B-148879, MAY 7, 1963, 42 COMP. GEN. 619

B-148879: May 7, 1963

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PAY - WITHHOLDING - DEBT LIQUIDATION - AIR RESERVATION PENALTY THE "NO-SHOW" PENALTY CHARGES IMPOSED BY THE AIRLINES WHEN GOVERNMENT PERSONNEL FAIL TO USE OR CANCEL RESERVATIONS AND WHICH ARE PAID BY THE GOVERNMENT MAY NOT BE RECOVERED BY INVOLUNTARY COLLECTIONS FROM THE CURRENT PAY OF MEMBERS OF THE UNIFORMED SERVICES AS ERRONEOUS PAYMENTS UNDER THE AUTHORITY OF 5 U.S.C. 46D. THE TERM "ERRONEOUS PAYMENTS" IN THAT SECTION DENOTING PAYMENTS WHICH ARE INCORRECT. OR OTHERWISE DEVIATE FROM THE LAW OR REGULATION UNDER WHICH THE PAYMENT IS MADE. EVN THOUGH THE GOVERNMENT INCURRED AN EXPENSE FOR WHICH THE MEMBER IS LIABLE. 1963: REFERENCE IS MADE TO LETTER OF FEBRUARY 14. THE QUESTION UPON WHICH DECISION IS REQUESTED AND A DISCUSSION OF THE MATTER ARE CONTAINED IN COMMITTEE ACTION NO. 312 OF THE MILITARY PAY AND ALLOWANCE COMMITTEE.

B-148879, MAY 7, 1963, 42 COMP. GEN. 619

PAY - WITHHOLDING - DEBT LIQUIDATION - AIR RESERVATION PENALTY THE "NO-SHOW" PENALTY CHARGES IMPOSED BY THE AIRLINES WHEN GOVERNMENT PERSONNEL FAIL TO USE OR CANCEL RESERVATIONS AND WHICH ARE PAID BY THE GOVERNMENT MAY NOT BE RECOVERED BY INVOLUNTARY COLLECTIONS FROM THE CURRENT PAY OF MEMBERS OF THE UNIFORMED SERVICES AS ERRONEOUS PAYMENTS UNDER THE AUTHORITY OF 5 U.S.C. 46D, THE TERM "ERRONEOUS PAYMENTS" IN THAT SECTION DENOTING PAYMENTS WHICH ARE INCORRECT, CONTAIN ERROR, OR OTHERWISE DEVIATE FROM THE LAW OR REGULATION UNDER WHICH THE PAYMENT IS MADE; THEREFORE, THE "NO-SHOW" PENALTY PAYMENTS HAVING BEEN CORRECTLY MADE, EVN THOUGH THE GOVERNMENT INCURRED AN EXPENSE FOR WHICH THE MEMBER IS LIABLE, AN INVOLUNTARY COLLECTION FROM THE CURRENT PAY OF THE MEMBER TO RECOVER HIS INDEBTEDNESS MAY NOT BE MADE UNDER THE AUTHORITY OF 5 U.S.C. 46D, THE MEMBER'S INDEBTEDNESS TO THE UNITED STATES BEING THE RESULT OF HIS NEGLIGENCE OR MISCONDUCT AND NOT THE RESULT OF ANY AMOUNTS HAVING BEEN PAID IN ERROR ON BEHALF OF THE MEMBER BY THE GOVERNMENT.

TO THE SECRETARY OF DEFENSE, MAY 7, 1963:

REFERENCE IS MADE TO LETTER OF FEBRUARY 14, 1963, FROM THE ASSISTANT SECRETARY OF DEFENSE (COMPTROLLER) REQUESTING A DECISION AS TO WHETHER "NO -SHOW" PENALTY CHARGES IMPOSED BY AIRLINES UPON GOVERNMENT PERSONNEL MAY BE CONSIDERED ERRONEOUS PAYMENTS UNDER THE AUTHORITY OF 5 U.S.C. 46D AND DEDUCTED FROM THE CURRENT PAY OF THE PERSON CONCERNED WHEN SUCH PERSON FAILS TO CANCEL THE RESERVATION AND THE GOVERNMENT HAS PAID THE PENALTY TO THE AIRLINE. THE QUESTION UPON WHICH DECISION IS REQUESTED AND A DISCUSSION OF THE MATTER ARE CONTAINED IN COMMITTEE ACTION NO. 312 OF THE MILITARY PAY AND ALLOWANCE COMMITTEE, DEPARTMENT OF DEFENSE, A COPY OF WHICH WAS TRANSMITTED WITH THE LETTER OF FEBRUARY 14, 1963.

