B-1153, FEBRUARY 24, 1939, 18 COMP. GEN. 677

B-1153, FEBRUARY 24, 1939, 18 COMP. GEN. 677

WORK RELIEF AND PUBLIC WORKS APPROPRIATION ACT OF 1938 - FUNDS TRANSFERRED FOR NAVAL ESTABLISHMENT PROJECTS - PURCHASES OF SUPPLIES AND PROCUREMENTS OF SERVICES - ADVERTISING AND FORMAL CONTRACT REQUIREMENTS THE ACT OF MARCH 2, 1907, 34 STAT. 1193, AUTHORIZING "THE PURCHASE OF SUPPLIES AND * * * SERVICES FOR * * * THE NAVAL SERVICE * * * IN OPEN MARKET IN THE MANNER COMMON AMONG BUSINESSMEN, WITHOUT FORMAL CONTRACT OR BOND, WHEN THE AGGREGATE OF THE AMOUNT REQUIRED DOES NOT EXCEED $500," HAVING BEEN SUPERSEDED AS TO FUNDS MADE AVAILABLE BY THE WORK RELIEF AND PUBLIC WORKS APPROPRIATION ACT OF 1938, 52 STAT. 809, AND TRANSFERRED FOR PROJECTS UNDER THE JURISDICTION OF THE NAVAL ESTABLISHMENT, BY THE PROVISIONS OF SECTION 18 OF THE SAID RELIEF ACT PERMITTING OPEN MARKET PURCHASES OR PROCUREMENT OF SERVICES ONLY WHERE THE AGGREGATE AMOUNT IS LESS THAN $300, PURCHASES OR PROCUREMENTS UNDER THE SAID TRANSFERRED FUNDS MAY BE MADE ONLY IN ACCORDANCE WITH THE 1907 ACT AS SO SUPERSEDED, THAT IS, WITHOUT FORMAL CONTRACT, WHEN THE AMOUNT DOES NOT EXCEED $500, BUT, WITHOUT ADVERTISING, ONLY WHEN THE AMOUNT IS LESS THAN $300.

ACTING COMPTROLLER GENERAL ELLIOTT TO THE SECRETARY OF THE NAVY, FEBRUARY 24, 1939:

I HAVE YOUR LETTER OF FEBRUARY 2, 1939 (JJ/L4/390116/S), AS FOLLOWS:

THE GENERAL ACCOUNTING OFFICE FORWARDED TO THE NAVY DEPARTMENT A PREAUDIT DIFFERENCE STATEMENT DATED SEPTEMBER 26, 1938, RETURNING VOUCHER NO. 57, DRAWN IN FAVOR OF ELMER S. ANDERSON ON SCHEDULE NO. 57 OF THE BUREAU OF YARDS AND DOCKS, NAVY DEPARTMENT, IN THE SUM OF $502.12, ON WHICH STATEMENT THE FOLLOWING NOTATION APPEARS:

"EMERGENCY RELIEF FUNDS TRANSFERRED FROM THE WORKS PROGRESS ADMINISTRATION TO ANOTHER AGENCY OF THE GOVERNMENT REMAIN SUBJECT TO THE OPEN-MARKET LIMITATION OF $300 AS PROVIDED IN SECTION 18 OF THE EMERGENCY RELIEF ACT OF 1938, 52 STAT. 809.

"SEE 16 COMP. GEN. 545; 17 ID. 73.'

SECTION 18 OF THE EMERGENCY RELIEF APPROPRIATION ACT OF 1938, APPROVED JUNE 21, 1938 (PUB.RES.NO. 122, 75TH CONGRESS), READS:

"THE PROVISIONS OF SECTION 3709 OF THE REVISED STATUTES (41 U.S.C., 5) SHALL NOT APPLY TO ANY PURCHASE MADE OR SERVICE PROCURED IN CONNECTION WITH THE FOREGOING APPROPRIATION WHEN THE AGGREGATE AMOUNT INVOLVED IS LESS THAN $300.'

