORIGINALLY ESTABLISHED BY THE UNITED STATES SUPREME COURT, THAT IN THE ABSENCE OF SPECIFIC STATUTORY AUTHORITY ACTIVE DUTY MILITARY PERSONNEL ARE PRECLUDED FROM UNDERTAKING CONCURRENT FEDERAL CIVILIAN EMPLOYMENT. SEE 46 COMP.GEN. 400 (1966) AND DECISIONS THERE CITED. GENERALLY, HOWEVER, AN ESSENTIAL ELEMENT IN ESTABLISHING THE APPLICABILITY OF THESE DUAL EMPLOYMENT RULES IS THAT THE ARRANGEMENTS IN QUESTION GIVE RISE TO AN EMPLOYMENT RELATIONSHIP WITH THE GOVERNMENT. SEE, E.G., 45 COMP.GEN. 757 (1966). HENCE, THE COMPTROLLER GENERAL EXPRESSED THE VIEW IN ONE DECISION THAT THE DUAL EMPLOYMENT RULES DID NOT APPLY WHEN THE EMPLOYMENT IN QUESTION WAS WITH A PRIVATE UNINCORPORATED ASSOCIATION, NOTWITHSTANDING THAT THE ASSOCIATION'S MEMBERSHIP WAS COMPRISED PRIMARILY OF MILITARY PERSONNEL, WHERE MEMBERSHIP IN THE ASSOCIATION WAS PURELY VOLUNTARY, THE ASSOCIATION WAS NOT REQUIRED BY LAW OR REGULATION TO FUNCTION UNDER GOVERNMENT JURISDICTION, AND THE ASSOCIATION WAS NOT SUPERVISED BY MILITARY PERSONNEL OR CIVILIAN GOVERNMENT EMPLOYEES AS A PART OF THEIR OFFICIAL DUTIES. 45 COMP.GEN. 289 (1965). IT THUS APPEARS THAT MEMBERSHIP IN, AND EMPLOYMENT WITH, THE PRIVATE ASSOCIATIONS YOU HAVE BROUGHT INTO QUESTION WOULD NOT NECESSARILY BE SUBJECT TO THE DUAL EMPLOYMENT RESTRICTIONS DESCRIBED ABOVE.

ANOTHER RESTRICTION IMPOSED BY STATUTE, 5 U.S.C. 5536, PROHIBITS MILITARY PERSONNEL AND CIVILIAN GOVERNMENT EMPLOYEES FROM RECEIVING EXTRA PAY FOR EXTRA SERVICES. THE COMPTROLLER GENERAL HAS CONSTRUED THAT STATUTORY PROVISION AS CONSTITUTING A LIMITED PROHIBITION AGAINST INDIVIDUALS RECEIVING ADDITIONAL PAY FROM APPROPRIATED FUNDS FOR THE PERFORMANCE OF SERVICES THAT COULD ORDINARILY BE REQUIRED OF THEM IN THE COURSE OF THEIR NORMAL OFFICIAL DUTIES. SEE 41 COMP.GEN. 741 (1962), CONCERNING THE APPLICATION OF THE ANTECEDENT PROVISIONS OF 5 U.S.C. 70 (1958 ED.). THUS, IT APPEARS THAT THIS PROVISION WOULD NOT NECESSARILY OPERATE TO GENERALLY PROSCRIBE THE EMPLOYMENT ARRANGEMENTS IN QUESTION.

YOU ALSO ASK IF IT IS PERMISSIBLE FOR NON-PROFIT ASSOCIATIONS WITH MEMBERSHIPS COMPRISED PRIMARILY OF MILITARY PERSONNEL AND GOVERNMENT EMPLOYEES TO BID FOR AND BE AWARED GOVERNMENT CONTRACTS TO PROVIDE SPORTS OFFICIATING SERVICES AT MILITARY INSTALLATIONS.

