A-80526, DECEMBER 11, 1936, 16 COMP. GEN. 575

A-80526, DECEMBER 11, 1936, 16 COMP. GEN. 575

ADVANCE PAYMENTS FOR INTERDEPARTMENTAL SERVICES - OBLIGATION LIMITATION ACT JUNE 22, 1936 - CONTRACTS INVOLVING WORK OR MATERIAL FUNDS ADVANCED BY GOVERNMENT AGENCIES TO THE NAVY DEPARTMENT FOR WORK OR MATERIAL PURSUANT TO TITLE VI, PART II, OF THE ACT OF JUNE 30, 1932, 47 STAT. 417, ARE AVAILABLE FOR OBLIGATION ONLY FOR THE PERIOD THE APPROPRIATION FROM WHICH SUCH ADVANCE PAYMENTS WERE MADE MAY BE AVAILABLE FOR OBLIGATION, NOTWITHSTANDING THE ISSUANCE OF PROJECT ORDERS PRIOR TO THE EXPIRATION OF THE PERIOD OF APPROPRIATION AVAILABILITY, THE PRIOR GENERAL STATUTE, AND SPECIAL STATUTES PARTICULARLY APPLICABLE TO THE NAVY DEPARTMENT, UNDER WHICH SUCH ADVANCES WERE TO BE CONSIDERED AS AVAILABLE UNTIL EXPENDED, HAVING BEEN MODIFIED BY SECTION 8 OF THE ACT OF JUNE 22, 1936, 49 STAT. 1648.

ACTING COMPTROLLER GENERAL ELLIOTT TO THE SECRETARY OF THE NAVY, DECEMBER 11, 1936:

THERE HAS BEEN CONSIDERED YOUR LETTER OF SEPTEMBER 8, 1936, AS FOLLOWS:

SECTION 8 OF THE FIRST DEFICIENCY ACT, FISCAL YEAR 1936, APPROVED JUNE 22, 1936, (PUBLIC, NO. 739, 74TH CONGRESS) PROVIDES THAT:

"AFTER JUNE 30, 1936, ADVANCE PAYMENTS UNDER THE PROVISIONS OF TITLE VI, PART II, OF THE LEGISLATIVE APPROPRIATION ACT FOR THE FISCAL YEAR 1933 SHALL HAVE NO LONGER PERIOD OF AVAILABILITY FOR OBLIGATION THAN THE APPROPRIATION FROM WHICH SUCH ADVANCE PAYMENTS ARE MADE.'

IN CONSTRUING THE ABOVE QUOTED PROVISION IN DECISION, A-76495, OF JUNE 24, 1936, TO THE ADMINISTRATOR, WORKS PROGRESS ADMINISTRATION, YOU HELD THAT---

"SAID PROVISION IS DIRECTED TO THE MATTER OF THE AVAILABILITY--- FOR OBLIGATING--- OF FUNDS ADVANCED PURSUANT TO TITLE VI, PART II, OF THE LEGISLATIVE APPROPRIATION ACT FOR THE FISCAL YEAR 1933, AND IT IS TO THE EFFECT THAT AFTER JUNE 30, 1936, THE FUNDS INVOLVED IN SUCH ADVANCE PAYMENTS SHALL BE AVAILABLE FOR OBLIGATING ONLY FOR THE PERIOD "THE APPROPRIATION FROM WHICH SUCH ADVANCE PAYMENTS ARE MADE" MAY BE AVAILABLE FOR OBLIGATING. THE INTENT OF THE LAW APPEARS CLEARLY TO BE THAT AT THE CLOSE OF BUSINESS ON JUNE 30, 1936, ALL FUNDS ADVANCED PURSUANT TO TITLE VI, PART II, OF THE ACT OF JUNE 30, 1932, 47 STAT. 417, CEASE TO BE AVAILABLE FOR OBLIGATING UNLESS THE APPROPRIATION FROM WHICH THE FUNDS WERE TAKEN IS, BY ITS TERMS, MADE AVAILABLE FOR OBLIGATING AFTER SAID DATE, IN WHICH EVENT THE FUNDS SO ADVANCED WILL CONTINUE AVAILABLE FOR OBLIGATING FOR THE SAME PERIOD FOR WHICH THE APPROPRIATION FROM WHICH TAKEN CONTINUES AVAILABLE FOR OBLIGATING.