THE PROCUREMENT DIVISION OF THE TREASURY DEPARTMENT, BY LETTER OF AUGUST 4, 1938 (COPY ATTACHED), DESIGNATED THE BUREAU OF SUPPLIES AND ACCOUNTS OF THE NAVY DEPARTMENT AS THE AGENCY TO PROCURE SUCH MATERIALS AS MAY BE REQUIRED IN CONNECTION WITH NAVY PROJECTS HERETOFORE AND HEREAFTER AUTHORIZED UNDER THE "WORK RELIEF AND PUBLIC WORKS APPROPRIATION ACT OF 1938.' THIS ACT PROVIDED FUNDS FOR VARIOUS PURPOSES UNDER SEVERAL TITLES, OF WHICH THE "EMERGENCY RELIEF APPROPRIATION ACT OF 1938," ABOVE MENTIONED, COMPRISED TITLE I.

THE WORK RELIEF AND PUBLIC WORKS APPROPRIATION ACT AUTHORIZED ALLOTMENT OF FUNDS PROVIDED THEREUNDER TO FINANCE FEDERAL PROJECTS WHICH FUNDS THUS ALLOTTED ARE EXPENDED BY THE VARIOUS DEPARTMENTS AND GOVERNMENTAL AGENCIES CONCERNED.

IN EXPENDING THE MONEYS MADE AVAILABLE FOR PROJECTS UNDER THE JURISDICTION OF THE NAVAL ESTABLISHMENT, THE NAVY DEPARTMENT HAS APPLIED THE FOLLOWING PROVISIONS OF THE ACT OF MARCH 2, 1907 (34 STAT. 1193; 34 U.S.C. SEC. 571):

"THE PURCHASE OF SUPPLIES AND THE PROCUREMENT OF SERVICES FOR ALL BRANCHES OF THE NAVAL SERVICE MAY BE MADE IN OPEN MARKET IN THE MANNER COMMON AMONG BUSINESSMEN, WITHOUT FORMAL CONTRACT OR BOND, WHEN THE AGGREGATE OF THE AMOUNT REQUIRED DOES NOT EXCEED $500, AND WHEN, IN THE OPINION OF THE PROPER ADMINISTRATIVE OFFICERS, SUCH LIMITATION OF AMOUNT IS NOT DESIGNED TO EVADE PURCHASE UNDER FORMAL CONTRACT OR BOND, AND EQUALLY OR MORE ADVANTAGEOUS TERMS CAN THEREBY BE SECURED.'

AS THE AUTHORITY GRANTED BY THE LAST-CITED ACT DID NOT RESTRICT ITS APPLICATION TO PURCHASES UNDER ANY SPECIFIC APPROPRIATION, BUT SPECIFICALLY INCLUDED THE PURCHASE OF SUPPLIES AND THE PROCUREMENT OF SERVICES FOR ALL BRANCHES OF THE NAVAL SERVICE, AND AS THE FUNDS ALLOTTED TO THE NAVY FROM THE APPROPRIATION MADE BY THE WORK RELIEF AND PUBLIC WORKS APPROPRIATION ACT OF 1938 ARE FOR THE PURCHASE OF SUPPLIES AND THE PROCUREMENT OF SERVICES FOR THE NAVAL SERVICE, THE 1907 ACT, SUPRA, HAS BEEN CONSTRUED AS APPLICABLE TO PURCHASES MADE BY THE NAVY CHARGEABLE TO THE FUNDS ALLOTTED FROM THE 1938 RELIEF ACT.

IN VIEW, HOWEVER, OF THE QUESTION RAISED BY THE AUDIT DIVISION OF THE GENERAL ACCOUNTING OFFICE, WITH REGARD TO VOUCHER NO. 57 IN FAVOR OF ELMER S. ANDERSON, YOUR DECISION IS REQUESTED AS TO WHETHER THE PURCHASE OF SUPPLIES OF THE CHARACTER HERE INVOLVED AND THE PROCUREMENT OF SERVICES CHARGEABLE TO FUNDS ALLOTTED FOR NAVY PROJECTS ARE GOVERNED BY SECTION 18 OF THE EMERGENCY RELIEF APPROPRIATION ACT OF 1938, OR BY THE ACT OF MARCH 2, 1907, ABOVE QUOTED. THE EXCESS OVER $500 AUTHORIZED BY THE 1907 ACT, SHOWN ON VOUCHER NO. 57, IS BEING TAKEN UP WITH THE PURCHASING AND VOUCHERING OFFICE.

