B-119832, JAN. 11, 1957

B-119832: Jan 11, 1957

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GENERAL SERVICES ADMINISTRATION: REFERENCE IS MADE TO YOUR LETTER OF DECEMBER 20. WHEREIN IT WAS HELD (QUOTING FROM THE SYLLABUS): "CONTRACTS FOR FOOD SERVICES IN GOVERNMENT-OWNED OR LEASED BUILDINGS LOCATED OUTSIDE THE DISTRICT OF COLUMBIA WHICH INCLUDE PROVISION FOR PAYMENT OF A PERCENTAGE OF THE GROSS RECEIPTS INTO A RESERVE AND FOR THE USE OF SUCH RESERVE FOR REPAIR AND REPLACEMENT OF GOVERNMENT-OWNED EQUIPMENT ARE CONTRARY TO SECTION 3617. WHICH SECTION WAS NOT REFERRED TO IN THE SAID DECISION OR IN THE GENERAL SERVICES ADMINISTRATION LETTER OF APRIL 23. IN REPLY TO WHICH THE DECISION WAS RENDERED. YOU NOW REFER TO THE FACT THAT THE SAID SECTION AUTHORIZES THE BUILDINGS MANAGEMENT FUNCTIONS OF GENERAL SERVICES ADMINISTRATION TO BE FINANCED ON A REVOLVING FUND BASIS AND YOU QUOTE FROM THE SECTION CERTAIN PROVISIONS WHICH YOU REGARD AS AUTHORIZING DEPOSIT INTO THE SAID REVOLVING FUND (BUILDINGS MANAGEMENT FUND) OF THE RESERVE EQUIPMENT ACCOUNT FUNDS WHICH WERE SET ASIDE FROM OPERATING RECEIPTS PURSUANT TO THE CONTRACTS IN QUESTION AND WHICH FUNDS YOU STATE HAVE BEEN FROZEN SINCE RECEIPT OF THE DECISION OF AUGUST 30.

B-119832, JAN. 11, 1957

TO HONORABLE FRANKLIN G. FLOETE, ADMINISTRATOR, GENERAL SERVICES ADMINISTRATION:

REFERENCE IS MADE TO YOUR LETTER OF DECEMBER 20, 1956, RELATIVE TO OFFICE DECISION OF AUGUST 30, 1955, B-119832 (35 COMP. GEN. 113), WHEREIN IT WAS HELD (QUOTING FROM THE SYLLABUS):

"CONTRACTS FOR FOOD SERVICES IN GOVERNMENT-OWNED OR LEASED BUILDINGS LOCATED OUTSIDE THE DISTRICT OF COLUMBIA WHICH INCLUDE PROVISION FOR PAYMENT OF A PERCENTAGE OF THE GROSS RECEIPTS INTO A RESERVE AND FOR THE USE OF SUCH RESERVE FOR REPAIR AND REPLACEMENT OF GOVERNMENT-OWNED EQUIPMENT ARE CONTRARY TO SECTION 3617, R.S., AND 40 U.S.C. 303 (B), WHICH REQUIRE THE DEPOSIT OF MONEY FOR THE USE OF THE UNITED STATES, AND MONEY DERIVED FROM RENTALS, INTO THE TREASURY AS MISCELLANEOUS RECEIPTS AND PROHIBIT INCLUSION OF REPAIR AND IMPROVEMENT IN LEASES.'

IN YOUR LETTER OF DECEMBER 20, 1956, YOU REQUEST RECONSIDERATION OF THE DECISION OF AUGUST 30, 1955, ON THE BASIS OF SECTION 210 (F) OF THE FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT, AS AMENDED, (40 U.S.C. 490 (F) (, WHICH SECTION WAS NOT REFERRED TO IN THE SAID DECISION OR IN THE GENERAL SERVICES ADMINISTRATION LETTER OF APRIL 23, 1954, IN REPLY TO WHICH THE DECISION WAS RENDERED. YOU NOW REFER TO THE FACT THAT THE SAID SECTION AUTHORIZES THE BUILDINGS MANAGEMENT FUNCTIONS OF GENERAL SERVICES ADMINISTRATION TO BE FINANCED ON A REVOLVING FUND BASIS AND YOU QUOTE FROM THE SECTION CERTAIN PROVISIONS WHICH YOU REGARD AS AUTHORIZING DEPOSIT INTO THE SAID REVOLVING FUND (BUILDINGS MANAGEMENT FUND) OF THE RESERVE EQUIPMENT ACCOUNT FUNDS WHICH WERE SET ASIDE FROM OPERATING RECEIPTS PURSUANT TO THE CONTRACTS IN QUESTION AND WHICH FUNDS YOU STATE HAVE BEEN FROZEN SINCE RECEIPT OF THE DECISION OF AUGUST 30, 1955.

