B-153348, APRIL 22, 1964, 43 COMP. GEN. 697

B-153348, APRIL 22, 1964, 43 COMP. GEN. 697

FUNDS - FEDERAL GRANTS, ETC., TO OTHER THAN STATES - APPLICABILITY OF FEDERAL STATUTES - APPROPRIATIONS, ETC., RESTRICTIONS. CONTRACTS - COST- TYPE - PROHIBITORY, ETC., STATUTE APPLICABILITY EXPENDITURES FROM FEDERAL GRANT FUNDS BY THE GRANTEE TO CARRY OUT THE PURPOSE OF THE GRANT ARE NOT SUBJECT TO THE RESTRICTIONS AND LIMITATIONS IMPOSED ON EXPENDITURES FROM APPROPRIATED FUNDS BY FEDERAL DEPARTMENTS AND AGENCIES AND, THEREFORE, EXPENDITURES FROM FUNDS GRANTED BY THE NATIONAL SCIENCE FOUNDATION FOR SCIENTIFIC RESEARCH FOR THE PURCHASE OF AIRCRAFT BY GRANTEES MAY BE MADE WITHOUT REGARD TO THE PROHIBITION AGAINST THE PURCHASE OF AIRCRAFT WITHOUT SPECIFIC AUTHORITY IN SECTION 16 (A) OF THE ADMINISTRATIVE EXPENSES ACT OF 1946, 5 U.S.C. 78 (B), WHEN AN ADMINISTRATIVE DETERMINATION IS MADE THAT THE AIRCRAFT IS REQUIRED FOR THE PURPOSE OF THE RESEARCH GRANT. REIMBURSEMENT FOR THE PURCHASE OF AIRCRAFT BY A COST-REIMBURSEMENT CONTRACTOR, OPERATING A FEDERALLY OWNED RESEARCH CENTER FOR THE NATIONAL SCIENCE FOUNDATION IS PROHIBITED UNDER SECTION 16 (A) OF THE ADMINISTRATIVE EXPENSES ACT OF 1946, 5 U.S.C. 78 (B), IN THE ABSENCE OF EXPRESS AUTHORITY IN THE AGENCY'S APPROPRIATION OR OTHER LAW.

TO THE DIRECTOR, NATIONAL SCIENCE FOUNDATION, APRIL 22, 1964:

REFERENCE IS MADE TO LETTER OF FEBRUARY 17, 1964, WITH ENCLOSURE, FROM THE DEPUTY DIRECTOR, NATIONAL SCIENCE FOUNDATION, CONCERNING APPLICATION OF THE PROVISIONS OF SECTION 16 (A) OF THE ACT OF AUGUST 2, 1946, 60 STAT. 810, 5 U.S.C. 78 (B), WITH REFERENCE TO RESEARCH GRANTS MADE BY THE FOUNDATION TO NONPROFIT INSTITUTIONS OF HIGHER LEARNING AND TO CERTAIN CONTRACTORS OPERATING FEDERALLY OWNED RESEARCH CENTERS UNDER COST- REIMBURSEMENT CONTRACTS WITH THE FOUNDATION.

SECTION 16 (A) OF THE SAID ACT OF AUGUST 2, 1946, IS AS FOLLOWS:

EXCEPTING APPROPRIATIONS FOR THE MILITARY AND NAVAL ESTABLISHMENTS, NO APPROPRIATION SHALL BE AVAILABLE FOR THE PURCHASE, MAINTENANCE, OR OPERATION OF ANY AIRCRAFT UNLESS SPECIFIC AUTHORITY FOR THE PURCHASE, MAINTENANCE, OR OPERATION THEREOF HAS BEEN OR IS PROVIDED IN SUCH APPROPRIATION.

IT IS STATED IN THE LETTER THAT THE NATIONAL SCIENCE FOUNDATION, IN CARRYING OUT ITS STATUTORY RESPONSIBILITIES, PROVIDES, AMONG OTHER THINGS, SUPPORT FOR THE CONDUCT OF SCIENTIFIC RESEARCH PRIMARILY THROUGH THE MEDIUM OF GRANTS TO NONPROFIT INSTITUTIONS OF HIGHER EDUCATION, ALTHOUGH, ON INFREQUENT OCCASIONS, THIS PURPOSE IS ALSO ACCOMPLISHED BY CONTRACT. THE FOUNDATION IS SAID TO BE RECEIVING AN INCREASING NUMBER OF PROPOSALS REQUESTING SUPPORT FOR RESEARCH WHICH MAY REQUIRE THE ACQUISITION OR USE OF AIRCRAFT. AS AN EXAMPLE OF SUCH PROPOSALS, THERE IS CITED RESEARCH IN THE FIELD OF WEATHER MODIFICATION AS REQUIRING THE FREQUENT USE OF AIRCRAFT.

