B-123621, JUNE 28, 1955, 34 COMP. GEN. 705

B-123621, JUNE 28, 1955, 34 COMP. GEN. 705

APPROPRIATIONS - OBLIGATIONS - STORE STOCKS, BUILDING SERVICES - SECTION 1311, SUPPLEMENTAL APPROPRIATION ACT, 1955 INTRAGOVERNMENTAL ORDERS PLACED WITH GENERAL SERVICES ADMINISTRATION FOR STORE STOCK ITEMS, WHICH ARE TO BE DELIVERED FROM EXISTING STOCKS OR WHICH ARE TEMPORARILY OUT OF STOCK BUT ON ORDER, OR WHICH HAVE NOT BEEN RECORDED AS OBLIGATIONS OF THE ORDERING AGENCY AT THE TIME THE ORDER IS MADE. AGENCIES WITH LIMITED EXEMPTION FROM PROCUREMENT UNDER THE FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT OF 1949 MAY RECORD AS OBLIGATIONS ORDERS FOR STORE STOCK ITEMS PLACED WITH GENERAL SERVICES ADMINISTRATION. ORDERS FOR OTHER THAN STORE STOCK ITEMS WHICH AGENCIES CUSTOMARILY ORDER FROM GENERAL SERVICES ADMINISTRATION FOR PROCUREMENT THROUGH THE GENERAL SUPPLY FUND MAY BE RECORDED AS OBLIGATIONS OF THE ORDERING AGENCIES WHEN THE AGENCY IS REQUIRED BY LAW OR STATUTORY REGULATIONS TO ORDER THROUGH GENERAL SERVICES ADMINISTRATION. ORDERS PLACED WITH GENERAL SERVICES ADMINISTRATION FOR STORE STOCK ITEMS TO BE DELIVERED DIRECT TO THE ORDERING AGENCY AND FOR OTHER THAN STORE STOCK ITEMS TO BE PROCURED THROUGH THE GENERAL SUPPLY FUND BY AGENCIES NOT REQUIRED BY LAW OR STATUTORY REGULATION TO SUBMIT ORDERS THROUGH GENERAL SERVICES ADMINISTRATION MAY NOT BE RECORDED AS OBLIGATIONS UNDER SECTION 1311 OF THE SUPPLEMENTAL APPROPRIATION ACT, 1955, UNTIL GENERAL SERVICES ADMINISTRATION EXECUTES THE CONTRACT. JOB ORDERS PLACED WITH THE GENERAL SERVICES ADMINISTRATION FOR SPECIFIC BUILDING MANAGEMENT OPERATIONS OR RELATED SERVICE, BUILDING ALTERATIONS, OR SPECIAL FACILITIES, WHICH ARE TO BE PERFORMED BY GENERAL SERVICES ADMINISTRATION LABOR IN WHOLE OR IN PART OR TO BE PERFORMED BY CONTRACT, MAY BE RECORDED AS OBLIGATIONS OF THE ORDERING AGENCY IF THE AGENCY IS REQUIRED BY LAW OR STATUTORY REGULATION TO PLACE THE ORDER WITH GENERAL SERVICES ADMINISTRATION. JOB ORDERS VOLUNTARILY PLACED BY AGENCIES WITH GENERAL SERVICES ADMINISTRATION FOR SPECIFIC BUILDING MANAGEMENT OPERATIONS OR RELATED SERVICES, ALTERATIONS OR SPECIAL FACILITIES TO BE PERFORMED EITHER BY GENERAL SERVICES ADMINISTRATION OR BY CONTRACT MAY NOT BE RECORDED AS OBLIGATIONS UNTIL THE WORK IS PERFORMED BY GENERAL SERVICES ADMINISTRATION OR THE CONTRACT IS EXECUTED.