THE REFERRED-TO SECTION 210 (F) OF THE FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT (40 U.S.C. 490 (F) ( PROVIDES:

"THERE MAY BE ESTABLISHED BY THE SECRETARY OF THE TREASURY, ON SUCH DATE DURING THE FISCAL YEAR 1953 AS MAY BE DETERMINED BY THE ADMINISTRATOR, A BUILDINGS MANAGEMENT FUND, WHICH SHALL BE AVAILABLE, WITHOUT FISCAL YEAR LIMITATION, FOR EXPENSES NECESSARY FOR BUILDINGS MANAGEMENT OPERATIONS AND RELATED SERVICES, AUTHORIZED BY LAW TO BE PERFORMED BY THE GENERAL SERVICES ADMINISTRATION. ACCOUNTING FOR THE FUND SHALL BE MAINTAINED ON THE ACCRUAL METHOD AND FINANCIAL REPORTS SHALL BE PREPARED ON THE BASIS OF SUCH ACCOUNTING. THERE IS AUTHORIZED TO BE APPROPRIATED TO SAID FUND SUCH SUMS AS MAY BE REQUIRED, BUT NOT TO EXCEED THE AMOUNT OF $10,000,000, AND ANY STOCKS OF SUPPLIES AND ANY EQUIPMENT, AVAILABLE FOR BUILDINGS MANAGEMENT FUNCTIONS OF THE GENERAL SERVICES ADMINISTRATION, ON HAND, OR ON ORDER, ON THE DATE OF ESTABLISHMENT OF SAID FUND, SHALL ALSO BE USED TO CAPITALIZE THE FUND: PROVIDED, THAT SAID FUND SHALL BE CREDITED WITH (1) ANNUAL ADVANCES FOR NONRECURRING EXPENSES, QUARTERLY ADVANCES FOR OTHER EXPENSES, AND REIMBURSEMENTS FROM AVAILABLE APPROPRIATIONS AND FUNDS OF THE GENERAL SERVICES ADMINISTRATION AND OF ANY OTHER AGENCY, PERSON, OR ORGANIZATION TO WHICH SERVICES, SPACE, QUARTERS, MAINTENANCE, REPAIR, OR OTHER FACILITIES ARE FURNISHED, AT RATES TO BE DETERMINED BY THE ADMINISTRATOR ON THE BASIS OF ESTIMATED OR ACTUAL COSTS (INCLUDING ACCRUED LEAVE, AND MAINTENANCE, REPAIR, AND, WHERE APPLICABLE, DEPRECIATION OF EQUIPMENT) AND (2) ALL OTHER REIMBURSEMENTS, AND REFUNDS OR RECOVERIES RESULTING FROM OPERATIONS OF THE FUND, INCLUDING THE NET PROCEEDS OF DISPOSAL OF EXCESS OR SURPLUS PERSONAL PROPERTY AND RECEIPTS FROM CARRIERS AND OTHERS FOR LOSS OF, OR DAMAGE TO PROPERTY: PROVIDED FURTHER, THAT FOLLOWING THE CLOSE OF EACH FISCAL YEAR ANY NET INCOME, AFTER MAKING PROVISION FOR PRIOR YEAR LOSSES, IF ANY, SHALL BE COVERED INTO THE TREASURY OF THE UNITED STATES AS MISCELLANEOUS RECEIPTS: PROVIDED FURTHER, THAT SAID FUND SHALL NOT BE AVAILABLE FOR EXPENSES OF CARRYING OUT THE PROVISIONS OF THE ACT OF JUNE 24, 1948 (62 STAT. 644), OR SECTION 345 OF THIS TITLE, AND SHALL NOT BE CREDITED WITH RECEIPTS FROM OPERATIONS UNDER SAID PROVISIONS OF LAW, OR (EXCEPT AS PROVIDED IN THIS SECTION FOR THE NET PROCEEDS OF DISPOSAL OF EXCESS OR SURPLUS PROPERTY AND RECEIPTS FROM LOSS OR DAMAGES TO PROPERTY) WITH ANY RECEIPTS REQUIRED BY ANY OTHER LAW TO BE CREDITED TO MISCELLANEOUS RECEIPTS OF THE TREASURY.'

