B-20061, SEPTEMBER 23, 1941, 21 COMP. GEN. 254

B-20061, SEPTEMBER 23, 1941, 21 COMP. GEN. 254

DEPARTMENTS AND ESTABLISHMENTS - SERVICES BETWEEN - APPLICABLE OPEN MARKET PURCHASE LIMITATION PURCHASES FROM WORKING FUNDS ADVANCED TO THE COAST AND GEODETIC SURVEY, COMMERCE DEPARTMENT, BY THE ARMY AIR CORPS, PURSUANT TO THE PROVISIONS OF SECTION 601 OF THE ACT OF JUNE 30, 1932, FOR CARRYING ON A PROJECT FOR THE AIR CORPS ARE SUBJECT TO THE EXCEPTION TO THE ADVERTISING-FOR-BIDS REQUIREMENT OF SECTION 3709, REVISED STATUTES, CONTAINED IN THE ACT OF JUNE 12, 1906, APPLICABLE TO THE AIR CORPS, RATHER THAN TO THE EXCEPTION CONTAINED IN THE ACT OF OCTOBER 10, 1940, APPLICABLE TO THE COMMERCE DEPARTMENT.

COMPTROLLER GENERAL WARREN TO THE SECRETARY OF COMMERCE, SEPTEMBER 23, 1941:

I HAVE YOUR LETTER OF AUGUST 23, 1941, AS FOLLOWS:

THE COAST AND GEODETIC SURVEY IS ENGAGED ON A LARGE CHART CONSTRUCTION PROJECT FOR THE ARMY AIR CORPS CONSISTING OF THE COMPILATION, PRINTING, AND DISTRIBUTION OF RESTRICTED AERONAUTICAL CHARTS FOR THE WESTERN HEMISPHERE. FOR MUCH OF THIS REGION, OUTSIDE OF THE UNITED STATES AND ALASKA, THERE ARE AT PRESENT NO AERONAUTICAL CHARTS SUITABLE FOR SAFE NAVIGATION OF AIRPLANES. THE ENTIRE COST OF THIS PROJECT IS BEING FINANCED WITH WORKING FUNDS ( ACCOUNT NO. 1325908) ADVANCED FROM WAR DEPARTMENT APPROPRIATION "2120705, AIR CORPS, ARMY, 1942" AS SHOWN IN YOUR " ACCOUNTS AND PROCEDURES LETTER NO. 2994" DATED JULY 12, 1941.

PROGRESS ON THIS EMERGENCY PROJECT IS BEING HANDICAPPED BY THE $25 LIMITATION IMPOSED ON DEPARTMENT OF COMMERCE PURCHASES OF SUPPLIES IN OPEN MARKET. IT APPEARS FROM WORDING OF THE LAW PASSED BY THE 76TH CONGRESS ( PUBLIC, NO. 842, 76TH CONGRESS, CHAPTER 851, 3D SESSION, H.R. 10061) THAT APPROPRIATIONS MADE TO THE DEPARTMENTS OF COMMERCE AND JUSTICE AND TO THE CIVIL SERVICE COMMISSION ARE THE ONLY ONES RESTRICTED TO THE AMOUNT OF $25 FOR THE PURCHASE OF SUPPLIES AND EQUIPMENT IN THE OPEN MARKET.

IT WOULD SEEM THAT WORKING FUNDS ADVANCED FROM THE WAR DEPARTMENT'S APPROPRIATION TO THE COAST AND GEODETIC SURVEY FOR THE AERONAUTICAL CHART CONSTRUCTION PROJECT WOULD NOT BE SUBJECT TO THIS RESTRICTION AND YOUR DECISION ON THIS POINT IS RESPECTFULLY REQUESTED.

THE EXPENSE OF THE CHART CONSTRUCTION PROJECT ON WHICH THE COAST AND GEODETIC SURVEY IS ENGAGED IS TO BE PAID FROM FUNDS ADVANCED TO THE DEPARTMENT OF COMMERCE FROM THE APPROPRIATION " AIR CORPS, ARMY, 1942," PURSUANT TO THE PROVISIONS OF SECTION 601 OF THE ACT OF JUNE 30, 1932, 47 STAT. 417, WHICH PROVIDES IN EFFECT THAT A GOVERNMENT DEPARTMENT, ESTABLISHMENT, BUREAU, OR OFFICE MAY PLACE ORDERS WITH ANY OTHER DEPARTMENT, ESTABLISHMENT, ETC., FOR MATERIALS, SUPPLIES, EQUIPMENT, WORK, OR SERVICES OF ANY KIND WHICH THE REQUISITIONED AGENCY MAY BE IN A POSITION TO SUPPLY OR EQUIPPED TO RENDER, AND SHALL PAY EITHER IN ADVANCE OR UPON PERFORMANCE OF THE WORK, WITH PROVISION FOR THE ESTABLISHMENT OF SPECIAL WORKING FUNDS IN CASES OF ADVANCE PAYMENTS.

