B-148130, APRIL 18, 1962, 41 COMP. GEN. 677

B-148130, APRIL 18, 1962, 41 COMP. GEN. 677

MILITARY PERSONNEL - RETIRED - CONTRACTING WITH GOVERNMENT - WHAT CONSTITUTES SELLING A CONTRACT NEGOTIATED BY A RETIRED OFFICER OF THE UNIFORMED SERVICES FOR THE COMMERCIAL PACKING, CRATING, DRAYAGE, STORAGE, UNPACKING AND TRANSPORTATION OF HOUSEHOLD EFFECTS OF DEPARTMENT OF DEFENSE PERSONNEL WHICH DOES NOT INVOLVE THE TRANSFER OF OWNERSHIP OF THE PROPERTY TO THE GOVERNMENT IS NOT A CONTRACT OF SALE BUT IS A CONTRACT FOR THE PERFORMANCE OF SERVICES ONLY SO THAT A RETIRED OFFICER WHO CONTRACTS OR NEGOTIATES FOR THE COMMERCIAL TRANSPORTATION OF HOUSEHOLD EFFECTS OF DEPARTMENT OF DEFENSE PERSONNEL IS NOT ENGAGED IN THE SELLING OR SALE OF SUPPLIES OR MATERIALS TO BE PRECLUDED FROM RECEIVING RETIRED PAY BY 5 U.S.C. 59C AND 10 U.S.C. 6112 (B).

TO THE SECRETARY OF DEFENSE, APRIL 18, 1962:

REFERENCE IS MADE TO LETTER OF FEBRUARY 1, 1962, FROM THE ASSISTANT SECRETARY OF DEFENSE ( COMPTROLLER) REQUESTING A DECISION AS TO WHETHER COMMERCIAL PACKING, CRATING, DRAYAGE, STORAGE, UNCRATING, UNPACKING, AND COMMERCIAL TRANSPORTATION OF HOUSEHOLD GOODS OF PERSONNEL OF THE DEPARTMENT OF DEFENSE ARE TO BE CONSIDERED "SUPPLIES" WITHIN THE MEANING OF EXISTING STATUTES PROHIBITING THE PAYMENT OF RETIRED PAY TO OFFICERS OF THE UNIFORMED SERVICES WHO FOR A PERIOD OF 2 YEARS AFTER RETIREMENT ENGAGE IN SELLING "SUPPLIES" TO AGENCIES OF THE UNIFORMED SERVICES. THERE WAS ENCLOSED WITH THE LETTER OF FEBRUARY 1, 1962, A COPY OF COMMITTEE ACTION NO. 298 OF THE MILITARY PAY AND ALLOWANCE COMMITTEE, DEPARTMENT OF DEFENSE, DISCUSSING THE QUESTION PRESENTED.

THE PERTINENT STATUTORY PROVISIONS ARE PRESENTLY CODIFIED IN 5 U.S.C. 59C AND 10 U.S.C. 6112 (B). SECTION 59C OF TITLE 5, U.S.C. PROVIDES AS FOLLOWS:

NO PAYMENT SHALL BE MADE FROM APPROPRIATIONS IN ANY ACT TO ANY OFFICER ON THE RETIRED LISTS OF THE REGULAR ARMY, REGULAR NAVY, REGULAR MARINE CORPS, REGULAR AIR FORCE, REGULAR COAST GUARD, COAST AND GEODETIC SURVEY, AND PUBLIC HEALTH SERVICE FOR A PERIOD OF TWO YEARS AFTER RETIREMENT WHO FOR HIMSELF OR FOR OTHERS IS ENGAGED IN THE SELLING OF OR CONTRACTING FOR THE SALE OF OR NEGOTIATING FOR THE SALE OF TO ANY AGENCY OF THE DEPARTMENT OF DEFENSE, THE COAST GUARD, THE COAST AND GEODETIC SURVEY, AND THE PUBLIC HEALTH SERVICE ANY SUPPLIES OR WAR MATERIALS.

SECTION 6112 (B) OF TITLE 10, U.S.C. PROVIDES:

IF A RETIRED OFFICER OF THE REGULAR NAVY OR THE REGULAR MARINE CORPS IS ENGAGED FOR HIMSELF OR OTHERS IN SELLING, OR CONTRACTING OR NEGOTIATING TO SELL, NAVAL SUPPLIES OR WAR MATERIALS TO THE DEPARTMENT OF THE NAVY, HE IS NOT ENTITLED TO ANY PAYMENT FROM THE UNITED STATES WHILE HE IS SO ENGAGED.