HAVING REGARD FOR THE LANGUAGE OF THE ABOVE-QUOTED SECTION 210 (F) AND THE LEGISLATIVE HISTORY OF THE ACT OF JULY 12, 1952, 66 STAT. 594, BY WHICH THE SECTION WAS ENACTED, IT IS BELIEVED THAT THE RESERVE EQUIPMENT ACCOUNT FUNDS IN QUESTION ARE FOR DEPOSIT INTO THE TREASURY AS MISCELLANEOUS RECEIPTS IN ACCORDANCE WITH THE GENERAL RULE. AS STATED IN THE DECISION OF AUGUST 30, 1955, IT SEEMS OBVIOUS THAT THE ENTIRE AMOUNT OF THE SAID FUNDS IS "FOR THE USE OF THE UNITED STATES" AND, IN THE ABSENCE OF ANY CONTRARY STATUTORY REQUIREMENT, SHOULD BE DEPOSITED INTO THE TREASURY AS MISCELLANEOUS RECEIPTS. THE FINAL PROVISO OF SECTION 210 (F) PROVIDES THAT THE BUILDINGS MANAGEMENT FUND "SHALL NOT BE CREDITED * * * (EXCEPT AS PROVIDED IN THIS SECTION FOR THE NET PROCEEDS OF DISPOSAL OF EXCESS OR SURPLUS PROPERTY AND RECEIPTS FROM LOSS OR DAMAGE TO PROPERTY) WITH ANY RECEIPTS REQUIRED BY ANY OTHER LAW TO BE CREDITED TO MISCELLANEOUS RECEIPTS OF THE TREASURY.' THE FUNDS IN QUESTION CANNOT PROPERLY BE REGARDED AS "PROCEEDS OF DISPOSAL OF EXCESS OR SURPLUS PROPERTY" OR "RECEIPTS FROM LOSS OR DAMAGE TO PROPERTY" WITHIN THE MEANING OF THE PROVISO.

IT IS NOTED THAT THE DRAFT BILL SUBMITTED BY GENERAL SERVICES ADMINISTRATION TO THE BUREAU OF THE BUDGET WITH LETTER DATED FEBRUARY 12, 1952 (WHICH DRAFT APPARENTLY WAS THE ORIGINAL DRAFT OF THE AMENDMENT WHICH BECAME SECTION 210 (F) (, CONTAINED THE FOLLOWING SENTENCE:

"FOLLOWING THE CLOSE OF EACH FISCAL YEAR ANY NET INCOME RESULTING FROM THE OPERATION OF SAID FUND, AFTER MAKING PROVISION FOR PRIOR YEAR LOSSES, IF ANY, DETERMINED ON THE SAME BASIS, AND FOR THE ESTABLISHMENT OF RESERVES FOR THE REPLACEMENT OF EQUIPMENT * * * SHALL BE COVERED INTO THE TREASURY OF THE UNITED STATES AS MISCELLANEOUS RECEIPTS.'

HOWEVER, NO SUCH SPECIFIC PROVISION FOR THE ESTABLISHMENT OF RESERVES FOR REPLACEMENT OF EQUIPMENT WAS CONTAINED IN THE SECTION AS FINALLY ENACTED, THUS INDICATING THAT IT WAS NOT THE CONGRESSIONAL INTENTION TO PROVIDE FOR SUCH RESERVES; AND THERE HAS NOT BEEN FOUND IN THE LEGISLATIVE HISTORY OF THE SECTION ANY INDICATION OF THE EXISTENCE OF SUCH CONGRESSIONAL INTENTION.

IN VIEW OF THE FOREGOING, IT IS CONCLUDED THAT THE DECISION OF AUGUST 30, 1955, WAS CORRECT AND THAT THE PROVISIONS OF SECTION 210 (F) OF THE FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT DO NOT REQUIRE MODIFICATION OF THE DECISION. ACCORDINGLY, THE AMOUNT IN THE RESERVE FUND IN QUESTION SHOULD BE DEPOSITED INTO THE TREASURY AS MISCELLANEOUS RECEIPTS.

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