IT IS FURTHER STATED THAT THE FOUNDATION HAS ESTABLISHED CERTAIN NATIONAL RESEARCH CENTERS WHICH ARE FEDERALLY OWNED AND WHICH ARE OPERATED BY PRIVATE CONTRACTORS UNDER COST-REIMBURSEMENT CONTRACTS. IN CARRYING OUT RESEARCH ACTIVITIES AT SUCH CENTERS, IT IS NECESSARY FOR A CONTRACTOR, ON OCCASION, TO RENT AIRCRAFT OR OTHERWISE PAY FOR THEIR USE.

THE SPECIFIC QUESTIONS PRESENTED FOR DECISION, BASED UPON THE FOREGOING FACTS, ARE (1) WHETHER EXPENDITURES MAY BE MADE FROM NATIONAL SCIENCE FOUNDATION RESEARCH GRANTS OR (CONTRACTS) FOR THE SUPPORT OF RESEARCH AT NONPROFIT INSTITUTIONS, FOR THE PURCHASE, MAINTENANCE OR OPERATION OF AIRCRAFT WHERE REQUIRED TO CONDUCT THE RESEARCH FOR WHICH THE GRANT HAS BEEN MADE; AND (2) WHETHER THE FOUNDATION MAY REIMBURSE A COST CONTRACTOR, OPERATING A FEDERALLY OWNED RESEARCH CENTER, FOR COSTS INCURRED BY THE CONTRACTOR IN OBTAINING THE USE OF AIRCRAFT NECESSARY TO CARRY OUT RESEARCH ACTIVITIES AT THE CENTER.

BY THE TERMS OF SECTION 3 (A) (2) OF THE NATIONAL SCIENCE FOUNDATION ACT OF 1950, 64 STAT. 149, AS AMENDED, 42 U.S.C. 1862 (A) (2) (SUPP. IV), THE FOUNDATION IS AUTHORIZED "TO INITIATE AND SUPPORT BASIC SCIENTIFIC RESEARCH AND PROGRAMS TO STRENGTHEN SCIENTIFIC RESEARCH POTENTIAL IN THE MATHEMATICAL, PHYSICAL, MEDICAL, BIOLOGICAL, ENGINEERING, AND OTHER SCIENCES, BY MAKING CONTRACTS OR OTHER ARRANGEMENTS (INCLUDING GRANTS, LOANS, AND OTHER FORMS OF ASSISTANCE) TO SUPPORT SUCH SCIENTIFIC ACTIVITIES AND TO APPRAISE THE IMPACT OF RESEARCH UPON INDUSTRIAL DEVELOPMENT AND UPON THE GENERAL WELFARE.'

SECTION 11 OF THE ACT, AS AMENDED, 64 STAT. 153, 42 U.S.C. 1870 (SUPP. IV), PROVIDES THAT THE FOUNDATION IS AUTHORIZED, WITHIN THE LIMITS OF AVAILABLE APPROPRIATIONS, TO DO ALL THINGS NECESSARY TO CARRY OUT THE PROVISIONS OF THE ACT, INCLUDING, BUT WITHOUT BEING LIMITED THERETO, THE AUTHORITY---

(B) TO MAKE SUCH EXPENDITURES AS MAY BE NECESSARY FOR ADMINISTERING THE PROVISIONS OF THIS CHAPTER;

(E) TO ACQUIRE BY PURCHASE, LEASE, LOAN, GIFT OR CONDEMNATION, AND TO HOLD AND DISPOSE OF BY GRANT, SALE, LEASE, OR LOAN, REAL AND PERSONAL PROPERTY OF ALL KINDS NECESSARY FOR, OR RESULTING FROM, THE EXERCISE OF AUTHORITY GRANTED BY THIS CHAPTER.

