B-16577, MAY 10, 1941, 20 COMP. GEN. 759

B-16577, MAY 10, 1941, 20 COMP. GEN. 759

ASSIGNMENTS OF PAYMENTS UNDER WAR DEPARTMENT CONTRACTS - SET-OFF PROVISIONS IT IS WITHIN THE DISCRETION OF THE WAR DEPARTMENT TO INCORPORATE INTO ANY CONTRACT WHICH THE WAR DEPARTMENT IS AUTHORIZED TO MAKE ON BEHALF OF THE UNITED STATES A PROVISION, AUTHORIZED BY THE ASSIGNMENT OF CLAIMS ACT OF 1940, WHEREBY PAYMENTS TO AN ASSIGNEE UNDER SUCH A CONTRACT ARE EXEMPTED FROM SET-OFF OR REDUCTION, SO THAT A CONTRACT ENTERED INTO BY THE WAR DEPARTMENT FOR SUPPLIES OR SERVICES FOR THE CIVILIAN CONSERVATION CORPS MAY CONTAIN SUCH A PROVISION.

COMPTROLLER GENERAL WARREN TO THE SECRETARY OF WAR, MAY 10, 1941:

I HAVE YOUR LETTER OF MAY 2, 1941, AS FOLLOWS:

REFERENCE IS MADE TO THE ASSIGNMENT OF CLAIMS ACT OF 1940 ( PUBLIC, NO. 811, 76TH CONGRESS), APPROVED OCTOBER 9, 1940, WHICH PERMITS THE ASSIGNMENT OF CLAIMS UNDER PUBLIC CONTRACTS. SECTION ONE OF THAT ACT CONTAINS AMONG OTHERS, THE FOLLOWING PROVISION:

"ANY CONTRACT ENTERED INTO BY THE WAR DEPARTMENT OR THE NAVY DEPARTMENT MAY PROVIDE THAT PAYMENTS TO AN ASSIGNEE OF ANY CLAIM ARISING UNDER SUCH CONTRACT SHALL NOT BE SUBJECT TO REDUCTION OR SET OFF, AND IF IT IS SO PROVIDED IN SUCH CONTRACT, SUCH PAYMENT SHALL NOT BE SUBJECT TO REDUCTION OR SET-OFF FOR ANY INDEBTEDNESS OF THE ASSIGNOR TO THE UNITED STATES ARISING INDEPENDENTLY OF SUCH CONTRACT.'

WHILE THE ASSIGNMENT OF CLAIMS ACT OF 1940 IS CONSIDERED OF GENERAL APPLICATION SO FAR AS ASSIGNMENTS ARE CONCERNED, DOUBT HAS ARISEN AS TO WHETHER CONTRACTS ENTERED INTO BY THE WAR DEPARTMENT FOR SUPPLIES AND SERVICES FOR THE CIVILIAN CONSERVATION CORPS COME WITHIN THE PARTICULAR PROVISION QUOTED ABOVE.

DECISION IS REQUESTED AS TO WHETHER A CONTRACT ENTERED INTO BY THE WAR DEPARTMENT FOR SUPPLIES OR SERVICES FOR THE CIVILIAN CONSERVATION CORPS IS A "CONTRACT ENTERED INTO BY THE WAR EPARTMENT" WITHIN THE INTENT OF THE PROVISION IN QUESTION.

IT IS EVIDENT FROM THE PROVISION OF THE ASSIGNMENT OF CLAIMS ACT OF 1940, 54 STAT. 1029, QUOTED IN YOUR LETTER, THAT IT IS WITHIN THE DISCRETION OF THE WAR DEPARTMENT TO INCORPORATE THE PROVISIONS CONTEMPLATED IN THAT ACT INTO ANY CONTRACT WHICH THE WAR DEPARTMENT IS AUTHORIZED TO MAKE ON BEHALF OF THE UNITED STATES.

THE ACT OF JUNE 28, 1937, 50 STAT. 319, ESTABLISHING THE CIVILIAN CONSERVATION CORPS, PROVIDES IN PERTINENT PART AS FOLLOWS:

SEC. 2. THE PRESIDENT, BY AND WITH THE ADVICE AND CONSENT OF THE SENATE, IS AUTHORIZED TO APPOINT A DIRECTOR AT A SALARY OF $10,000 PER ANNUM. THE DIRECTOR SHALL HAVE COMPLETE AND FINAL AUTHORITY IN THE FUNCTIONING OF THE CORPS, INCLUDING THE ALLOTMENT OF FUNDS TO COOPERATING FEDERAL DEPARTMENTS AND AGENCIES, SUBJECT TO SUCH RULES AND REGULATIONS AS MAY BE PRESCRIBED BY THE PRESIDENT IN ACCORDANCE WITH THE PROVISIONS OF THIS ACT.