WE ARE NOT AWARE OF ANY STATUTE OR REGULATION THAT GENERALLY BARS NON- PROFIT ASSOCIATIONS FROM BIDDING FOR AND RECEIVING AWARDS OF GOVERNMENT CONTRACTS. IN ADDITION, CONTRACTS BETWEEN THE GOVERNMENT AND ITS EMPLOYEES ARE NOT EXPRESSLY PROHIBITED BY STATUTE EXCEPT WHERE THE INDIVIDUAL ACTS FOR BOTH THE GOVERNMENT AND THE CONTRACTOR IN A PARTICULAR TRANSACTION, OR WHERE THE SERVICE TO BE RENDERED COULD ALSO BE REQUIRED IN THE COURSE OF THE INDIVIDUAL'S OFFICIAL DUTIES. SEE VALIANT SECURITY AGENCY, 61 COMP.GEN. 65 (1981), COPY ENCLOSED; HOWEVER, THE COMPTROLLER GENERAL HAS EXPRESSED THE VIEW THAT CONTRACTS WITH PRIVATE ORGANIZATIONS CONTROLLED BY GOVERNMENT PERSONNEL ARE UNDESIRABLE BECAUSE, AMONG OTHER REASONS, THEY INVITE CRITICISMS OF ALLEGED FAVORITISM AND POSSIBLE FRAUD, AND THAT THOSE CONTRACTS SHOULD THEREFORE BE AUTHORIZED ONLY IN EXCEPTIONAL CASES WHERE THE GOVERNMENT CANNOT REASONABLY BE OTHERWISE SUPPLIED. SEE VALIANT SECURITY AGENCY, SUPRA. THE CONSISTENT PROVISIONS OF ARMED SERVICES PROCUREMENT REGULATIONS 1-302.6 DIRECT:

"1-302.6 CONTRACTS BETWEEN THE GOVERNMENT AND ITS EMPLOYEES OR BUSINESS ORGANIZATIONS SUBSTANTIALLY OWNED OR CONTROLLED BY GOVERNMENT EMPLOYEES.

"(A) CONTRACTS SHALL NOT KNOWINGLY BE G ENTERED INTO BETWEEN THE GOVERNMENT AND EMPLOYEES OF THE GOVERNMENT OR BUSINESS ORGANIZATIONS WHICH ARE SUBSTANTIALLY OWNED OR CONTROLLED BY GOVERNMENT EMPLOYEES, EXCEPT FOR THE MOST COMPELLING REASONS, SUCH AS CASES WHERE THE NEEDS OF THE GOVERNMENT CANNOT REASONABLY BE OTHERWISE SUPPLIED."

IT APPEARS THAT THE ASSOCIATIONS YOU DESCRIBE MAY BE SUBJECT TO THIS LIMITATION, IF THE GOVERNMENT COULD REASONABLY OBTAIN SPORTS OFFICIATING SERVICES FROM OTHER SOURCES.

YOU INDICATE THAT YOUR COMPANY, WHICH IS NOT OWNED OR CONTROLLED BY GOVERNMENT PERSONNEL, IS INTERESTED IN COMPETING WITH THE ASSOCIATIONS FOR THE AWARD OF GOVERNMENT CONTRACTS TO SUPPLY SPORTS OFFICIATING SERVICES. CONSEQUENTLY, IT MAY BE USEFUL FOR YOU TO KNOW THAT AN INTERESTED PARTY MAY PROTEST TO THE GENERAL ACCOUNTING OFFICE THE AWARD OR THE PROPOSED AWARD OF A FORMALLY ADVERTIZED OR NEGOTIATED CONTRACT OF PROCUREMENT OR SALE BY OR FOR A FEDERAL AGENCY. WE ARE ENCLOSING A COPY OF THE REGULATIONS GOVERNING PROTESTS, 4 C.F.R. PART 21 (1982), FOR YOUR FURTHER INFORMATION.

IN YOUR LETTERS YOU ALSO RAISE CERTAIN QUESTIONS CONCERNING POSSIBLE FRAUD AND OTHER IMPROPRIETY IN THE OPERATION OF SOME OF THE ASSOCIATIONS. ASIDE FROM THE REMARKS CONTAINED IN YOUR LETTERS, WE ARE UNAWARE OF ANY ALLEGATIONS OF IMPROPRIETY IN THE OPERATION OF THESE ASSOCIATIONS. IF YOU HAVE SPECIFIC FACTUAL EVIDENCE SHOWING THAT "DUMMY" SPORTS OFFICIALS ASSOCIATIONS HAVE BEEN ESTABLISHED AT MILITARY INSTALLATIONS, PLEASE FORWARD IT TO THE GAO FRAUD TASK FORCE, AT GAO HEADQUARTERS IN WASHINGTON, D. C., OR CALL THE TASK FORCE AT (800) 424 5454.

WE TRUST THAT THIS WILL SERVE THE PURPOSE OF YOUR INQUIRY.