IT WOULD SEEM THAT ADVANCES MADE SUBSEQUENTLY TO JUNE 30, 1936, WILL ALSO COME WITHIN THE PURVIEW OF THE ABOVE CITED ACT.

SECTION 601 OF THE LEGISLATIVE APPROPRIATION ACT FOR THE FISCAL YEAR 1933, APPROVED 30 JUNE 1932 (47 STAT. 417; 31 U.S.C., SEC. 686), PROVIDES THAT ADVANCE PAYMENTS MAY BE MADE PURSUANT TO ORDERS PLACED BY AN EXECUTIVE DEPARTMENT OR INDEPENDENT ESTABLISHMENT OR ANY BUREAU OR OFFICE THEREOF WITH ANY OTHER DEPARTMENT, ESTABLISHMENT, BUREAU, OR OFFICE.

THE ACT OF 5 JUNE 1920 (41 STAT. 975; 41 U.S.C., SEC. 23), READS:

"ALL ORDERS OR CONTRACTS FOR THE MANUFACTURE OF MATERIAL PERTAINING TO APPROVED PROJECTS PLACED BEFORE JUNE 5, 1920, OR THEREAFTER WITH GOVERNMENT-OWNED ESTABLISHMENTS SHALL BE CONSIDERED AS OBLIGATIONS IN THE SAME MANNER AS PROVIDED FOR SIMILAR ORDERS PLACED WITH COMMERCIAL MANUFACTURERS, AND THE APPROPRIATIONS SHALL REMAIN AVAILABLE FOR THE PAYMENT OF THE OBLIGATIONS SO CREATED AS IN THE CASE OF CONTRACTS OR ORDERS WITH COMMERCIAL MANUFACTURERS.'

THE NAVAL APPROPRIATION ACT OF 1 JULY 1922 (42 STAT. 812) CONTAINS THE FOLLOWING PROVISION TO LIKE EFFECT:

"THAT ALL ORDERS OR CONTRACTS FOR WORK OR MATERIAL, UNDER AUTHORIZATION OF LAW HERETOFORE OR HEREAFTER PLACED WITH GOVERNMENT OWNED ESTABLISHMENTS, SHALL BE CONSIDERED AS OBLIGATIONS IN THE SAME MANNER AS PROVIDED FOR SIMILAR ORDERS OR CONTRACTS PLACED WITH PRIVATE CONTRACTORS, AND APPROPRIATIONS FOR SUCH WORK OR MATERIAL SHALL REMAIN AVAILABLE FOR PAYMENT THEREFOR AS IN THE CASE OF ORDERS OR CONTRACTS PLACED WITH PRIVATE CONTRACTORS.'

IT WOULD SEEM, THEREFORE, THAT PRIOR TO THE ENACTMENT OF THE FIRST DEFICIENCY APPROPRIATION ACT, FISCAL YEAR 1936, WHEN AN ORDER WAS PLACED WITH THE NAVY BY ANOTHER DEPARTMENT OF THE GOVERNMENT, THE NECESSARY FUNDS TO COVER THE ORDER THAT WERE REPRESENTED BY THE ADVANCE PAYMENT, WERE THEREBY OBLIGATED AND IN ACCORDANCE WITH THE PROVISIONS OF SECTION 601 OF THE LEGISLATIVE APPROPRIATION ACT, FISCAL YEAR 1933, REMAINED AVAILABLE TO MEET SUCH OBLIGATION UNTIL EXPENDED. HOWEVER, SECTION 8 OF THE FIRST DEFICIENCY APPROPRIATION ACT, FISCAL YEAR 1936, WOULD APPEAR TO PROHIBIT THE SUBSEQUENT OBLIGATION OF ADVANCE PAYMENTS BY THE RECEIVING DEPARTMENT, ESTABLISHMENT, BUREAU, OR OFFICE, UNLESS THE APPROPRIATION FROM WHICH THE ADVANCE PAYMENT IS MADE IS SIMULTANEOUSLY AVAILABLE FOR OBLIGATION.

