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A-67002, FEBRUARY 24, 1936, 15 COMP. GEN. 715

A-67002 Feb 24, 1936
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THAT CONTRACTS FOR THE PURCHASE OF BITUMINOUS COAL FOR PERIODS IN EXCESS OF 30 DAYS ARE PROHIBITED BY THE BITUMINOUS COAL CONSERVATION ACT OF 1935. UNTIL THE PRICES SHALL HAVE BEEN ESTABLISHED AS REQUIRED BY SAID ACT. RELATES ONLY TO PURCHASES MADE FROM A PRODUCER AND NOT TO PURCHASES FROM A DEALER WHO IS NOT A PRODUCER. ALL SUCH CONTRACTS SHOULD SHOW THE NAME AND ADDRESS OF THE COAL PRODUCER AND BE ACCOMPANIED BY A CERTIFICATE BY THE NATIONAL BITUMINOUS COAL COMMISSION THAT SUCH PRODUCER IS COMPLYING WITH THE CODE. WHICH READS AS FOLLOWS: THE ATTENTION OF POSTMASTERS IS INVITED TO THE NOTICE APPEARING IN POSTAL BULLETIN DATED NOVEMBER 5. THE SOLICITOR HAS FURTHER RULED THAT IT IS NOT INCUMBENT UPON CONTRACTING OFFICERS TO ASCERTAIN WHETHER PRICES HAVE BEEN ESTABLISHED AS PRESCRIBED BY SUBPARAGRAPH (E) PART II OF SECTION 4 OF THE ACT.

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A-67002, FEBRUARY 24, 1936, 15 COMP. GEN. 715

CONTRACTS - BITUMINOUS COAL CONSERVATION ACT OF 1935 - STATUTORY TIME AND PURCHASE LIMITATIONS THE RULE ANNOUNCED IN DECISION A-67598 OF NOVEMBER 20, 1935, 15 COMP. GEN. 428, THAT CONTRACTS FOR THE PURCHASE OF BITUMINOUS COAL FOR PERIODS IN EXCESS OF 30 DAYS ARE PROHIBITED BY THE BITUMINOUS COAL CONSERVATION ACT OF 1935, 49 STAT. 991, UNTIL THE PRICES SHALL HAVE BEEN ESTABLISHED AS REQUIRED BY SAID ACT, RELATES ONLY TO PURCHASES MADE FROM A PRODUCER AND NOT TO PURCHASES FROM A DEALER WHO IS NOT A PRODUCER. NO BITUMINOUS COAL MAY BE PURCHASED BY THE UNITED STATES UNLESS SUCH COAL BE PRODUCED AT A MINE WHERE THE PRODUCER HAS COMPLIED WITH THE PROVISIONS OF THE CODE SET OUT IN SECTION 4 OF THE BITUMINOUS COAL CONSERVATION ACT OF 1935, 49 STAT. 994, AND ALL SUCH CONTRACTS SHOULD SHOW THE NAME AND ADDRESS OF THE COAL PRODUCER AND BE ACCOMPANIED BY A CERTIFICATE BY THE NATIONAL BITUMINOUS COAL COMMISSION THAT SUCH PRODUCER IS COMPLYING WITH THE CODE. SEE A-67002, JANUARY 2, 1936, 15 COMP. GEN. 577.

COMPTROLLER GENERAL MCCARL TO THE POSTMASTER GENERAL, FEBRUARY 24, 1936:

MY ATTENTION HAS RECENTLY BEEN CALLED TO A NOTICE DATED DECEMBER 6, 1935, FROM THE FOURTH ASSISTANT POSTMASTER GENERAL, PUBLISHED IN THE POSTAL BULLETIN, ISSUE OF DECEMBER 9, 1935, WHICH READS AS FOLLOWS:

THE ATTENTION OF POSTMASTERS IS INVITED TO THE NOTICE APPEARING IN POSTAL BULLETIN DATED NOVEMBER 5, 1935, ENTITLED "COAL CONTRACTS" AND APPLYING TO THE PURCHASE OF BITUMINOUS SEMIBITUMINOUS, OR LIGNITE COAL FOR USE IN QUARTERS RENTED OR LEASED TO THE DEPARTMENT FOR THE ACCOMMODATION OF POST OFFICES, STATIONS, BRANCHES, OR GARAGES.

