B-150282, MAY 22, 1967

B-150282, MAY 22, 1967

PRECIS-UNAVAILABLE

JOHN W. MACY JR., U.S. CIVIL SERVICE COMMISSION:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF JANUARY 5, 1967, IN WHICH YOU REQUEST APPROVAL ON A PILOT BASIS OF THE PROCUREMENT OF OFFICIAL AIR PASSENGER TRANSPORTATION OF OFFICERS AND EMPLOYEES OF THE CIVIL SERVICE COMMISSION THROUGH THE USE OF AIR CREDIT CARDS.

THE PROPOSED METHOD OF PROCUREMENT WHICH YOUR LETTER RECOGNIZES WOULD DEPART FROM THE UNIFORM SYSTEM GENERALLY IN USE BY THE GOVERNMENT UNDER WHICH SUCH SERVICES ARE PROCURED THROUGH THE USE OF GOVERNMENT TRANSPORTATION REQUEST (EXCEPT WHERE THE FARE IS $15 OR LESS, PLUS FEDERAL TAX, AND CASH PROCUREMENT UNDER REGULATIONS OF THE DEPARTMENT OR AGENCY INVOLVED IS PERMITTED) HAS BEEN THE MATTER OF SEVERAL CONFERENCES BETWEEN MEMBERS OF YOUR STAFF AND OURS.

THESE CONFERENCES DISCLOSE YOUR PROPOSAL CONTEMPLATES THAT YOUR AGENCY WOULD SUBSCRIBE TO OR OPERATE IN CONJUNCTION WITH THE UNIFORM AIR TRAVEL PLAN (UATP) UNDER WHICH AIR PASSENGER TRANSPORTATION WOULD BE PROCURED ON A CREDIT BASIS FROM AIRLINES PARTICIPATING IN SUCH PLAN. AS A SUBSCRIBER TO THIS PLAN YOUR AGENCY WOULD NEGOTIATE A WRITTEN CONTRACT AND PLACE A DEPOSIT OF $425 WITH ONE OF THE PARTICIPATING AIRLINES. THE AIRLINE WOULD ISSUE AIR TRAVEL CREDIT CARDS TO DESIGNATED OFFICIALS AND EMPLOYEES OF YOUR COMMISSION MARKED TO RESTRICT THEIR USE TO OFFICIAL GOVERNMENT BUSINESS WITH THE INTENT TO PRECLUDE COLLECTION AND ASSESSMENT OF THE FEDERAL TAX ON AIR TRANSPORTATION AND DISCOURAGE IMPROPER USE OF THE CARDS.

IT IS UNDERSTOOD THAT APPROXIMATELY 130 CARDS, WHICH WOULD BE USED BY ABOUT 300 DIFFERENT EMPLOYEES, WOULD BE ISSUED TO KEY COMMISSION PERSONNEL. IT WAS ESTIMATED BY MEMBERS OF YOUR STAFF THAT APPROXIMATELY 800 TICKETS WOULD BE BOUGHT ANNUALLY THROUGH USE OF THE CREDIT CARDS AND THEIR USE POSSIBLY COULD RESULT IN AN ANNUAL ADMINISTRATIVE SAVINGS OF $144.

