B-174226, MAR 13, 1972

B-174226, MAR 13, 1972

CIVILIAN EMPLOYEE - PERSONAL SERVICES - REIMBURSEMENT - METHOD OF PROCUREMENT CONCERNING THE PROPRIETY OF PAYING AL FLEMING FROM FISCAL YEAR 1971 FUNDS FOR PERSONAL SERVICES RENDERED DURING FISCAL YEAR 1972. PURSUANT TO SECTION 712A, TITLE 31, U.S. CODE, AGENCY FUNDS MAY ONLY BE OBLIGATED FOR SUPPLIES AND SERVICES FOR WHICH A BONA FIDE NEED ARISES DURING THE YEAR OF THEIR APPROPRIATION. FURTHER, IT IS GENERALLY CONSIDERED THAT SUCH NEED DOES NOT ARISE UNTIL THE SERVICES ARE RENDERED. 35 COMP. GEN. 319 (1955). WITH REGARD TO THE METHOD OF PROCUREMENT USED, ALTHOUGH THE CONTRACT FOR MR. FLEMING'S SERVICES WAS CONSIDERED TO HAVE BEEN ENTERED INTO UNDER THE AUTHORITY OF SECTION 602(B) OF THE ECONOMIC OPPORTUNITY ACT OF 1964, WHEN A RELATIONSHIP TANTAMOUNT TO THAT OF EMPLOYER AND EMPLOYEE ARISES AS BETWEEN AN EXPERT AND THE GOVERNMENT, THE PROCESSING OF A STANDARD FORM 50, NOTICE OF PERSONNEL ACTION, BECOMES REQUIRED PURSUANT TO CHAPTER 304 OF THE FEDERAL PERSONNEL MANUAL. THE COMP. GEN. WILL NOT OBJECT TO PAYMENT IN MR. FLEMING'S CASE, SINCE COMPENSATION WAS NOT IN EXCESS OF PRESCRIBED LIMITS AND THE SERVICES APPEAR TO HAVE BEEN PERFORMED IN GOOD FAITH. HOWEVER, IT IS EXPECTED THAT CONTRACTS FOR FUTURE SERVICES OF THIS NATURE WILL BE SECURED IN AN APPROPRIATE MANNER.

TO MR. ROY B. HOGG:

BY YOUR LETTER OF JANUARY 10, 1972, YOU HAVE REQUESTED OUR ADVANCE DECISION REGARDING THE PROPRIETY OF PAYING MR. AL FLEMING FROM FISCAL YEAR 1971 FUNDS FOR SERVICES RENDERED DURING FISCAL YEAR 1972 WHICH SERVICES YOU INDICATE APPEAR TO BE "PERSONAL SERVICES." SPECIFICALLY YOU ASK:

"IS A PURCHASE ORDER EXECUTED ON JUNE 28, 1971, AND CONTAINING A CURRENT FISCAL YEAR FUND CITATION BE CONSIDERED A LEGAL OBLIGATION FOR PERSONAL SERVICES TO BE RENDERED IN THE NEXT (1972) FISCAL YEAR?

"IN THE EVENT THE FIRST QUESTION IS ANSWERED IN THE AFFIRMATIVE, MAY I SCHEDULE MR. FLEMING'S INVOICE FOR PAYMENT WITHOUT VIOLATION OF CURRENT CIVIL SERVICE LAWS AND REGULATIONS?"

MR. FLEMING'S SERVICES WERE CONTRACTED FOR BY THE USE OF A STANDARD FORM 147 (ORDER FOR SUPPLIES OR SERVICES). THAT "PURCHASE ORDER" CONTAINS A CITATION TO "1110500 98 N AA1 29/7," A FISCAL YEAR 1971 FUND CITATION, AND PROVIDES FOR FURNISHING OF THE FOLLOWING SERVICES:

"INDIVIDUAL, MR. AL FLEMING, TO SERVE ON THE ILLINOIS SEOO EVALUATION TEAM, WITH SPECIFIC RESPONSIBILITIES OF ASSESSING THE TRAINING EFFORT AND IMPACT ON THE CAA'S OF SUCH EFFORT, DURING THE PERIOD OF JULY 12, THRU JULY 16, 1971, PLUS BRIEFING.

"THE PLACE OF PERFORMANCE WILL BE SPRINGFIELD CARBONDALE, CHICAGO AND OTHER CAA LOCATIONS AS DEEMED NECESSARY BY THE CHIEF, EVALUATION BRANCH. MR. FLEMING WILL PERFORM UNDER THE DIRECTION OF MR. MILTON HYMAN, CHIEF, EVALUATION BRANCH."