THE SOLICITOR FOR THE DEPARTMENT HAS RULED THAT SUBSECTIONS (A) AND (B), OF PART II, SECTION 4, OF THE BITUMINOUS COAL CONSERVATION ACT RELATE TO THE PRODUCTION OF COAL RATHER THAN TO ITS PURCHASE, AND THAT THE ACT DOES NOT PREVENT THE AWARD OF A CONTRACT PROVIDING FOR DELIVERIES OVER A PERIOD IN EXCESS OF 30 DAYS. ACCORDINGLY, POSTMASTERS MAY ENTER INTO CONTRACTS FOR A SEASON'S SUPPLY OF COAL AS FORMERLY AND DELIVERIES NEED NOT BE LIMITED TO A PERIOD OF NOT EXCEEDING 30 DAYS.

THE SOLICITOR HAS FURTHER RULED THAT IT IS NOT INCUMBENT UPON CONTRACTING OFFICERS TO ASCERTAIN WHETHER PRICES HAVE BEEN ESTABLISHED AS PRESCRIBED BY SUBPARAGRAPH (E) PART II OF SECTION 4 OF THE ACT. UNDER THE LAW THE BURDEN IS UPON THE SELLER OF THE COAL NOT TO VIOLATE THE ACT IN THIS RESPECT. HOWEVER, IF IT SHOULD COME TO THE ATTENTION OF A POSTMASTER THAT A BID IS CONTRARY TO THIS PROVISION OF LAW, AWARD OF CONTRACT SHOULD NOT BE MADE, BUT THE FACTS SHOULD BE FULLY REPORTED TO THE DEPARTMENT.

POSTMASTERS WILL PLEASE TAKE NOTICE OF THE ABOVE INTERPRETATION OF THE BITUMINOUS COAL CONSERVATION ACT AND BE GOVERNED ACCORDINGLY.

FROM THE PORTION OF THE BULLETIN ABOVE QUOTED IT APPEARS THAT YOUR DEPARTMENT HAS ADOPTED THE OPINION OF YOUR SOLICITOR HOLDING, IN EFFECT:

(1) THAT SUBSECTIONS (A) AND (B) OF PART II, SECTION 4, OF THE BITUMINOUS COAL CONSERVATION ACT, 49 STAT. 995, 997, RELATE TO THE PRODUCTION OF COAL RATHER THAN TO ITS PURCHASE.

(2) THAT THE SAID ACT DOES NOT PREVENT THE AWARD OF A CONTRACT PROVIDING FOR DELIVERIES OVER A PERIOD IN EXCESS OF 30 DAYS.

(3) THAT IT IS NOT INCUMBENT UPON CONTRACTING OFFICERS TO ASCERTAIN WHETHER PRICES HAVE BEEN ESTABLISHED AS PRESCRIBED BY SUBSECTION (E) PART II OF SECTION 4 OF THE ACT, 49 STAT. 998.

WITH RESPECT TO VIEWS (1) AND (2), SUBSECTION (E), PART II OF SECTION 4 OF THE ACT, PROVIDES IN PART THAT:

FROM AND AFTER THE DATE OF APPROVAL OF THIS ACT, UNTIL PRICES SHALL HAVE BEEN ESTABLISHED PURSUANT TO SUBSECTIONS (A) AND (B) OF PART II OF THIS SECTION, NO CONTRACT FOR THE SALE OF COAL SHALL BE MADE PROVIDING FOR DELIVERY FOR A PERIOD LONGER THAN THIRTY DAYS FROM THE DATE OF THE CONTRACT.