SEC. 11. THE CHIEF OF FINANCE, WAR DEPARTMENT, IS HEREBY DESIGNATED, EMPOWERED, AND DIRECTED, UNTIL OTHERWISE ORDERED BY THE PRESIDENT, TO ACT AS THE FISCAL AGENT OF THE DIRECTOR IN CARRYING OUT THE PROVISIONS OF THIS ACT: PROVIDED, THAT FUNDS ALLOCATED TO GOVERNMENT AGENCIES FOR OBLIGATION UNDER THIS ACT MAY BE EXPENDED IN ACCORDANCE WITH THE LAWS, RULES, AND REGULATIONS GOVERNING THE USUAL WORK OF SUCH AGENCY, EXCEPT AS OTHERWISE STIPULATED IN THIS ACT: * * *

SEC. 12. THE PRESIDENT IS HEREBY AUTHORIZED TO UTILIZE THE SERVICES AND FACILITIES OF SUCH DEPARTMENTS OR AGENCIES OF THE GOVERNMENT AS HE MAY DEEM NECESSARY FOR CARRYING OUT THE PURPOSES OF THIS ACT.

PARAGRAPH 3 OF EXECUTIVE ORDER NO. 7677-A, DATED JULY 26, 1937, AS AMENDED BY EXECUTIVE ORDERS NO. 7717, SEPTEMBER 29, 1937, NO. 8133, DATED MAY 15, 1939, AND NO. 8221, DATED AUGUST 21, 1939, ISSUED BY THE PRESIDENT PURSUANT TO THE AUTHORITY GIVEN IN THE ABOVE CITED ACT, IS AS FOLLOWS:

THE SECRETARY OF WAR, THE SECRETARY OF THE INTERIOR, THE SECRETARY OF AGRICULTURE, AND THE ADMINISTRATOR OF VETERANS' AFFAIRS ARE REQUESTED TO COOPERATE WITH THE DIRECTOR OF THE CIVILIAN CONSERVATION CORPS IN CARRYING OUT THE PURPOSES OF THE SAID ACT OF JUNE 28, 1937, AS AMENDED. EACH OF THE SAID SECRETARIES AND THE SAID ADMINISTRATOR SHALL APPOINT A REPRESENTATIVE WHO SHALL, UPON REQUEST OF THE DIRECTOR, CONFER WITH HIM AND UNDER HIS DIRECTION AID HIM IN PROSECUTING EFFECTIVELY THE PURPOSES CONTEMPLATED BY THE SAID ACT, AS AMENDED.

MOREOVER, IN THE CIVILIAN CONSERVATION CORPS REGULATIONS, THE FUNCTIONS OF THE WAR DEPARTMENT WITH RESPECT TO THE ADMINISTRATION OF THAT CORPS ARE DESCRIBED AS EMBRACING ITS RECONDITIONING, ORGANIZATION, ADMINISTRATION, TRANSPORTATION, SUPPLY, SANITATION, MEDICAL CARE, HOSPITALIZATION, DISCIPLINE, WELFARE, AND EDUCATION, TOGETHER WITH THE CONSTRUCTION OF WORK CAMPS AND ALL NEW INSTALLATIONS NECESSARY TO FULFILL THOSE FUNCTIONS; AND THE REGULATIONS CONTAIN DETAILED INSTRUCTIONS WITH RESPECT TO THE PROCUREMENT BY THE WAR DEPARTMENT OF SUPPLIES AND SERVICES FOR THE CIVILIAN CONSERVATION CORPS.

IT IS APPARENT, THEREFORE, THAT THE WAR DEPARTMENT HAS BEEN GIVEN AUTHORITY TO CONTRACT FOR SUPPLIES AND SERVICES FOR THE CIVILIAN CONSERVATION CORPS; AND THAT THE EXPENDITURE OF FUNDS ALLOTTED TO THE WAR DEPARTMENT FOR SUCH CONTRACTS IS SUBJECT TO THE LAWS, RULES, AND REGULATIONS OTHERWISE EFFECTIVE FOR THE DEPARTMENT, AS PROVIDED IN SECTION 11 OF THE ACT, SUPRA. COMPARE 19 COMP. GEN. 853. THE QUOTED PARAGRAPH OF THE ASSIGNMENT OF CLAIMS ACT OF 1940, IS ONE OF THE LAWS OTHERWISE APPLICABLE TO CONTRACTS OF THE WAR DEPARTMENT; AND NO REASON IS PERCEIVED FOR DISTINGUISHING A CONTRACT MADE IN CONNECTION WITH THE ADMINISTRATION OF THE CIVILIAN CONSERVATION CORPS FROM ANY OTHER CONTRACT ENTERED INTO BY THE WAR DEPARTMENT, INSOFAR AS CONCERNS THE INCORPORATION INTO SUCH CONTRACTS OF THE PROVISIONS RELATING TO REDUCTION OR SET-OFF AUTHORIZED BY THE ACT OF OCTOBER 9, 1940.

YOU ARE ADVISED, THEREFORE, THAT A WAR DEPARTMENT CONTRACT FOR SUPPLIES OR SERVICES FOR THE CIVILIAN CONSERVATION CORPS IS A "CONTRACT ENTERED INTO BY THE WAR DEPARTMENT," WITHIN THE MEANING OF THE SUBJECT PROVISION OF THE ASSIGNMENT OF CLAIMS ACT OF 1940.