WITH REGARD TO THE USE OF APPROPRIATED FUNDS, SECTION 712A OF TITLE 31 OF THE U.S.C. PROVIDES:

"SEC 712A. BALANCES OF APPROPRIATIONS; EXPENDITURES.

"EXCEPT AS OTHERWISE PROVIDED BY LAW, ALL BALANCES OF APPROPRIATIONS CONTAINED IN THE ANNUAL APPROPRIATION BILLS AND MADE SPECIFICALLY FOR THE SERVICE OF ANY FISCAL YEAR SHALL ONLY BE APPLIED TO THE PAYMENT OF EXPENSES PROPERLY INCURRED DURING THAT YEAR, OR TO THE FULFILLMENT OF CONTRACTS PROPERLY MADE WITHIN THAT YEAR."

IN LINE WITH THE ABOVE, FISCAL YEAR APPROPRIATIONS MAY BE OBLIGATED ONLY FOR SUPPLIES AND SERVICES WHICH SERVE A BONA FIDE NEED ARISING IN THAT FISCAL YEAR. IT IS GENERALLY CONSIDERED THAT A BONA FIDE NEED FOR SERVICES DOES NOT ARISE UNTIL THE SERVICES ARE RENDERED. WHERE, AS HERE, A CONTRACT IS ENTERED INTO IN ONE FISCAL YEAR FOR SERVICES WHICH ARE NOT PERFORMED OR REQUIRED TO BE PERFORMED UNTIL THE SUCCEEDING FISCAL YEAR, THE APPROPRIATION CURRENT AT THE TIME THE SERVICES ARE RENDERED IS PROPERLY CHARGEABLE WITH THE COST. SEE 21 COMP. GEN. 1159 (1941); 27 ID. 764 (1948); 35 ID. 319 (1955). SEE ALSO 38 COMP. GEN. 316 (1958) REGARDING SALARIES AND EXPENSES OF GOVERNMENT EMPLOYEES.

IN VIEW OF THE FOREGOING SINCE THE SERVICES WERE PROVIDED DURING FISCAL YEAR 1972, PAYMENT IF OTHERWISE PROPER SHOULD BE MADE OUT OF FISCAL YEAR 1972 FUNDS.

IN REGARD TO YOUR SECOND QUESTION YOU QUOTE SECTION 602 OF THE ECONOMIC OPPORTUNITY ACT OF 1964 WHICH GIVES THE DIRECTOR THE FOLLOWING AUTHORITY:

"'(A) APPOINT IN ACCORDANCE WITH THE CIVIL SERVICE LAWS SUCH PERSONNEL AS MAY BE NECESSARY TO ENABLE THE OFFICE TO CARRY OUT ITS FUNCTIONS, AND, EXCEPT AS OTHERWISE PROVIDED HEREIN, FIX THEIR COMPENSATION IN ACCORDANCE WITH THE CLASSIFICATION ACT OF 1949 (5 U.S.C. 1071 ET SEQ.);

"'(B)(1) EMPLOY EXPERTS AND CONSULTANTS OR ORGANIZATIONS THEREOF AS AUTHORIZED BY SECTION 15 OF THE ADMINISTRATIVE EXPENSES ACT OF 1946 (5 U.S.C. 55A), EXCEPT THAT NO INDIVIDUAL MAY BE EMPLOYED UNDER THE AUTHORITY OF THIS SUBSECTION FOR MORE THAN 100 DAYS IN ANY FISCAL YEAR; (2) COMPENSATE INDIVIDUALS SO EMPLOYED AT RATES NOT IN EXCESS OF $100 PER DIEM, INCLUDING TRAVEL TIME; AND (3) ALLOW THEM, WHILE AWAY FROM THEIR HOMES OR REGULAR PLACES OF BUSINESS, TRAVEL EXPENSES (INCLUDING PER DIEM IN LIEU OF SUBSISTENCE) AS AUTHORIZED BY SECTION 5 OF SUCH ACT (5 U.S.C. 73B--2) FOR PERSONS IN THE GOVERNMENT SERVICE EMPLOYED INTERMITTENTLY, WHILE SO EMPLOYED: PROVIDED, HOWEVER, THAT CONTRACTS FOR SUCH EMPLOYMENT MAY BE RENEWED ANNUALLY;'"

YOU STATE IN VIEW OF THE APPARENT EMPLOYER-EMPLOYEE RELATIONSHIP CREATED BETWEEN MR. FLEMING AND THE GOVERNMENT THAT THE SERVICES RENDERED BY MR. FLEMING APPEAR IN FACT TO BE PERSONAL SERVICES AND FURTHER THAT IN YOUR OPINION THE USE OF PURCHASE ORDERS TO OBTAIN PERSONAL SERVICES IS IN VIOLATION OF THE CIVIL SERVICE LAWS AND REGULATIONS.