UNDER THE PROPOSED SYSTEM THE TRAVELER'S APPROVED TRAVEL ITINERARY WOULD BE USED AS THE OBLIGATION DOCUMENT IN THE APPROPRIATE FINANCE OFFICE. THE TRAVELER WOULD OBTAIN HIS TICKET BY USING THE AIR TRAVEL CREDIT CARD AND UPON COMPLETION OF HIS TRAVEL WOULD SUBMIT A TRAVEL VOUCHER, STANDARD FORM 1012, IN THE USUAL MANNER. WHEN THE TRAVEL VOUCHERS ARE RECEIVED THE OBLIGATION FOR TRANSPORTATION CAN BE IDENTIFIED WITH THE EMPLOYEE NUMBER OR OTHER NUMERICAL CITATION SHOWN IN LIEU OF A TRANSPORTATION REQUEST NUMBER, FOR ASSOCIATION WITH THE BILLINGS SUBSEQUENTLY RECEIVED FROM THE CONTRACTING AIR CARRIER. THE CONTRACTING CARRIER WOULD SUBMIT WITH THE NORMAL BILLINGS A PRINTOUT AND A PUNCHED CARD SIMILAR IN FORMAT TO THE TRANSPORTATION REQUEST EXCEPT THAT IT WOULD NOT NECESSARILY CONTAIN THE NAME OF THE TRAVELER. WHEN RECEIVED FROM THE CARRIER, THE PRINTOUT AND PUNCHED CARD WOULD BE GIVEN A NUMERICAL (VOUCHER) CITATION AND BE TRANSMITTED TO GAO WITH A STANDARD FORM 1171 AS IS NOW DONE UNDER CURRENT PROCEDURES.

BASED ON THE ESTIMATES FURNISHED BY YOUR STAFF, EACH OF THE 130 AIR CREDIT CARDS ISSUED WOULD BE USED FOR AN AVERAGE OF 6 TRIPS ANNUALLY AND THE 300 USING COMMISSION PERSONNEL WOULD AVERAGE LESS THAN 3 TRIPS IN A YEAR USING SUCH CREDIT CARDS.

THE USE OF AIR CREDIT CARDS FOR OFFICIAL GOVERNMENT TRAVEL HAS BEEN THE SUBJECT OF SEVERAL STUDIES BY OUR OFFICE AND OTHER GOVERNMENT AGENCIES. SEE 42 COMP. GEN. 334. THE NUMEROUS DISADVANTAGES INHERENT IN THE SYSTEM FOR THE PROCUREMENT OF OFFICIAL GOVERNMENT PASSENGER TRANSPORTATION THROUGH THE USE OF CREDIT CARD SEEM TO FAR OUTWEIGH WHATEVER ADVANTAGE MIGHT BE GAINED BY EMPLOYING THAT SYSTEM.

THE UNIVERSAL AIR TRAVEL PLAN SUBSCRIBER'S CONTRACT PROVIDES UNDER THE HEADING "RESPONSIBILITY FOR USE OF AIR TRAVEL CARDS," PARAGRAPH VIII THAT:

"*** CONTRACTOR WILL USE REASONABLE CARE TO PREVENT THE HONORING OF AIR TRAVEL CARDS PRESENTED BY PERSONS OTHER THAN AIR TRAVEL CARD HOLDERS OR THEIR DULY AUTHORIZED AGENTS, BUT IF AIR TRAVEL CARDS ISSUED HEREUNDER ARE NEVERTHELESS HONORED WHEN SO PRESENTED, SUBSCRIBER WILL BE RESPONSIBLE FOR THE VALUE OF THE TICKETS AND OTHER DOCUMENTS SO PURCHASED (INCLUDING ALL APPLICABLE TARIFF AND OTHER CHARGES AND TAXES). IF SUBSCRIBER DESIRES TO TERMINATE ITS RESPONSIBILITY FOR THE USE OF ANY AIR TRAVEL CARD, OR IF AN AIR TRAVEL CARD HAS BEEN LOST OR DESTROYED, SUBSCRIBER WILL SO NOTIFY CONTRACTOR IN WRITING. UPON RECEIPT OF SUCH NOTICE, CONTRACTOR WILL CANCEL THE AIR TRAVEL CARD AND WILL TAKE STEPS TO PREVENT THE HONORING THEREOF; BUT IF, NOTWITHSTANDING SUCH STEPS THE AIR TRAVEL CARD IS HONORED WITHIN A PERIOD OF THIRTY DAYS FOLLOWING THE RECEIPT OF SUCH NOTICE, SUBSCRIBER WILL BE RESPONSIBLE FOR THE VALUE OF THE TICKETS *** SO PURCHASED (INCLUDING ALL APPLICABLE TARIFF AND OTHER CHARGES AND TAXES)."