SECTION 1 OF THE ACT OF JULY 15, 1954, PUBLIC LAW 497, 68 STAT. 482, 5 U.S.C. 46D, PROVIDES IN PERTINENT PART AS FOLLOWS:

WHEN IT IS DETERMINED BY THE SECRETARY OF THE DEPARTMENT CONCERNED OR THE HEAD OF THE AGENCY OF INDEPENDENT ESTABLISHMENT CONCERNED, OR ONE OF THEIR DESIGNEES, THAT AN EMPLOYEE OF THE UNITED STATES OR ANY MEMBER OF THE ARMY, NAVY, AIR FORCE, MARINE CORPS, OR COAST GUARD, OR A RESERVE COMPONENT THEREOF, IS INDEBTED TO THE UNITED STATES AS THE RESULT OF ANY ERRONEOUS PAYMENT MADE BY THE DEPARTMENT, AGENCY, OR INDEPENDENT ESTABLISHMENT CONCERNED TO OR ON BEHALF OF ANY SUCH PERSON, THE AMOUNT OF THE INDEBTEDNESS MAY BE COLLECTED IN MONTHLY INSTALLMENTS, OR AT OFFICIALLY ESTABLISHED REGULAR PAY PERIOD INTERVALS, BY DEDUCTION IN REASONABLE AMOUNTS FROM THE CURRENT PAY ACCOUNT OF SUCH PERSON. * * *

THE PROVISIONS AND CONDITIONS FOR ASSESSMENT AND PAYMENT OF PENALTIES (LIQUIDATED DAMAGES), NOT IN EXCESS OF $40, TO AN AIRLINE BY A PASSENGER WHO FAILED TO USE OR CANCEL CONFIRMED RESERVED SPACE ON ONE OF ITS FLIGHTS TO BE PERFORMED WHOLLY WITHIN THE CONTINENTAL UNITED STATES, AND FOR PAYMENT OF PENALTIES BY THE AIRLINE WHEN IT FAILED TO PROVIDE A PASSENGER WITH CONFIRMED RESERVED SPACE, WERE SET FORTH IN THE AIR TRAFFIC CONFERENCE OF AMERICA, LOCAL AND JOINT PASSENGER RULES TARIFF NO. PR-4, C.A.B. NO. 43, EFFECTIVE MAY 1, 1962, AND INITIATED ON AN EXPERIMENTAL BASIS FOR A PERIOD EXPIRING 6 MONTHS AFTER IMPLEMENTATION. THE DATE OF EXPIRATION WAS SUBSEQUENTLY EXTENDED TO JANUARY 31, 1963, AND THEREAFTER, THE TEMPORARY TARIFF PROVISIONS AUTHORING COLLECTION OF PENALTIES FROM TRAVELERS FOR FAILURE TO CANCEL UNUSED RESERVED SPACE WERE DISCONTINUED.

RULE 10 (A) (1) OF THE TARIFF PROVISIONS PROVIDED THAT, EXCEPT FOR RESERVATIONS HELD ON A NO-TIME-LIMIT BASIS UNDER CERTAIN CONDITIONS PRESCRIBED IN NOTE 1 THERETO, A RESERVATION OF SPACE WAS TENTATIVE ONLY AND WAS NOT VALID UNTIL THE PASSENGER HAD RECEIVED A TICKET SPECIFYING THEREON HIS CONFIRMED RESERVED SPACE. PARAGRAPH (C) (3) OF THE RULE WAS AS FOLLOWS:

(A) IF PASSENGER PRESENTS TICKET FOR REFUND OR USE AFTER DEPARTURE OF FLIGHT FOR WHICH HE HELD CONFIRMED RESERVED SPACE, AND THE EXCEPTIONS IN PARAGRAPH (C) (1) ARE NOT APPLICABLE, CARRIER WILL DEDUCT AMOUNT OF COMPENSATION FROM AMOUNT TO BE REFUNDED, OR, IN THE CASE OF A TICKET PRESENTED FOR RE-USE, CARRIER WILL COLLECT AMOUNT OF SAID COMPENSATION BEFORE HONORING SAID TICKET.