THERE IS FOR NOTING THAT SECTION 59C OF TITLE 5 PROHIBITS THE PAYMENT OF RETIRED PAY TO RETIRED REGULAR OFFICERS OF ALL THE SERVICES FOR A PERIOD OF 2 YEARS AFTER RETIREMENT IF FOR THEMSELVES OR FOR OTHERS THEY ENGAGE IN SELLING ANY SUPPLIES OR WAR MATERIALS TO ANY AGENCY OF THE DEPARTMENT OF DEFENSE, THE COAST GUARD, THE COAST AND GEODETIC SURVEY, OR THE PUBLIC HEALTH SERVICE, WHILE SECTION 6112 (B) OF TITLE 10 PROHIBITS, WITHOUT LIMITATION AS TO TIME, THE PAYMENT OF RETIRED PAY TO A RETIRED OFFICER OF THE REGULAR NAVY OR THE REGULAR MARINE CORPS WHILE HE IS ENGAGED FOR HIMSELF OR OTHERS IN SELLING NAVAL SUPPLIES OR WAR MATERIALS TO THE DEPARTMENT OF THE NAVY.

THE RIGHTS OF AN EMPLOYEE OF THE DEPARTMENT OF DEFENSE OR A MEMBER OF THE ARMED FORCES TO HAVE HIS HOUSEHOLD EFFECTS TRANSPORTED AT GOVERNMENT EXPENSE ARE GOVERNED, RESPECTIVELY, BY SECTION 1 OF THE ADMINISTRATIVE EXPENSES ACT OF 1946, AS AMENDED, 5 U.S.C. 73B-1, AND EXECUTIVE ORDER NO. 9805, AS AMENDED, PROMULGATED THEREUNDER, AND BY SECTION 303 (C) OF THE CAREER COMPENSATION ACT OF 1949, AS AMENDED, 37 U.S.C. 253 (C), AND THE PROVISIONS OF THE JOINT TRAVEL REGULATIONS ISSUED PURSUANT THERETO. NEITHER THE STATUTES NOR THE REGULATIONS PURPORT TO MAKE THE GOVERNMENT THE OWNER OF THE GOODS. THE EFFECTS ARE THE PERSONAL PROPERTY OF THE INDIVIDUALS INVOLVED AND THEY ARE UNDER NO LEGAL OBLIGATION OR DUTY TO TURN THEIR GOODS OVER TO THE GOVERNMENT FOR SHIPMENT. IF THEY DO SO FROM CHOICE TO RELIEVE THEMSELVES OF THE BURDEN OF MAKING THE NECESSARY ARRANGEMENTS WITH A COMMERCIAL CARRIER AND PAYING THE TRANSPORTATION COSTS, THE GOVERNMENT MERELY UNDERTAKES TO MAKE SUCH SHIPMENT UPON THE SAME BASIS AS IT WOULD ITS OWN PROPERTY, THAT IS, BY A GOVERNMENT BILL OF LADING. UNDER SUCH CIRCUMSTANCES THE GOVERNMENT WOULD APPEAR AT MOST ONLY A BAILEE OF THE PROPERTY. SUCH PROPERTY MAY NOT LEGALLY BE VIEWED AS THE PROPERTY OF THE GOVERNMENT DURING TRANSPORTATION. SEE OREGON-1WASHINGTON RAILROAD AND NAVIGATION COMPANY V. UNITED STATES, 255 U.S. 339, AND UNITED STATES V. GALVESTON, HARRISBURG AND SAN ANTONIO RAILWAY COMPANY, 279 U.S. 401, HOLDING THAT THE GOVERNMENT WAS NOT ENTITLED TO LAND GRANT REDUCTIONS ON SHIPMENTS OF OFFICER'S EFFECTS AND PRIVATE MOUNTS TRANSPORTED AT GOVERNMENT EXPENSE BECAUSE THE PROPERTY WAS NOT THAT OF THE UNITED STATES.