THE FUNDS APPROPRIATED FOR THE NATIONAL SCIENCE FOUNDATION FOR THE FISCAL YEAR 1964, TO REMAIN AVAILABLE UNTIL EXPENDED, CONTAINED IN THE INDEPENDENT OFFICES APPROPRIATION ACT, 1964, PUBLIC LAW 88-215, APPROVED DECEMBER 19, 1963, 77 STAT. 440, ARE MADE AVAILABLE IN GENERAL TERMS FOR, AMONG OTHER THINGS,"EXPENSES NECESSARY" TO CARRY OUT THE PURPOSES OF THE FOUNDATION'S ORGANIC ACT. WE FIND NOTHING IN THE LANGUAGE OF THE APPROPRIATION OR IN THE BASIC STATUTE WHICH EXPRESSLY AUTHORIZES THE USE OF SUCH FUNDS FOR THE PURCHASE, MAINTENANCE, OR OPERATION OF AIRCRAFT.

WHETHER THE RESTRICTION CONTAINED IN 5 U.S.C. 78 (B), QUOTED ABOVE, APPLIES TO EXPENDITURES MADE BY A GRANTEE FROM FUNDS GRANTED BY THE FOUNDATION FOR THE CONDUCT OF BASIC RESEARCH, WILL DEPEND OF COURSE ON THE TERMS AND CONDITIONS OF THE PARTICULAR GRANT. IT CONSISTENTLY HAS BEEN HELD WITH REFERENCE TO FEDERAL GRANT FUNDS THAT, WHEN SUCH FUNDS ARE GRANTED TO AND ACCEPTED BY THE GRANTEE, THE EXPENDITURE OF SUCH FUNDS BY THE GRANTEE FOR THE PURPOSES AND OBJECTS FOR WHICH MADE ARE NOT SUBJECT TO THE VARIOUS RESTRICTIONS AND LIMITATIONS IMPOSED BY FEDERAL STATUTE OR OUR DECISIONS WITH RESPECT TO THE EXPENDITURE, BY FEDERAL DEPARTMENTS AND ESTABLISHMENTS, OF APPROPRIATED MONEYS IN THE ABSENCE OF A CONDITION OF THE GRANT SPECIFICALLY PROVIDING TO THE CONTRARY. SEE 36 COMP. GEN. 221, 224, AND DECISIONS CITED THEREIN.

SINCE THE FUNDS APPROPRIATED FOR THE NATIONAL SCIENCE FOUNDATION ARE MADE AVAILABLE FOR EXPENSES NECESSARY TO INITIATE AND SUPPORT BASIC SCIENTIFIC RESEARCH, AND SINCE THE FOUNDATION IS AUTHORIZED TO ACCOMPLISH THIS PURPOSE BY VARIOUS METHODS, INCLUDING GRANTS, IT FOLLOWS THAT THE RULE SET FORTH ABOVE WITH REFERENCE TO THE EXPENDITURE OF GRANT FUNDS BY THE GRANTEE WOULD APPEAR EQUALLY APPLICABLE TO GRANTS MADE BY THE FOUNDATION FOR BASIC SCIENTIFIC RESEARCH. CONSEQUENTLY, IF EXPENDITURES FOR THE PURCHASE, MAINTENANCE OR OPERATION OF AIRCRAFT ARE ADMINISTRATIVELY DETERMINED TO BE REQUIRED FOR THE EFFECTIVE ACCOMPLISHMENT OF THE PURPOSE OR OBJECTS FOR WHICH A RESEARCH GRANT IS MADE, NO OBJECTION WILL BE INTERPOSED THERETO SOLELY BY REASON OF THE RESTRICTIVE PROVISIONS OF 5 U.S.C. 78 (B), WHICH FOR THE REASONS STATED HAVE NO APPLICATION TO SUCH RESEARCH GRANTS. THE FIRST QUESTION PRESENTED IS ANSWERED ACCORDINGLY.

WITH REFERENCE TO THE SECOND QUESTION PRESENTED, THE PROPRIETY OF REIMBURSEMENT OF COSTS INCURRED BY A CONTRACTOR IN CONNECTION WITH THE USE OF AIRCRAFT NECESSARY TO CARRY OUT RESEARCH ACTIVITIES, LIKE ALL OTHER COSTS FOR WHICH CONTRACTORS ARE TO BE REIMBURSED BY THE GOVERNMENT UNDER A COST-REIMBURSEMENT CONTRACT, DEPENDS PRIMARILY ON THE TERMS OF THE PARTICULAR CONTRACT INVOLVED AND ON THE FACTS PERTAINING TO A PARTICULAR TRANSACTION RATHER THAN ON CONSIDERATIONS GOING TO THE STATUS BETWEEN THE GOVERNMENT AND A CONTRACTOR OPERATING UNDER A COST-TYPE CONTRACT. ALABAMA V. KING AND BOOZER, ET AL., 314 U.S. 1. CF. UNITED STATES V. LIVINGSTON, 179 F.SUPP. 9 (1959), AFFIRMED 364 U.S. 281; UNITED STATES V. BOYD (TENN. 1962) 363 S.W.2D 193.