IF SUCH IS THE INTERPRETATION GIVEN TO THE LAST-MENTIONED LEGISLATION, THEN IT BECOMES NECESSARY TO OBLIGATE ALL ADVANCE PAYMENTS WHILE THE APPROPRIATION INVOLVED REMAINS AVAILABLE FOR OBLIGATION IF THE ADVANCE PAYMENT IS TO ACCOMPLISH THE PURPOSE FOR WHICH IT WAS MADE. IN THE CASE OF CONTRACTS WITH COMMERCIAL CONCERNS, DEFINITE OBLIGATIONS CAN THUS BE SET UP ASSUMING THAT SUFFICIENT TIME IS AVAILABLE IN WHICH TO EXECUTE THE NECESSARY CONTRACTS.

HOWEVER, MANY OF THESE ADVANCE PAYMENTS COVER WORK TO BE DONE IN NAVY YARDS AND WILL BE USED IN PAYING FOR THE NECESSARY LABOR AND FOR MATERIAL TO BE DRAWN FROM STORE. THE QUESTION, THEREFORE, ARISES AS TO WHETHER OR NOT IN THE CASE OF AN ADVANCE PAYMENT MADE UNDER THE PROVISIONS OF SECTION 601 OF THE ACT OF 30 JUNE 1932, WHICH INVOLVES YARD WORK, AN OBLIGATION WITHIN THE MEANING OF SECTION 8 OF THE ACT OF 22 JUNE 1936 CAN BE SET UP BY THE ISSUANCE OF AN ORDER TO THE YARDS CONCERNED TO PERFORM THE WORK UNDER THE AUTHORITY OF THE ACT OF 1 JULY 1922, SUPRA, WHICH ALSO PROVIDES THAT SUCH ORDERS SHALL BE CONSIDERED AS OBLIGATIONS.

AN EXTREMELY IMPORTANT CASE IN POINT IS THE ADVANCE OF FUNDS RECEIVED FROM THE COAST GUARD TO COVER THE CONSTRUCTION OF CERTAIN VESSELS. THESE FUNDS WERE ADVANCED UNDER THE PROPRIATION,"NATIONAL INDUSTRIAL RECOVERY, 1933-1937," AND THIS APPROPRIATION, UNLESS EXTENDED BY FUTURE LEGISLATION, WILL NOT BE AVAILABLE FOR OBLIGATION AFTER JUNE 30, 1937. THE VESSELS ARE BEING CONSTRUCTED AT NAVY YARDS AND THE NECESSARY EXPENDITURES FOR THEIR CONSTRUCTION MAY POSSIBLY NOT BE CONCLUDED BY JUNE 30, 1937. IF THE NAVY DEPARTMENT MAY ISSUE PROJECT ORDERS UNDER THE AUTHORITY CONTAINED IN THE ACT OF 1 JULY 1922, WHICH WILL PERMIT EXPENDITURES FOR YARD WORK AFTER 30 JUNE 1937, THE SITUATION CAN BE EASILY MET BY ISSUING APPROPRIATE PROJECT ORDERS. IF, HOWEVER, IT SHOULD BE HELD BY THE ACCOUNTING OFFICERS THAT SUCH PROJECT ORDERS WOULD NOT BE OBLIGATIONS WITHIN THE MEANING OF SECTION 8 OF THE ACT OF 22 JUNE 1936, THEN IT WILL BE NECESSARY TO SUBMIT THE MATTER FOR THE CONSIDERATION OF THE CONGRESS AT AS EARLY A DATE AT THE NEXT SESSION AS PRACTICABLE.