COMPTROLLER GENERAL CAMPBELL TO THE ADMINISTRATOR, GENERAL SERVICES ADMINISTRATION, JUNE 28, 1955:

IN YOUR LETTER OF APRIL 13, 1955, A DECISION IS REQUESTED AS TO WHEN FUNDS MAY BE CONSIDERED TO HAVE BEEN LEGALLY OBLIGATED BY ORDERS PLACED BY CUSTOMER AGENCIES WITH THE GENERAL SERVICES ADMINISTRATION FOR SERVICES FINANCED UNDER THE GENERAL SUPPLY FUND AND THE BUILDINGS MANAGEMENT FUND. THE SITUATIONS INVOLVED ARE SET FORTH IN YOUR LETTER AS FOLLOWS:

1. ORDERS FOR STORES STOCK (COMMON-USE STANDARD STOCK) ITEMS FOR DELIVERY FROM EXISTING STOCKS.

2. ORDERS FOR STORES STOCK ITEMS WHICH ARE TEMPORARILY OUT OF STOCK AND ARE ON ORDER.

3. ORDERS FOR STORES STOCK ITEMS TEMPORARILY OUT OF STOCK, BUT WHICH DO NOT HAPPEN AT THE TIME TO HAVE BEEN REORDERED.

4. ORDERS FOR STORES STOCK ITEMS WHICH GSA, FOR REASONS OF ECONOMY AND EFFICIENCY (SUCH AS SAVINGS THROUGH MINIMIZING TRANSPORTATION AND HANDLING COSTS), ORDERS FOR DIRECT DELIVERY FROM CONTRACTOR TO CUSTOMER AGENCY, PAYMENT TO CONTRACTOR TO BE MADE BY GENERAL SUPPLY FUND.

5. ORDERS FOR OTHER THAN STORES STOCK ITEMS WHICH CUSTOMER AGENCIES CUSTOMARILY ORDER FROM GSA FOR PROCUREMENT THROUGH GENERAL SUPPLY FUND.

6. JOB ORDERS FOR A SPECIFIC BUILDINGS MANAGEMENT OPERATION OR RELATED SERVICE COVERED BY SECTION 210 OF THE PROPERTY ACT FOR TENANT CHANGES, BUILDING ALTERATIONS, OR SPECIAL FACILITIES AND EQUIPMENT, AS DISTINGUISHED FROM RECURRING SERVICES, TO BE PERFORMED BY GSA LABOR IN WHOLE OR IN PART.

7. JOB ORDERS ON SAME CONDITIONS AS IN 6 EXCEPT THAT FOR REASONS OF ECONOMY AND EFFICIENCY GSA ELECTS TO HAVE WORK PERFORMED WHOLLY BY CONTRACT.

IN VIEW OF THE ENACTMENT OF SECTION 1311 OF THE SUPPLEMENTAL APPROPRIATION ACT, 1955, WITH PARTICULAR REFERENCE TO SUBSECTION (A) (3), THE FOREGOING TRANSACTIONS SHOULD BE CONSIDERED, IN EACH CASE, WITH RESPECT TO THE FOLLOWING CATEGORIES:

(A) CUSTOMER AGENCY IS REQUIRED BY THE LAW OR REGULATION TO PLACE THE ORDER WITH THE GENERAL SUPPLY FUND OR BUILDINGS MANAGEMENT FUND.

(B) UNDER GSA REGULATION THE PLACING OF THE ORDER WITH THE GENERAL SUPPLY FUND OR BUILDINGS MANAGEMENT FUND IS OPTIONAL ALTHOUGH GSA COULD, UNDER THE LAW, MAKE THE SUBMISSION OF SUCH ORDER MANDATORY.

(C) GSA REGULATION PROVIDES THAT PLACING OF ORDERS WITH GSA IS MANDATORY, BUT AGENCIES HAVE LIMITED EXEMPTIONS BY LAW SUCH AS SECTION 602 (D) OF THE PROPERTY ACT. THE TERM "LIMITED EXEMPTION" MUST BE INTERPRETED ACCORDING TO THE LEGISLATIVE HISTORY OF THE EXEMPTION LANGUAGE OF SECTION 602 (D) (P. 28, H. REPT. 670, 81ST CONG.):

"* * * IT IS EXPECTED THAT * * * (THE AGENCIES OR PROGRAMS LISTED) WILL AS FAR AS PRACTICABLE PROCURE, UTILIZE, AND DISPOSE OF PROPERTY IN ACCORDANCE WITH THE PROVISIONS OF THE ACT AND THE REGULATIONS ISSUED THEREUNDER, PARTICULARLY SO FAR AS COMMON-USE ITEMS AND ADMINISTRATIVE SUPPLIES ARE CONCERNED. * * *

"IN OTHER WORDS, TO THE EXTENT THAT COMPLIANCE WITH THE ACT AND SUBMISSION TO THE JURISDICTION OF THE ADMINISTRATOR WILL NOT SO "IMPAIR OR AFFECT THE AUTHORITY" OF THE SEVERAL AGENCIES TO WHICH THE SUBSECTION APPLIES AS TO INTERFERE WITH THE OPERATION OF THEIR PROGRAMS, THE ACT WILL GOVERN. * * *"

(D) AGENCY SUBMISSION OF ORDERS IS PURELY OPTIONAL, SUCH AS IN THE CASE OF LEGISLATIVE AND JUDICIAL AGENCIES.