THE ACT OF OCTOBER 10, 1940, 54 STAT. 1109, TO WHICH YOU REFER, IS ENTITLED "AN ACT TO CONSOLIDATE CERTAIN EXCEPTIONS TO SECTION 3709 OF THE REVISED STATUTES AND TO IMPROVE THE UNITED STATES CODE," AND PROVIDES IN PERTINENT PART:

THAT SECTION 3709 REVISED STATUTES SHALL NOT BE CONSTRUED TO APPLY TO ANY PURCHASES OR SERVICES AUTHORIZED BY ANY APPROPRIATION ACT FOR THE HEREINAFTER ENUMERATED DEPARTMENTS AND INDEPENDENT OFFICES---

(A) WHERE THE AGGREGATE AMOUNT INVOLVED DOES NOT EXCEED THE SUM OF $25---

(2) THE DEPARTMENT OF COMMERCE

IT IS EVIDENT THAT THE AUTHORITY GIVEN IN THE ABOVE-QUOTED LAW IS IN THE NATURE OF AN EXCEPTION TO THE REQUIREMENTS OF SECTION 3709, REVISED STATUTES, AND THAT IF SUCH EXCEPTION DOES NOT APPLY TO PURCHASES OR SERVICES FOR WHICH PAYMENT IS MADE FROM THE WORKING FUND SET UP FOR THIS PROJECT, THEN SECTION 3709 MUST BE TAKEN AS APPLYING TO THE PROCUREMENT OF ALL SUCH SUPPLIES OR SERVICES, UNLESS THERE CAN BE SUBSTITUTED ANOTHER EXCEPTION PROVIDED BY LAW AS APPLICABLE TO THE FUNDS IN QUESTION.

WHILE THE CITED ACT OF OCTOBER 10, 1940, PROVIDES NO EXCEPTION TO SECTION 3709, REVISED STATUTES, AS TO PURCHASES OR SERVICES FOR THE ARMY AIR CORPS, THE ACT OF JUNE 12, 1906, 34 STAT. 258, 10 U.S.C. 1205, DOES PROVIDE THAT:

HEREAFTER THE PURCHASE OF SUPPLIES AND THE PROCUREMENT OF SERVICES FOR ALL BRANCHES OF THE ARMY SERVICE MAY BE MADE IN OPEN MARKET, IN THE MANNER COMMON AMONG BUSINESS MEN, WHEN THE AGGREGATE OF THE AMOUNT REQUIRED DOES NOT EXCEED $500; BUT EVERY SUCH PURCHASE EXCEEDING $100 SHALL BE PROMPTLY REPORTED TO THE SECRETARY OF WAR FOR APPROVAL, UNDER SUCH REGULATIONS AS HE MAY PRESCRIBE.

THE ABOVE-QUOTED PROVISION, AS WELL AS A SIMILAR PROVISION FOR THE BENEFIT OF ALL BRANCHES OF THE NAVAL SERVICES AS CONTAINED IN THE ACT OF MARCH 2, 1907, 34 STAT. 1193, HAS BEEN CONSTRUED BY THE ACCOUNTING OFFICERS OF THE GOVERNMENT AS AN EXCEPTION TO SECTION 3709, REVISED STATUTES. SEE 17 COMP. GEN. 1066; 18 ID. 677.

THE FUNDS ADVANCED TO THE DEPARTMENT OF COMMERCE IN CONNECTION WITH THE CHART CONSTRUCTION PROJECT FOR THE ARMY AIR CORPS ARE TO BE EXPENDED UNDER THE SUPERVISION OF THE PERFORMING AGENCY. HOWEVER, SUCH FUNDS WERE IN FACT APPROPRIATED IN AN APPROPRIATION ACT FOR THE DEPARTMENT, AND ARE BEING USED BY THE DEPARTMENT OF COMMERCE, UNDER THE AUTHORITY OF SECTION 601 OF THE ACT OF JUNE 30, 1932, TO CARRY ON A PROJECT FOR THE ARMY AIR CORPS WHICH IS ONE OF THE BRANCHES OF THE ARMY SERVICE COVERED BY THE ACT OF JUNE 12, 1906. SINCE SUCH PURCHASES OR SERVICES PROCURED FROM THE WORKING FUND ARE IN BEHALF OF THE ARMY AIR CORPS, IT WOULD APPEAR THAT THE AUTHORITY CONFERRED BY THE ACT OF JUNE 12, 1906, IS APPLICABLE THERETO. IT SHOULD BE NOTED, HOWEVER, THAT SAID ACT REQUIRES THE REPORTING TO THE SECRETARY OF WAR FOR APPROVAL, UNDER SUCH REGULATIONS AS HE MAY PRESCRIBE, OF ANY PURCHASE IN EXCESS OF $100. SEE ARMY REGULATIONS 5-240. ACCORDINGLY, WHILE OPEN-MARKET PURCHASES NOT TO EXCEED $100 MAY BE MADE IN THE USUAL MANNER FROM SUCH WORKING FUNDS BY THE DEPARTMENT OF COMMERCE, ANY PURCHASE IN EXCESS OF $100, BUT NOT TO EXCEED $500, WILL BE SUBJECT TO THE APPROVAL OF THE SECRETARY OF WAR EITHER UNDER EXISTING REGULATIONS OR SUCH OTHER REGULATIONS AS HE MAY PRESCRIBE.