IN ORDER THAT THE NAVY DEPARTMENT MAY BE IN A POSITION TO DETERMINE THE APPROPRIATE ACTION TO BE TAKEN IN THIS CASE AND IN OTHER CASES THAT ARE LIKELY TO ARISE IN THE FUTURE, YOUR DECISION IS REQUESTED AS TO WHETHER OR NOT IN THE CASE OF AN ADVANCE PAYMENT MADE UNDER SECTION 601 OF THE LEGISLATIVE APPROPRIATION ACT, FISCAL YEAR 1933, WHICH INVOLVES YARD WORK, AN OBLIGATION WITHIN THE MEANING OF SECTION 8 OF THE FIRST DEFICIENCY APPROPRIATION ACT, FISCAL YEAR 1936, CAN BE SET UP BY THE ISSUANCE OF PROJECT ORDERS TO THE YARDS CONCERNED TO PERFORM THE WORK UNDER THE AUTHORITY GRANTED BY THE NAVAL APPROPRIATION ACT OF 1 JULY 1922.

BY THE PROVISIONS OF TITLE VI, PART II, OF THE LEGISLATIVE APPROPRIATION ACT FOR 1933, 47 STAT. 417, ORDERS PLACED WITH GOVERNMENT-OWNED ESTABLISHMENTS FOR WORK OR MATERIAL WERE TO BE CONSIDERED AS OBLIGATIONS, AS WAS ALSO PROVIDED BY THE ACTS OF JUNE 5, 1920, 41 STAT. 975, AND JULY 1, 1922, 42 STAT. 812, AND WHERE ADVANCE PAYMENTS WERE MADE AND CREDITED TO SPECIAL WORKING FUNDS, SUCH ADVANCES WERE TO REMAIN AVAILABLE UNTIL EXPENDED.

HOWEVER, UNDER THE TERMS OF SECTION 8 OF THE ACT OF JUNE 22, 1936, 49 STAT. 1648, THERE IS PLACED A LIMITATION ON THE TIME IN WHICH AN ADVANCE OF FUNDS MAY BE OBLIGATED, IN THAT ADVANCE PAYMENTS UNDER THE PROVISIONS OF TITLE VI, PART II, OF THE LEGISLATIVE APPROPRIATION ACT FOR THE FISCAL YEAR 1933 SHALL HAVE NO LONGER PERIOD OF AVAILABILITY FOR OBLIGATION THAN THE APPROPRIATION UNDER WHICH SUCH ADVANCE PAYMENTS ARE MADE. THE ACT OF JUNE 22, 1936, MOST NECESSARILY, THEREFORE, BE CONSIDERED AS MODIFYING PRIOR LEGISLATION IN THAT THE ADVANCING OF FUNDS ACTS MERELY TO EARMARK SUCH FUNDS FOR THE PURPOSE FOR WHICH TRANSFERRED, SO THAT FUNDS CREDITED TO WORKING FUNDS MAY BE CHARGED ONLY WITH OBLIGATIONS LEGALLY INCURRED DURING THE PERIOD OF THE AVAILABILITY OF THE APPROPRIATION FROM WHICH THE FUNDS WERE TAKEN.

AS STATED IN THE DECISION OF JUNE 24, 1936, A-76495, 15 COMP. GEN. 1125, SECTION 8 OF SAID ACT OF JUNE 22, 1936, GOES TO THE MATTER OF THE AVAILABILITY--- FOR OBLIGATING PURPOSES--- OF THE FUNDS ADVANCED PURSUANT TO TITLE VI, PART II, OF THE 1932 ACT, SUPRA, THE EFFECT THEREOF BEING THAT AFTER JUNE 30, 1936, FUNDS INVOLVED IN SUCH ADVANCE PAYMENTS SHALL BE AVAILABLE FOR OBLIGATING ONLY FOR THE PERIOD "THE APPROPRIATION FROM WHICH SUCH ADVANCE PAYMENTS ARE MADE" MAY BE AVAILABLE FOR OBLIGATING. ACCORDINGLY, I HAVE TO ADVISE THAT THE ISSUING OF PROJECT ORDERS BY THE NAVY DEPARTMENT TO NAVY YARDS OR OTHER GOVERNMENT AGENCY UNDER THE NAVY DEPARTMENT MAY NOT BE CONSIDERED AS CONSTITUTING SUCH OBLIGATIONS AS ARE CONTEMPLATED BY SECTION 8 OF THE ACT OF 1936.