YOU INDICATE THAT AGENCIES ARE FREQUENTLY UNCERTAIN AS TO WHETHER OBLIGATIONS ARE INCURRED WHEN ORDERS ARE PLACED UNDER THE FOREGOING CIRCUMSTANCES AND WHETHER GSA MAY UNDERTAKE THE COMPLETION OF ORDERS AFTER THE APPROPRIATIONS OF THE ORDERING AGENCIES EXPIRE FOR OBLIGATION PURPOSES. YOU STATE THAT THE WIDE RANGE OF SITUATIONS INVOLVED POINT UP THE DESIRABILITY OF HAVING THE MAXIMUM FEASIBLE UNIFORMITY IN TREATING OBLIGATIONS FOR ORDERS TO BE FILLED THROUGH THESE TWO FUNDS.

SECTION 1311 OF THE SUPPLEMENTAL APPROPRIATION ACT, 1955, PUBLIC LAW 663, APPROVED AUGUST 26, 1954, 68 STAT. 800, 830 (HEREINAFTER REFERRED TO AS SECTION 1311) PROVIDES, IN PERTINENT PART, AS FOLLOWS:

SEC. 1311. (A) AFTER THE DATE OF ENACTMENT HEREOF NO AMOUNT SHALL BE RECORDED AS AN OBLIGATION OF THE GOVERNMENT OF THE UNITED STATES UNLESS IT IS SUPPORTED BY DOCUMENTARY EVIDENCE OF---

(1) A BINDING AGREEMENT IN WRITING BETWEEN THE PARTIES THERETO, INCLUDING GOVERNMENT AGENCIES, IN A MANNER AND FORM AND FOR A PURPOSE AUTHORIZED BY LAW, EXECUTED BEFORE THE EXPIRATION OF THE PERIOD OF AVAILABILITY FOR OBLIGATION OF THE APPROPRIATION OR FUND CONCERNED FOR SPECIFIC GOODS TO BE DELIVERED, REAL PROPERTY TO BE PURCHASED OR LEASED,OR WORK OR SERVICES TO BE PERFORMED; OR

(3) AN ORDER REQUIRED BY LAW TO BE PLACED WITH A GOVERNMENT AGENCY; * *

THE LANGUAGE OF SUBSECTION 1311 (A) (3) IS CLEAR AND UNAMBIGUOUS AND IS APPLICABLE ONLY TO ORDERS REQUIRED BY LAW TO BE PLACED WITH GOVERNMENT AGENCIES. THIS IS EMPHASIZED BY THE FACT THAT DURING ENACTMENT OF THIS SUBSECTION AN AMENDMENT PROPOSED BY THE DEPARTMENT OF DEFENSE TO INSERT THE WORDS "OR AUTHORIZED" AFTER THE WORD "REQUIRED" WAS NOT ADOPTED BY THE CONGRESS. THE WELL-KNOWN MAXIM, EXPRESSIO UNIUS EST EXCLUSIO ALTERIUS, IS CLEARLY FOR APPLICATION AND GENERALLY SECTION 1311 WOULD PRECLUDE THE TREATING OF OTHER INTRA-GOVERNMENTAL ORDERS AS OBLIGATIONS.

REVOLVING FUNDS ARE ESTABLISHED PRIMARILY AS AN ACCOUNTING CONVENIENCE AND DO NOT IN THEMSELVES AUTHORIZE ALL ORDERS RECEIVED TO BE CONSIDERED AS OBLIGATIONS UNDER APPROPRIATIONS OF THE ORDERING AGENCIES IN THE ABSENCE OF SPECIFIC PROVISIONS THEREFOR. NO SUCH SPECIFIC STATUTORY AUTHORITY IS CONTAINED IN THE PROVISIONS OF LAW ESTABLISHING THE GENERAL SUPPLY FUND OR THE BUILDINGS MANAGEMENT FUND.