(B) IF A PERSON SUBJECT TO THIS RULE PURSUANT TO NOTE 1 HEREOF, FAILS TO USE OR CANCEL SUCH SPACE, AND THE EXCEPTIONS IN PARAGRAPH (C) (1) ARE NOT APPLICABLE, CARRIER WILL BILL PASSENGER FOR AMOUNT OF COMPENSATION AND PASSENGER WILL REMIT SUCH AMOUNT.

IT IS FOR NOTING THAT ORDER NO. E-18064, ADOPTED BY THE CIVIL AERONAUTICS BOARD ON MARCH 1, 1962, DENIED A REQUEST BY THE DEFENSE MANAGEMENT TRAFFIC SERVICE THAT THE "NO-SHOW" PENALTY PROVISIONS OF THE PROPOSED TARIFF RULES NOT BE MADE APPLICABLE TO PERSONS TRAVELING ON GOVERNMENT TRANSPORTATION REQUESTS CHARGEABLE TO THE DEPARTMENT OF DEFENSE, CONDITIONED ON CERTIFICATION BY THE ISSUING AUTHORITIES THAT THE "NO-SHOW" WAS THE RESULT OF THE EXIGENCIES OF THE SERVICE AND NOT THE FAULT OF THE TRAVELER.

WHILE CASES OF THE TYPE COVERED BY THE QUESTION PRESENTED WOULD NOT ARISE UNDER THE PRESENT TARIFFS AND REGULATIONS, IT IS UNDERSTOOD THAT SOME PAYMENTS OF THE CLASS INVOLVED HAVE BEEN MADE BY THE GOVERNMENT AND HAVE NOT BEEN RECOVERED FROM THE TRAVELERS CONCERNED. IT IS OUR UNDERSTANDING, ALSO, THAT THERE MAY BE CASES WHEREIN PAYMENTS OF THE CLASS INVOLVED WILL RESULT FROM DEDUCTIONS OF "NO-SHOW" CHARGES FROM REFUNDS MADE BY THE AIRLINES TO THE GOVERNMENT FOR UNUSED TICKETS PURCHASED ON TRANSPORTATION REQUESTS. IN OUR DECISION OF JUNE 15, 1962, 41 COMP. GEN. 806, B-148879, WE HELD IN CONNECTION WITH THE PAYMENT OF THE PENALTY CHARGES THAT "AN EMPLOYEE WHO FOR REASONS OTHER THAN THE PERFORMANCE OF OFFICIAL BUSINESS, EXCEPT FOR REASONS BEYOND HIS CONTROL AND ACCEPTABLE TO THE AGENCY CONCERNED,FAILS TO USE OR CANCEL A CONFIRMED RESERVED SPACE IS HIMSELF LIABLE FOR ANY PENALTY (LIQUIDATED DAMAGES) RESULTING FROM SUCH ILURE.' WHILE THAT HOLDING CONCERNED TRAVEL OF CIVILIAN PERSONNEL IT IS VIEWED AS BEING EQUALLY APPLICABLE TO THE TRAVEL OF MEMBERS OF THE ARMED FORCES. ORDER TO PROVIDE A NECESSARY SPECIFIC STATUTORY BASIS (IN ADDITION TO THE LIMITED AUTHORITY CONTAINED IN OTHER STATUTORY PROVISIONS) FOR THE INVOLUNTARY COLLECTION FROM THE CURRENT PAY ACCOUNTS OF MEMBERS FOR PAYMENTS MADE BY THE DEPARTMENTS IN ALL SUCH CASES, IT IS SUGGESTED THAT THE MATTER MAY BE VIEWED AS COMING WITHIN THE PROVISIONS OF 5 U.S.C. 46D, ON THE PREMISE STATED AS FOLLOWS:

IT MAY BE ASSUMED THAT THE DEPARTMENT CONCERNED IN ORDERING THE TRAVEL OF THE MILITARY PASSENGER, AUTHORIZES THE TRAVEL ONLY ON CONDITION THAT THE MEMBER OBEYS ALL APPLICABLE RULES AND REGULATIONS INCIDENT TO THE TRAVEL, A PART OF WHICH IS THE OBLIGATION TO MAKE TIMELY CANCELLATION OF RESERVED SPACE ON A FLIGHT, IF CONDITIONS RENDER SUCH ACTION NECESSARY IN ORDER TO AVOID THE APPLICATION OF THE PENALTY. 5 U.S.C. 46D PROVIDES FOR COLLECTION OF ERRONEOUS PAYMENTS NOT ONLY TO THE PERSON BUT ERRONEOUS PAYMENTS MADE BY THE DEPARTMENT IN BEHALF OF THE PERSON. IT SEEMS THEN IN ANY CASE IN WHICH THE MILITARY PASSENGER THROUGH HIS OWN FAULT FAILS TO CANCEL, THEREBY SUBJECTING HIS DEPARTMENT TO A PENALTY IT DID NOT EXPECT OR INTEND TO INCUR AT THE TIME HIS ORDERS WERE ISSUED, THAT THE PAYMENT COULD NOT WITHOUT SOME DOUBT BE CONSIDERED FREE FROM ERROR. * * *