AS OPEN-MARKET PURCHASES ARE BEING MADE CONTINUOUSLY BY NAVY FIELD PURCHASING OFFICES FOR MATERIALS CHARGEABLE TO THE ALLOTMENTS MADE TO THE NAVY UNDER THE EMERGENCY RELIEF APPROPRIATION ACT OF 1938 UP TO THE LIMITATION OF $500, AUTHORIZED BY THE 1907 ACT, THE FAVOR OF AN EARLY DECISION WILL BE APPRECIATED.

THE ACT OF MARCH 2, 1907, 34 STAT. 1193, QUOTED IN YOUR LETTER, HAS IN MANY INSTANCES BEEN CONSTRUED BY THE ACCOUNTING OFFICERS OF THE GOVERNMENT AS CONSTITUTING AN EXCEPTION TO THE PROVISIONS OF SECTIONS 3709 AND 3744, REVISED STATUTES. 17 COMP. GEN. 1066.

SECTION 18 OF THE EMERGENCY RELIEF APPROPRIATION ACT OF 1938, 52 STAT. 814, QUOTED IN YOUR LETTER, SPECIFICALLY EXEMPTING FROM THE REQUIREMENTS OF SECTION 3709, REVISED STATUTES, PURCHASES MADE OR SERVICES PROCURED WITH FUNDS MADE AVAILABLE BY SAID ACT WHEN THE AGGREGATE AMOUNT INVOLVED IS LESS THAN $300, DOES NOT ENTIRELY SUPERSEDE THE PROVISION IN THE ACT OF MARCH 2, 1907, INSOFAR AS THE USE OF FUNDS MADE AVAILABLE UNDER THE RELIEF ACT IS CONCERNED, BUT SUPERSEDES IT ONLY INSOFAR AS THERE MAY BE A CONFLICT. THE PRIMARY PURPOSE OF THE ACT OF MARCH 2, 1907, IS TO AUTHORIZE PURCHASES OF SUPPLIES AND THE PROCUREMENT OF SERVICES FOR ALL BRANCHES OF THE NAVAL SERVICE WHEN THE AGGREGATE AMOUNT DOES NOT EXCEED $500 WITHOUT A FORMAL CONTRACT AS REQUIRED BY SECTION 3744, REVISED STATUTES, AND IT AUTHORIZES SUCH PROCEDURE ONLY WHEN "EQUALLY OR MORE ADVANTAGEOUS TERMS CAN THEREBY BE SECURED.' WHILE A FORMAL CONTRACT IN SUCH INSTANCES IS NOT REQUIRED, IT IS UNDERSTOOD THAT IT IS THE PRACTICE OF THE NAVAL ESTABLISHMENT IN MAKING SUCH PURCHASES ON PROCURING SUCH SERVICES TO DETERMINE THE MOST ADVANTAGEOUS TERMS BY OBTAINING BIDS OR QUOTATIONS INFORMALLY. SECTION 18 OF THE 1938 ACT, SUPRA, SPECIFICALLY LIMITS TO LESS THAN $300 PURCHASES MADE OR SERVICES PROCURED WITH FUNDS MADE AVAILABLE UNDER SAID ACT WITHOUT REGARD TO SECTION 3709, SUPRA, AND TO THAT EXTENT THE SHOWING AS TO WHETHER EQUALLY OR MORE ADVANTAGEOUS TERMS CAN BE SECURED MAY BE DISPENSED WITH. HOWEVER, WHERE THE PURCHASES OR PROCUREMENTS UNDER FUNDS ALLOTTED FROM APPROPRIATIONS MADE IN THE EMERGENCY RELIEF APPROPRIATION ACT OF 1938 AGGREGATE $300 OR MORE BUT DO NOT EXCEED $500, WHILE A FORMAL CONTRACT IS NOT REQUIRED, THERE MUST BE COMPLIANCE WITH SECTION 3709 AS REGARDS ADVERTISING.

IF THE PROCEDURE IN THE NAVY DEPARTMENT HAS BEEN OTHERWISE THAN HEREIN INDICATED THE PROPER ADMINISTRATIVE ACTION SHOULD BE TAKEN TO CORRECT THE SAME.