IN CONSIDERING THIS PROVISION OF THE STATUTE UPON SUBMISSION OF A QUESTION RAISED THEREON BY THE ADMINISTRATOR OF VETERANS' AFFAIRS, THIS OFFICE HELD IN DECISION A-67598, DATED NOVEMBER 20, 1935 (PUBLISHED IN 15 COMP. GEN. 428), AS FOLLOWS:

THE STATUTE QUOTED IN YOUR LETTER OF NOVEMBER 12, 1935, HAVING PROHIBITED CONTRACTS FOR THE SALE OF COAL FOR A PERIOD LONGER THAN 30 DAYS FROM THE DATE OF THE CONTRACT UNTIL PRICES SHALL HAVE BEEN ESTABLISHED PURSUANT TO THE TERMS OF THE BITUMINOUS COAL CONSERVATION ACT OF 1935, THERE IS NO LEGAL BASIS FOR THE VETERANS' ADMINISTRATION TO CONTRACT FOR A LONGER PERIOD THAN 30 DAYS FOR THE PURCHASE OF SUCH COAL. WHILE SUCH CONTRACT MAY PROPERLY CONTAIN AN OPTION FOR RENEWAL TO BE EXERCISED AT THE END OF EACH 30 DAYS DURING THE BALANCE OF THE CURRENT FISCAL YEAR, IT WILL BE NECESSARY TO SHOW IN CONNECTION THEREWITH THAT THE EXERCISE OF THE OPTION WAS IN THE INTEREST OF THE UNITED STATES AND DOES NOT IMPOSE ON THE UNITED STATES ANY GREATER COST FOR THE COAL THAN IF OBTAINED UPON COMPETITIVE BIDS EACH 30-DAY PERIOD UNTIL THE PRICES OF COAL SHALL HAVE BEEN ESTABLISHED IN ACCORDANCE WITH SUBSECTIONS (A) AND (B) OF PART II, SECTION 4, OF THE BITUMINOUS COAL CONSERVATION ACT OF 1935.

THAT RULE MUST BE UNDERSTOOD AS RELATING ONLY TO PURCHASES FROM A PRODUCER. THERE IS NO INHIBITION IN THE LAW AGAINST PURCHASES FROM A DEALER WHO IS NOT A PRODUCER FOR A PERIOD LONGER THAN 30 DAYS.

WITH RESPECT TO VIEW (3), IT IS PERTINENT TO NOTE THE PROVISIONS OF SECTION 14 (A) OF THE ACT, 49 STAT. 1006, WHICH ARE AS FOLLOWS:

NO BITUMINOUS COAL SHALL BE PURCHASED BY THE UNITED STATES, OR ANY DEPARTMENT OR AGENCY THEREOF, PRODUCED AT ANY MINE, WHERE THE PRODUCER HAS NOT COMPLIED WITH THE PROVISIONS OF THE CODE SET OUT IN SECTION 4OF THIS ACT.

IN VIEW OF THE SPECIFIC TERMS OF THIS SECTION OF THE ACT NO BITUMINOUS COAL MAY BE PURCHASED BY THE UNITED STATES UNLESS SUCH COAL BE PRODUCED AT A MINE WHERE THE PRODUCER HAS COMPLIED WITH THE PROVISIONS OF THE CODE AS SET OUT IN SECTION 4 OF THE ACT. ACCORDINGLY ALL CONTRACTS FOR BITUMINOUS COAL SHOULD SHOW THE NAME AND ADDRESS OF THE PRODUCER OF SUCH COAL AND THERE SHOULD BE ATTACHED TO THE CONTRACTS A CERTIFICATE BY THE NATIONAL BITUMINOUS COAL COMMISSION THAT SUCH PRODUCER IS COMPLYING WITH THE CODE. SEE A-67002, JANUARY 2, 1936, 15 COMP. GEN. 577.

THE CARRYING OUT OF THE INSTRUCTIONS CONTAINED IN THAT PART OF THE POSTAL BULLETIN HEREINABOVE QUOTED, TO THE EXTENT THEY ARE IN CONFLICT WITH THE VIEWS HEREIN EXPRESSED, WILL NECESSARILY RESULT IN NUMEROUS SUSPENSIONS OR DISALLOWANCES OF CREDIT FOR PAYMENTS MADE UNDER SUCH CONTRACTS. THIS MATTER IS ACCORDINGLY BROUGHT TO YOUR ATTENTION FOR SUCH ADMINISTRATIVE ACTION AS MAY BE APPROPRIATE.

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