B-115794, JULY 21, 1953, 33 COMP. GEN. 45

B-115794, JULY 21, 1953, 33 COMP. GEN. 45

FEES - REGISTRATION - REFUNDS WHILE FEES IMPROPERLY COLLECTED THROUGH FAULT OR NEGLIGENCE OF OFFICERS OR EMPLOYEES OF THE GOVERNMENT MAY BE REFUNDED, A REGISTRATION FEE PAID BY A COMPANY AS A MANUFACTURER OF ARMS, AMMUNITION, AND IMPLEMENTS OF WAR AS REQUIRED BY SECTION 12 OF THE NEUTRALITY ACT OF 1939, BUT WHOSE ACTIVITIES WERE LIMITED TO RESEARCH AND DEVELOPMENT OF SUCH ITEMS WHICH WERE EXEMPT FROM THE REGISTRATION REQUIREMENTS OF SECTION 12, A FACT NOT MADE KNOWN IN THE COMPANY'S APPLICATIONS FOR REGISTRATIONS, MAY NOT BE REFUNDED.

ACTING COMPTROLLER GENERAL FISHER TO THE SECRETARY OF STATE, JULY 21, 1953:

REFERENCE IS MADE TO YOUR LETTER OF JUNE 12, 1953, WITH ENCLOSURES REQUESTING TO BE ADVISED WHETHER THERE PROPERLY MAY BE REFUNDED TO THE H. A. WAGNER CO., A REGISTRATION FEE OF $100 PAID BY SAID COMPANY AS A MANUFACTURER OF ARMS, AMMUNITION AND IMPLEMENTS OF WAR UNDER THE PROVISIONS OF SECTION 12 OF THE JOINT RESOLUTION OF CONGRESS, APPROVED NOVEMBER 4, 1939, 54 STAT. 10 (22 U.S.C. 452).

THE SUPPORTING PAPERS SHOW THAT APPLICATION FOR REGISTRATION TOGETHER WITH A MONEY ORDER FOR $100 WAS FILED BY THE COMPANY ON AUGUST 19, 1952; THAT A CERTIFICATE OF REGISTRATION NO. 3531 WAS ISSUED TO THE APPLICANT ON AUGUST 27, 1952, VALID FOR 5 YEARS; AND THAT THE PROCEEDS OF THE MONEY ORDER WERE COVERED INTO THE TREASURY AS MISCELLANEOUS RECEIPTS. BY LETTER OF APRIL 6, 1953, THE COMPANY RAISED THE QUESTION AS TO WHETHER IT WAS REQUIRED TO REGISTER SINCE ITS ACTIVITY IS LIMITED TO PRODUCTION, RESEARCH AND DEVELOPMENT. SPECIFICALLY, THE COMPANY WHICH IS REPORTED INFORMALLY PRESENTLY TO BE ENGAGED IN RESEARCH AND DEVELOPMENT WORK UNDER THREE CONTRACTS WITH THE DEPARTMENT OF THE NAVY STATED THAT ITS APPLICATION FOR A CERTIFICATE OF REGISTRATION WAS DUE TO PROVISION NO. 23 OF GENERAL PROVISIONS COST TYPE CONTRACTS NAVAER 2805 ( NEW 1-52), WHICH IS AS FOLLOWS:

23. NEUTRALITY ACT OF 1939.--- IF ANY OF THE SUPPLIES TO BE DELIVERED UNDER THIS CONTRACT ARE ARMS, AMMUNITION, OR IMPLEMENTS OF WAR, AS LISTED IN THE CURRENT PROCLAMATION ISSUED BY THE PRESIDENT PURSUANT TO THE NEUTRALITY ACT OF 1939 (22 U.S.C. 452), THE CONTRACTOR EITHER (I) REPRESENTS THAT IT IS PROPERLY REGISTERED UNDER SAID ACT AND AGREES TO FURNISH SATISFACTORY EVIDENCE THEREOF UPON REQUEST, OR (II) REPRESENTS THAT IT IS NOT SUBJECT TO SAID ACT AND AGREES TO FURNISH SATISFACTORY EVIDENCE THEREOF UPON REQUEST.