PURSUANT TO THE ABOVE-QUOTED AUTHORITY THE DIRECTOR OF THE OFFICE OF ECONOMIC OPPORTUNITY IS AUTHORIZED TO OBTAIN THE SERVICES OF EXPERTS AND CONSULTANTS IN ACCORDANCE WITH THE PROVISIONS OF 5 U.S.C. 3109 (FORMERLY 5 U.S.C. 55A). THUS, YOUR AGENCY IS SPECIFICALLY PERMITTED TO PROCURE THE SERVICES OF EXPERTS AND CONSULTANTS EITHER BY CONTRACT OR BY APPOINTMENT. HOWEVER, AS WE INDICATED IN OUR DECISION B-174226, JANUARY 12, 1972, ADDRESSED TO YOU, IF, AS BETWEEN THE EXPERT AND THE GOVERNMENT A RELATIONSHIP TANTAMOUNT TO THAT OF EMPLOYER AND EMPLOYEE IS CREATED, THE INSTRUCTIONS OF THE CIVIL SERVICE COMMISSION AT CHAPTER 304 OF THE FEDERAL PERSONNEL MANUAL ARE APPLICABLE. AS YOU HAVE INDICATED, THOSE SET FORTH CERTAIN PROCEDURAL REQUIREMENTS, INCLUDING THE PROCESSING OF A STANDARD FORM 50, NOTICE OF PERSONNEL ACTION.

WE UNDERSTAND FROM CONVERSATIONS WITH PERSONNEL IN THE EVALUATION BRANCH OF REGION V THAT THE CONTRACT FOR MR. FLEMING'S SERVICES AND SIMILAR CONTRACTS FOR SERVICES OF MEMBERS OF EVALUATIONS TEAMS WERE ENTERED INTO UNDER THE EXPERT AND CONSULTANT AUTHORITY OF SEC 602(B) OF THE ECONOMIC OPPORTUNITY ACT, QUOTED ABOVE. WE ARE ADVISED THAT THE PERFORMANCE OF MEMBERS OF EVALUATION TEAMS CONSISTING IN LARGE PART OF DISCUSSIONS AMONG MEMBERS OF THE TEAM, WAS DIRECTED BY EITHER THE CHIEF OF THE EVALUATION BRANCH OR OTHER GOVERNMENT PERSONNEL AND IS CONSIDERED TO HAVE BEEN UNDER THE SUPERVISION OF GOVERNMENT PERSONNEL. THIS TOGETHER WITH THE FACT THAT THE SERVICES WERE PERFORMED IN SPACE PROVIDED AND AT TIMES DESIGNATED BY THE GOVERNMENT AND WERE DIRECTED AT EVALUATING AGENCY FUNCTIONS ALL STRONGLY INDICATE IN ACCORDANCE WITH THE CRITERIA SET FORTH AT CHAPTER 304, SUBCHAPTER 1-4, OF THE FEDERAL PERSONNEL MANUAL, THAT THE SERVICES PROVIDED WERE IN FACT PERSONAL SERVICES. THE USE OF A PURCHASE ORDER WITHOUT COMPLIANCE WITH THE PRESCRIBED PROCEDURES AT CHAPTER 304 IS THEREFORE NOT APPROPRIATE TO SECURE THE EXPERT SERVICES HERE UNDER CONSIDERATION.

WHILE IN CERTAIN CASES THE USE OF A PURCHASE ORDER TO OBTAIN INDEPENDENT CONTRACTOR-TYPE SERVICES MIGHT BE PROPER, WE POINT OUT THAT WHEN IT IS DESIRABLE TO OBTAIN EXPERT OR CONSULTANT SERVICES ON AN INDEPENDENT CONTRACT BASIS (NO EMPLOYER-EMPLOYEE RELATIONSHIP) IN ACCORDANCE WITH 5 U.S.C. 3109, A FORMAL CONTRACT PROCEDURE SHOULD BE UTILIZED.

IN VIEW OF THE FACT THAT THE COMPENSATION PROVIDED IS NOT IN EXCESS OF THE LEVEL PERMISSIBLE FOR EXPERTS AND CONSULTANTS, AND SINCE MR. FLEMING'S SERVICES APPEAR TO HAVE BEEN PERFORMED IN GOOD FAITH UNDER AUTHORITY GIVEN YOUR AGENCY TO HIRE EXPERTS AND CONSULTANTS, WE WOULD NOT OBJECT TO THE INVOICE, RETURNED HEREWITH, BEING PROCESSED FOR PAYMENT OUT OF APPROPRIATE FUNDS, IF OTHERWISE PROPER. IT IS EXPECTED THAT EXPERT AND CONSULTANT SERVICES WILL IN THE FUTURE BE SECURED IN THE MANNER INDICATED ABOVE.