THE INDEBTEDNESSES TO THE UNITED STATES OF MEMBERS OF THE ARMED FORCES WHICH ARE SUBJECT TO COLLECTION PURSUANT TO THE AUTHORITY CONTAINED IN SECTION 46D OF TITLE 5, U.S. CODE, ARE CONFINED BY SPECIFIC TERMS OF THAT SECTION TO THOSE DEBTS WHICH RESULTED FROM ERRONEOUS PAYMENTS, MADE BY THE DEPARTMENT CONCERNED, TO OR ON BEHALF OF SUCH MEMBERS. IN REPORTING TO THE CONGRESS ON THE THEN PROPOSED LEGISLATION WHICH WAS BEFORE THE COMMITTEE ON GOVERNMENT OPERATIONS IN THE FORM OF H.R. 7477, 83D CONGRESS (A BILL SIMILAR TO S. 2728 WHICH WAS ENACTED AS PUBLIC LAW 497, 5 U.S.C. 46D), WE EXPRESSED THE VIEW (APPEARING ON PAGE 5 OF H.REPT. NO. 1507) THAT SUCH PAYMENTS, GENERALLY SPEAKING, WERE OVERPAYMENTS MADE AS A RESULT OF ADMINISTRATIVE ERROR IN SOME FORM. NOTHING IN THE LEGISLATIVE HISTORY OF THE STATUTE INDICATES THAT THE TERM "ERRONEOUS PAYMENT" AS CONTAINED THEREIN WAS USED IN OTHER THAN ITS ORDINARY SENSE--- THAT IS, TO DENOTE PAYMENTS WHICH ARE INCORRECT, CONTAIN ERROR OR OTHERWISE DEVIATE FROM THE LAW OR REGULATION INVOLVED. SINCE THE PROVISIONS OF SECTION 46D, SUPRA, BY THE CLEAR MEANING OF THE TERM USED THEREIN, CONCERNS THE RECOVERY OF ONLY SUCH UNAUTHORIZED OR IMPROPER EXPENDITURES, PAYMENTS WHICH ARE CORRECTLY MADE IN ACCORDANCE WITH APPLICABLE RULES AND REGULATIONS, AS IN THE CIRCUMSTANCES HERE CONSIDERED, MAY NOT REASONABLY BE CONSIDERED AS "ERRONEOUS" PAYMENTS WITHIN THE CONTEMPLATION OF THAT SECTION.

WHILE IT IS APPARENT THAT BY REASON OF THE AUTHORIZED DEDUCTION OF PENALTY CHARGES BY THE AIRLINES FROM TICKET REFUNDS, THE GOVERNMENT WOULD INCUR AN EXPENSE FOR WHICH THE MEMBER IS LIABLE UNLESS THE FAILURE TO CANCEL THE UNUSED RESERVATION WAS UNAVOIDABLE IN THE CONDUCT OF OFFICIAL BUSINESS OR FOR REASONS ACCEPTABLE TO THE DEPARTMENT AS BEING BEYOND HIS CONTROL, IT SEEMS CLEAR THAT THE MEMBER'S INDEBTEDNESS TO THE UNITED STATES WOULD BE AS A DIRECT RESULT OF HIS OWN NEGLIGENCE OR MISCONDUCT AND NOT AS THE RESULT OF ANY AMOUNTS HAVING BEEN PAID IN ERROR ON BEHALF OF THE MEMBER BY THE DEPARTMENT CONCERNED.

ACCORDINGLY, FOR THE REASONS STATED ABOVE, A MEMBER'S INDEBTEDNESS TO THE GOVERNMENT ARISING UNDER THE CIRCUMSTANCES DISCUSSED HEREIN IS NOT VIEWED AS BEING SUBJECT TO INVOLUNTARY COLLECTION FROM HIS CURRENT PAY UNDER THE AUTHORITY CONTAINED IN 5 U.S.C. 46D.

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