FURTHER, IT IS STATED THAT A QUESTION NOW HAS ARISEN AS TO THE ALLOWABILITY OF THE PRO RATA PORTION OF THE $100 FEE UNDER COST-PLUS-A FIXED-FEE BECAUSE OF SECTION 201.7 OF MD BULLETIN NO. 1, DATED APRIL 1, 1948 (22 CFR 75.7); THAT THE NATURE OF THE COMPANY'S ACTIVITY IS AS STATED IN ITS APPLICATION, NAMELY RESEARCH AND DEVELOPMENT WHICH INCLUDES THE CONSTRUCTION OF EXPERIMENTAL OR TEST MODELS; AND THAT SUCH MODELS ARE IN A SENSE SOLD TO THE GOVERNMENT UNDER THE COST-PLUS-A FIXED-FEE CONTRACT AS THEY MUST BE DELIVERED TO THE GOVERNMENT.

SECTION 75.7, TITLE 22, CODE OF FEDERAL REGULATIONS REFERRED TO ABOVE GOVERNING REGISTRATION AND LICENSING UNDER SAID SECTION 12 OF THE JOINT RESOLUTION PROVIDES, AS FOLLOWS:

75.7. PRODUCTION FOR EXPERIMENTAL OR SCIENTIFIC PURPOSE. THE PRODUCTION FOR EXPERIMENTAL OR SCIENTIFIC PURPOSES, WHEN SUCH PRODUCTION IS NOT FOLLOWED BY SALE, OF THE APPLIANCES AND SUBSTANCES INCLUDED IN CATEGORY VI OF THE PRESIDENT'S PROCLAMATION 2776 OF MARCH 26, 1948, OR OF SINGLE UNITS OF OTHER ARMS, AMMUNITION AND IMPLEMENTS OF WAR, IS NOT CONSIDERED AS MANUFACTURE FOR THE PURPOSES OF SECTION 12 OF THE JOINT RESOLUTION.

IN CONNECTION WITH THE ABOVE REGULATION, YOU STATE THAT IF THE COMPANY HAD STATED IN ITS APPLICATION THAT ITS ACTIVITIES WERE LIMITED TO RESEARCH AND DEVELOPMENT WITH RESPECT TO THE ITEMS CONSIDERED ARMS, AMMUNITION AND IMPLEMENTS OF WAR OR THEN HAD BROUGHT THE QUESTION TO THE DEPARTMENT'S ATTENTION, THE FEE WOULD HAVE BEEN RETURNED TO THE APPLICANT WITH THE ADVICE THAT REGISTRATION WOULD NOT BE REQUIRED.

IT IS EXPRESSLY STATED ON THE FACE OF THE APPLICATION THAT IT IS "FOR REGISTRATION OF PERSONS ENGAGED IN THE BUSINESS OF MANUFACTURING, EXPORTING, OR IMPORTING ARMS, AMMUNITION, OR IMPLEMENTS OF WAR, PURSUANT TO SECTION 12 OF THE JOINT RESOLUTION OF CONGRESS APPROVED BY THE PRESIDENT NOVEMBER 4, 1939.' WHILE IN RESPONSE TO THE INSTRUCTIONS UNDER PARAGRAPH 9 (A) OF THE APPLICATION FOR A BRIEF DESCRIPTION OF THE TYPES OF BUSINESS CONDUCTED, THE APPLICANT STATED THAT IT WAS ENGAGED IN ENGINEERING RESEARCH AND DEVELOPMENT OF GUIDANCE SYSTEMS FOR MISSILES UNDER PARAGRAPH 9 (B) IN RESPONSE TO A REQUEST FOR A LIST OF SPECIFIC ARTICLES ENUMERATED IN THE CURRENTLY EFFECTIVE PROCLAMATION OF THE PRESIDENT DEFINING ARMS, AMMUNITION AND IMPLEMENTS OF WAR WHICH ARE MANUFACTURED BY THE APPLICANT, IT LISTED THREE ITEMS.

THE GENERAL RULE IS THAT FEES IMPROPERLY COLLECTED AS THE RESULT OF FAULT OR NEGLIGENCE ON THE PART OF OFFICERS OR EMPLOYEES OF THE GOVERNMENT MAY BE REFUNDED. 23 COMP. GEN. 417; 29 ID. 27 AND CITED DECISIONS. THERE WAS NO FAULT OR NEGLIGENCE ON THE PART OF THE OFFICER WHO ISSUED THE CERTIFICATE OF REGISTRATION. THE FAULT WAS DUE TO THE FAILURE OF THE APPLICANT TO FULLY INFORM SUCH OFFICER AS TO THE NATURE AND EXTENT OF ITS ACTIVITIES. UNDER THE CIRCUMSTANCES, REFUND OF THE FEE IS NOT AUTHORIZED. 16 COMP. GEN. 235, 10 ID. 220.