WE ARE SYMPATHETIC WITH THE ADMINISTRATIVE PROBLEMS HERE INVOLVED AND FEEL THAT IT WOULD BE DESIRABLE AND MORE ECONOMICAL TO THE GOVERNMENT IF ALL ORDERS PLACED WITH THE GENERAL SUPPLY FUND AND THE BUILDINGS MANAGEMENT FUND WERE TREATED AS OBLIGATIONS. HOWEVER, IN VIEW OF THE SPECIFIC LANGUAGE OF SECTION 1311, WE HAVE NO *ALTERNATIVE BUT TO CONCLUDE THAT ORDERS PLACED WITH THE GENERAL SUPPLY FUND AND THE BUILDINGS MANAGEMENT FUND MAY NOT BE TREATED AS OBLIGATIONS UNLESS REQUIRED BY LAW TO BE PLACED WITH GSA.

THE WORD "LAW" AS USED IN SUBSECTION 1311 (A) (3) UNDOUBTEDLY INCLUDES STATUTORY REGULATIONS--- CATEGORY (A/--- AS DISTINGUISHED FROM ADMINISTRATIVE REGULATIONS. ALSO, ORDERS PLACED BY AGENCIES COVERED BY CATEGORY (C) MAY BE PRESUMED TO BE NOT WITHIN THE LIMITED EXEMPTIONS SUCH AS ARE CONTAINED IN SECTION 602 (D) OF THE FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT OF 1949, AS AMENDED, 40 U.S.C. 474, BUT MAY BE REGARDED AS BEING REQUIRED BY LAW. NEITHER DO WE HAVE ANY OBJECTION TO THE TREATING OF ORDERS FOR STORES STOCK ITEMS AS OBLIGATIONS WHEN THEY MEET THE CRITERIA SET OUT IN OUR DECISION OF APRIL 7, 1953, B 114578, 32 COMP. GEN. 436. SEE B-121982, MARCH 4, 1955, 34 COMP. GEN. 418. THOSE CRITERIA CONTEMPLATE THAT THE ORDERS FOR STORES STOCK ITEMS WHICH MAY BE TREATED AS OBLIGATIONS WILL BE FILLED PROMPTLY SO THAT THE TIME ELAPSING BETWEEN THE PLACING OF THE ORDER AND THE FILLING OF THE ORDER WILL BE RELATIVELY SHORT.

YOUR QUESTIONS WILL BE CONSIDERED SPECIFICALLY IN THE LIGHT OF THE FOREGOING.

ITEMS 1 AND 2 COVERING STORE STOCK ITEMS MAY BE TREATED AS OBLIGATIONS UNDER CATEGORIES (A), (B), (C), OR (D).

YOUR REGULATIONS ( GSA REG. 1-II-302.08) PROVIDE THAT WHERE THE ORDERED STOCK ITEMS ARE OUT-OF-STOCK AND ARE NOT EXPECTED TO BE DELIVERED TO THE CUSTOMER AGENCY WITHIN 30 DAYS, THE ORDER WILL BE CANCELLED AND THE CUSTOMER AGENCY NOTIFIED. IF THIS REGULATION IS COMPLIED WITH, WE WOULD HAVE NO OBJECTION TO TREATING ORDERS UNDER ITEM 3 AS OBLIGATIONS UNDER CATEGORIES (A), (B), (C), OR (D).

ITEMS 4 AND 5 MAY BE TREATED AS OBLIGATIONS ONLY UNDER CATEGORIES (A) AND (C). UNDER CATEGORIES (B) AND (D), GSA IS ACTING MERELY AS AN AGENT FOR THE ORDERING AGENCY AND NO LEGAL OBLIGATION IS INCURRED UNTIL GSA EXECUTES THE CONTRACT WITH THE PRIVATE CONTRACTOR WHICH MEETS THE REQUIREMENTS OF SECTION 1311 (A) (1). 23 COMP. GEN. 88.

ITEMS 6 AND 7 MAY BE TREATED AS OBLIGATIONS UNDER CATEGORIES (A) AND (C). UNDER CATEGORIES (B) AND (D) THE JOB ORDER IN AND OF ITSELF DOES NOT CONSTITUTE A LEGAL OBLIGATION. A LEGAL OBLIGATION IS INCURRED AS AND WHEN THE OPERATION IS PERFORMED BY GSA LABOR OR WHEN A CONTRACT IS ENTERED INTO FOR PERFORMANCE OF THE WORK.