FROM TIME TO TIME WE HAVE SEEN REPORTS INDICATING THAT CREDIT CARDS OF THIS TYPE HAVE BEEN LOST OR STOLEN AND USED BY UNAUTHORIZED PERSONS. FOR AN INSTANCE OF SUCH AN ILLEGAL USE SEE WILLIAMS V. UNITED STATES, 192 F. SUPP. 97 (1961). PARAGRAPH VIII, OF THE AIR TRAVEL SUBSCRIBER'S CONTRACT, WOULD PROVIDE THAT YOUR AGENCY (AND THE UNITED STATES) IS RESPONSIBLE FOR ANY TICKETS PURCHASED THROUGH USE OF THE LOST OR STOLEN CREDIT CARD DURING THE THIRTY-DAY PERIOD FOLLOWING THE RECEIPT BY THE AIRLINE OF NOTICE OF THE LOSS OF THE CREDIT CARD. TO AGREE TO SUCH A PROVISION ON BEHALF OF THE UNITED STATES, MAKING IT LIABLE FOR DAMAGES IN AN INDEFINITE AMOUNT WHICH LIKELY COULD EXCEED BY MANY TIMES THE ESTIMATED POSSIBLE ANNUAL SAVINGS AND MIGHT EXCEED THE BALANCE AT ANY TIME AVAILABLE IN YOUR AGENCY'S APPROPRIATION, APPEARS TO BE BEYOND THE AUTHORITY OF ANY CONTRACTING OFFICER OF THE UNITED STATES. SEE 7 COMP. GEN. 507, 8 ID. 647, 35 ID. 85, 39 ID. 554, AND B-140659 MARCH 22, 1961.

FURTHERMORE SECTION 1 OF THE UNIVERSAL AIR TRAVEL PLAN SUBSCRIBER'S CONTRACT RELATIVE TO THE INITIAL DEPOSIT OF $425 AT THE TIME AN AIR TRAVEL PLAN ACCOUNT FOR THE SUBSCRIBER IS OPENED, PROVIDES:

"*** THE VALUE OF TICKETS AND OTHER DOCUMENTS (INCLUDING ALL APPLICABLE TARIFF AND OTHER CHARGES AND TAXES) PURCHASED BY SUBSCRIBER'S AIR TRAVEL CARD HOLDERS AGAINST AIR TRAVEL CARDS ISSUED HEREUNDER WILL BE CHARGED TO SUBSCRIBER'S ACCOUNT."

IT SEEMS CLEAR THAT THE PURPOSE OF THE DEPOSIT INVOLVED IS TO ASSURE, TO THE EXTENT THEREOF, THE AIR CARRIERS BEING PAID FOR TICKETS THEREAFTER TO BE FURNISHED AND PRIOR TO THEIR ISSUANCE AND AT A TIME WHEN NO SERVICE HAS BEEN RENDERED OR TICKETS ENTITLING THE SUBSCRIBER TO SERVICE HAVE ISSUED. PAYMENT OF SUCH A DEPOSIT APPEARS TO BE PROSCRIBED BY 31 U.S.C. 529 WHICH READS, IN PERTINENT PART:

"NO ADVANCE OF PUBLIC MONEY SHALL BE MADE IN ANY CASE UNLESS AUTHORIZED BY THE APPROPRIATION CONCERNED OR OTHER LAW. AND IN ALL CASES OF CONTRACTS FOR THE PERFORMANCE OF ANY SERVICE, *** FOR THE USE OF THE UNITED STATES, PAYMENT SHALL NOT EXCEED THE VALUE OF THE SERVICE RENDERED

AS TO SUCH PROVISION, THE ATTORNEY GENERAL IN 10 OP. ATTY. GEN. 288 STATED:

"IT IS THE PLAIN MEANING OF THIS LAW, THAT NO MONEY SHALL BE ADVANCED TO CONTRACTORS; THAT IS, THAT NO MONEY SHALL BE PAID TO THEM ON ACCOUNT OF THEIR CONTRACTS BEFORE THE ACTUAL PERFORMANCE OF THE SERVICE OR THE DELIVERY OF ARTICLES STIPULATED FOR. AND THIS NOT ONLY FORBIDS THE CONTRACTING OFFICER OF THE GOVERNMENT TO PAY MONEY IN ADVANCE BUT FORBIDS HIM TO CONTRACT FOR SUCH PAYMENT. ***."