WHILE, AS POINTED OUT IN OUR DECISIONS OF NOVEMBER 7, 1940, B-12238, AND OF JANUARY 6, 1959, B-137231, 38 COMP. GEN. 470, REFERRED TO IN COMMITTEE ACTION NO. 298, THE LEGISLATIVE HISTORIES OF THE PROVISIONS OF 5 U.S.C. 59C AND 10 U.S.C. 6112 (B) DO NOT DISCLOSE THE PRECISE INTENT OF THE TERMS USED IN THE STATUTES, THE WORDS "SALE" OR "SELLING" HAVE CLEARLY DEFINED MEANINGS. WEBSTER'S NEW INTERNATIONAL DICTIONARY ( SECOND EDITION) DEFINES THE TERM "SALE" AS " ACT OF SELLING; A CONTRACT WHEREBY THE ABSOLUTE, OR GENERAL, OWNERSHIP OF PROPERTY IS TRANSFERRED FROM ONE PERSON OR ANOTHER FOR A PRICE, OR SUM OF MONEY, OR, LOOSELY, FOR ANY CONSIDERATION; ALSO A CONTRACT FOR SUCH TRANSFER OF OWNERSHIP IN THE FUTURE OR UPON THE FUTURE FULFILLMENT OF SOME CONDITION * * *.' " SALE" IS A WORD OF PRECISE LEGAL IMPORT BOTH AT LAW AND IN EQUITY, AND HAS BEEN SAID TO MEAN, AT ALL TIMES, A CONTRACT BETWEEN PARTIES TO GIVE AND TO PASS RIGHTS OF PROPERTY FOR MONEY, WHICH THE BUYER PAYS OR PROMISES TO PAY TO THE SELLER FOR THE THING BOUGHT AND SOLD. BLACK'S LAW DICTIONARY, CITING CASE INCLUDING BUTLER V. THOMSON, ET AL., 92 U.S. 414 (412), AND IOWA V. MCFARLAND, 110 U.S. 471, DEFINES "SALES" AS "A CONTRACT BETWEEN TWO PARTIES, CALLED, RESPECTIVELY, THE "SELLER" (OR VENDOR) AND THE "BUYER," (OR PURCHASER), BY WHICH THE FORMER, IN CONSIDERATION OF THE PAYMENT OR PROMISE OF PAYMENT OF A CERTAIN PRICE IN MONEY, TRANSFERS TO THE LATTER THE TITLE AND THE POSSESSION OF PROPERTY.' A SALE, IN THE USUAL SENSE OF THE TERM, IS A TRANSFER OF PROPERTY FROM ONE PERSON TO ANOTHER FOR A FIXED SUM OF MONEY OR OTHER VALUABLE CONSIDERATION. SINCE THE TERMS RELATING TO "SALE" AS USED IN 5 U.S.C. 59C AND 10 U.S.C. 6112 (B) HAVE SPECIFIC REFERENCE TO MATERIALS AND SUPPLIES, IT SEEMS CLEAR THAT SUCH TERMS WERE USED IN THEIR ORDINARY SENSE OF A SALE OF GOODS IN THOSE STATUTES. SEE 38 COMP. GEN. 470; 39 COMP. GEN. 366; AND THE DEFINITION OF SELLING SET OUT ON PAGE 15 OF THE REPORT OF THE SUBCOMMITTEE FOR SPECIAL INVESTIGATIONS OF THE COMMITTEE ON ARMED SERVICES, HOUSE OF REPRESENTATIVES, 86TH CONGRESS, UNDER AUTHORITY OF H. RES. 19 ON EMPLOYMENT OF RETIRED COMMISSIONED OFFICERS BY DEFENSE DEPARTMENT CONTRACTORS.

A CONTRACT BETWEEN A CONCERN AND THE GOVERNMENT FOR THE COMMERCIAL PACKING, CRATING, DRAYAGE, STORAGE, UNCRATING, UNPACKING, AND COMMERCIAL TRANSPORTATION OF HOUSEHOLD GOODS OF DEPARTMENT OF DEFENSE PERSONNEL AND ALL SUCH SERVICES WHICH COULD ORDINARILY BE REQUIRED OF A COMMON CARRIER IN CONNECTION WITH THE TRANSPORTATION OF PROPERTY FROM ONE PLACE TO ANOTHER IS NOT GENERALLY CONSIDERED AS COMING WITHIN THE FOREGOING DEFINITION OF A "SALE.' UNDER THE UNIFORM SALES ACT, CONTRACTS FOR THE PAYMENT OF SERVICES RENDERED AND MATERIAL USED IN THE ACTIVITY OF RENDERING SUCH SERVICES ARE NOT CONTRACTS FOR THE SALE OF GOODS. IT SEEMS CLEAR, THEREFORE, THAT IN CASES SUCH AS HERE CONSIDERED WHICH DO NOT INVOLVE THE TRANSFER OF OWNERSHIP OF PROPERTY TO THE GOVERNMENT, THE CONTRACT IS FOR THE PERFORMANCE OF SERVICES ONLY AND THERE HAS BEEN NO "SALE" OF MATERIALS OR SUPPLIES IN ANY SENSE OF THAT TERM.

ACCORDINGLY, WE ARE OF THE OPINION THAT RETIRED OFFICERS WHO NEGOTIATE OR CONTRACT FOR THE COMMERCIAL PACKING, CRATING, DRAYAGE, STORAGE, UNCRATING, UNPACKING, AND COMMERCIAL TRANSPORTATION OF HOUSEHOLD GOODS OF PERSONNEL OF THE DEPARTMENT OF DEFENSE ARE NOT ENGAGED IN THE SELLING OR SALE OF SUPPLIES OR MATERIALS SO AS TO BE PRECLUDED FROM RECEIVING RETIRED PAY BY THE PROVISIONS OF 5 U.S.C. 59C AND 10 U.S.C. 6112 (B). SEE B-12238, NOVEMBER 7, 1940.