AS A GENERAL PROPOSITION AND CONSIDERING THE AUTHORITY OF THE FOUNDATION TO INITIATE AND SUPPORT BASIC SCIENTIFIC RESEARCH, CONTRACTS EXECUTED BY THE FOUNDATION FOR SUCH PURPOSES MAY BE ENTERED INTO ON SUCH TERMS AND CONDITIONS AS DEEMED NECESSARY AND PROPER, IF NOT OTHERWISE PROHIBITED OR RESTRICTED BY LAW, AND TO THE EXTENT AND UNDER THE CONDITIONS ATTACHING TO APPROPRIATIONS MADE AVAILABLE THEREFOR.

AS INDICATED ABOVE, THERE APPEARS NOTHING IN THE LANGUAGE OF THE APPROPRIATION TO THE FOUNDATION WHICH WOULD AUTHORIZE THE USE THEREOF FOR THE ACQUISITION OR USE OF AIRCRAFT TO CARRY OUT THE STATUTORY DUTIES AND RESPONSIBILITIES OF THE FOUNDATION. MOREOVER, WE ARE AWARE OF NOTHING WHICH MAY BE CONSTRUED AS AUTHORIZING THE FOUNDATION TO WAIVE OR DISREGARD THE PROHIBITION AGAINST THE USE OF AIRCRAFT BY ELECTING TO ACCOMPLISH ITS STATUTORY PURPOSES THROUGH COST-TYPE REIMBURSEMENT CONTRACTS.

IN VIEW THEREOF, WE THINK THAT THE STATUTORY RESTRICTIVE PROVISIONS OF 5 U.S.C. 78 (B), WOULD PRECLUDE REIMBURSEMENT TO A COST REIMBURSEMENT CONTRACTOR, OPERATING A FEDERALLY OWNED RESEARCH CENTER, FOR COSTS INCURRED BY THE CONTRACTOR IN OBTAINING THE USE OF AIRCRAFT NECESSARY TO CARRY OUT RESEARCH ACTIVITIES AT THE CENTER.

IN THIS CONNECTION, THERE WAS INFORMALLY MADE AVAILABLE FOR OUR EXAMINATION A COPY OF THE CONTRACT (NSF-C160) ENTERED INTO BETWEEN THE FOUNDATION AND THE UNIVERSITY CORPORATION FOR ATMOSPHERIC RESEARCH. THE TERMS OF ARTICLE 10 (8), PAGE 16, THEREOF, WHICH WE UNDERSTAND TO BE A STANDARD PROVISION INCLUDED IN OTHER CONTRACTS BETWEEN THE FOUNDATION AND NATIONAL RESEARCH CENTERS, THE CONTRACTOR IS REQUIRED TO "OBTAIN THE WRITTEN APPROVAL OF THE FOUNDATION BEFORE (I) MAKING ANY COMMITMENT REGARDING THE PURCHASE, LOAN OR RENTAL OF MOTOR VEHICLES, TYPEWRITERS, PRINTING EQUIPMENT, AIRCRAFT, OR OTHER TYPES OF MATERIALS OR EQUIPMENT OF WHICH THE DIRECT PURCHASE BY THE GOVERNMENT MAY BE RESTRICTED FROM TIME TO TIME BY LAW OR REGULATION * * *.'

IT WOULD THUS APPEAR THAT THE PROCEDURE FOLLOWED BY THE FOUNDATION AND THE CONTRACTOR WITH REFERENCE TO THE ACQUISITION AND USE OF CERTAIN EQUIPMENT, INCLUDING AIRCRAFT, IS IN RECOGNITION OF THE REQUIREMENT FOR STRICT OBSERVANCE OF THE STATUTORY LIMITATIONS APPLICABLE TO THE EXPENDITURE OF FOUNDATION FUNDS; AND THAT AN EXCEPTION TO THE PLAIN AND EXPRESS PROVISIONS OF 5 U.S.C. 78 (B) MUST BE SUBJECT OF REMEDIAL LEGISLATION BY THE CONGRESS, A MATTER WHICH IT IS STATED IN THE LETTER THE NATIONAL SCIENCE FOUNDATION PLANS TO INCLUDE IN ITS 1965 APPROPRIATION REQUEST.