SEE 30 COMP. GEN. 348, 349.

WHILE 41 U.S.C. 255 PERMITS EXECUTIVE AGENCIES TO MAKE CERTAIN ADVANCES UPON ADEQUATE SECURITY AND A DETERMINATION BY THE AGENCY HEAD THAT TO MAKE SUCH ADVANCE WOULD BE IN THE PUBLIC INTEREST, WE DO NOT FIND IN YOUR PROPOSAL ANY SECURITY FOR SUCH ADVANCE OR OTHER ELEMENTS SUFFICIENT TO BRING THE PROPOSAL WITHIN SUCH STATUTORY PROVISION NOR HAS ANY OTHER AUTHORITY COME TO OUR ATTENTION WHICH WOULD AUTHORIZE THE ADVANCE OF $425.

A CREDIT CARD SYSTEM WOULD PLACE RESPONSIBILITY ON THE TRAVELER FOR TRANSPORTATION DECISIONS WITHOUT BENEFIT OF KNOWLEDGE AVAILABLE TO TRANSPORTATION OFFICERS. THE PROCEDURES COVERING THE USE OF THE GOVERNMENT TRANSPORTATION REQUEST ARE DESIGNED TO ULTIMATELY SHOW THE TRAVEL FURNISHED AS COMPARED WITH THE TRAVEL REQUESTED. THE USE OF A CREDIT CARD WOULD ELIMINATE THE CAPABILITY TO MAKE THIS COMPARISON AND THE TRAVELER WOULD THEN BE HELD PERSONALLY LIABLE FOR ADDITIONAL COSTS, AND MONEY NOW RECLAIMED FROM CARRIERS BY GAO AUDIT WOULD HAVE TO BE REPAID DIRECTLY BY THE GOVERNMENT TRAVELER. MONEY OBTAINED THROUGH GAO AUDIT OF GOVERNMENT TRANSPORTATION WOULD BE LOST, OR MADE MORE DIFFICULT TO RECLAIM UNDER A CREDIT CARD SYSTEM.

THUS ADOPTION OF THE SYSTEM WOULD INCREASE THE LIABILITY OF YOUR EMPLOYEES. ALSO, IT WOULD DEPRIVE YOUR DISBURSING AND CERTIFYING OFFICERS OF THE PROTECTION ACCORDED THEM BY 31 U.S.C. 82G WHICH ABSOLVES SUCH OFFICERS, WHERE TRANSPORTATION IS FURNISHED ON TRANSPORTATION REQUESTS, FROM LIABILITY FOR OVERPAYMENTS DUE TO THE USE OF IMPROPER TRANSPORTATION RATES OF CLASSIFICATIONS.

IN THE CIRCUMSTANCES, AND FOR THE REASONS REFERRED TO, WE ARE UNABLE TO APPROVE YOUR REQUEST FOR AN EXCEPTION TO THE PROVISIONS OF TITLE 5, CHAPTER 2000, IN THE GENERAL ACCOUNTING OFFICE POLICY AND PROCEDURES MANUAL WHICH WOULD ENABLE THE CIVIL SERVICE COMMISSION TO PROCEED WITH THE SYSTEM DESCRIBED.

HOWEVER, WE ARE OF THE OPINION THAT CONSIDERATION SHOULD BE GIVEN TO SIMPLIFYING THE PROCUREMENT OF PASSENGER TRANSPORTATION, PARTICULARLY WHERE THE TRAVEL INVOLVED IS OF THE TYPE MENTIONED IN YOUR LETTER OF JANUARY 5, AND WE HAVE SUGGESTED THAT THIS MATTER TAKEN UP BY THE STEERING COMMITTEE OF THE JOINT FINANCIAL MANAGEMENT IMPROVEMENT PROGRAM.