B-123368, MAY 12, 1955, 34 COMP. GEN. 596

B-123368, MAY 12, 1955, 34 COMP. GEN. 596

APPROPRIATIONS - OBLIGATION - CONTRACTS - QUANTITY VARIATIONS - LUMBER PROCUREMENT LUMBER PROCUREMENT CONTRACTS WHICH CONTAIN THE STANDARD VARIATIONS CLAUSE PERMITTING TEN PERCENT OVERSHIPMENT OR UNDERSHIPMENT MAY BE RECORDED AS OBLIGATIONS IN THE MAXIMUM QUANTITIES DELIVERABLE WITHOUT VIOLATING SECTION 1311 OF THE SUPPLEMENTAL APPROPRIATION ACT, 1955, CONCERNING RECORDING OF OBLIGATIONS.

COMPTROLLER GENERAL CAMPBELL TO THE HONORABLE GEORGE SMATHERS, UNITED STATES SENATE, MAY 12, 1955:

FURTHER REFERENCE IS MADE TO YOUR COMMUNICATION OF MARCH 23, 1955, TRANSMITTING A LETTER DATED MARCH 1, FROM THE LOGAN LUMBER COMPANY, TAMPA, FLORIDA, TOGETHER WITH A LETTER DATED MARCH 18, FROM THE ASSISTANT CHIEF OF ENGINEERS FOR MILITARY SUPPLY, DEPARTMENT OF THE ARMY. THIS WILL ALSO ACKNOWLEDGE RECEIPT OF YOUR LETTER OF MAY 4, 1955.

THE COMPANY STATES THAT FOR MANY YEARS GOVERNMENT LUMBER PROCUREMENT CONTRACTS HAVE PERMITTED A TEN/PERCENT OVERSHIPMENT OR UNDERSHIPMENT OF THE QUANTITY ORDERED BUT THAT CURRENT CORPS OF ENGINEERS' CONTRACTS PRECLUDE ANY UPWARD VARIATIONS IN QUANTITY. BECAUSE OF THE DELAYS AND EXPENSES OF ASCERTAINING, DURING LOADINGS, THAT THE QUANTITIES OF LUMBER SHIPPED DO NOT EXCEED THOSE CALLED FOR IN THE CONTRACT, THE COMPANY URGES THAT THE FORMER UPWARD VARIATION PROVISION BE RESTORED.

THE ASSISTANT CHIEF OF ENGINEERS FOR MILITARY SUPPLY HAS STATED THAT PROCEDURES IN EFFECT PRIOR TO THE PASSAGE OF THE SUPPLEMENTAL APPROPRIATION ACT, 1955, APPROVED AUGUST 26, 1954, 68 STAT. 800, PERMITTED RECORDING OBLIGATIONS, UNDER LUMBER PROCUREMENT CONTRACTS WHICH CONTAINED PROVISIONS FOR UPWARD VARIATION IN QUANTITIES, IN THE MAXIMUM AMOUNTS PAYABLE THEREUNDER AS A SAFEGUARD AGAINST VIOLATIONS OF THE ANTI- DEFICIENCY ACT, REVISED STATUTES 3679, AS AMENDED, 31 U.S.C. 665. HOWEVER, WHILE AGREEING THAT THE CURRENT ADMINISTRATIVE RESTRICTION AGAINST UPWARD VARIATION "PROHIBITS THE NORMAL FLEXIBILITY OF THE STANDARD VARIATIONS CLAUSE COMMON TO SUCH PROCUREMENT CONTRACTS," HE CONSTRUES SECTION 1311 OF THE SUPPLEMENTAL APPROPRIATION ACT, 1955, 68 STAT. 830, AS PERMITTING RECORDING OF OBLIGATIONS ONLY IN THE STATED (INSTEAD OF MAXIMUM) AMOUNT OF SUCH CONTRACTS.

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

(D) NO APPROPRIATION OR FUND WHICH IS LIMITED FOR OBLIGATION PURPOSES TO A DEFINITE PERIOD OF TIME SHALL BE AVAILABLE FOR EXPENDITURE AFTER THE EXPIRATION OF SUCH PERIOD EXCEPT FOR LIQUIDATION OF AMOUNTS OBLIGATED IN ACCORD WITH SUBSECTION (A) HEREOF; BUT NO SUCH APPROPRIATION OR FUND SHALL REMAIN AVAILABLE FOR EXPENDITURE FOR ANY PERIOD BEYOND THAT OTHERWISE AUTHORIZED BY LAW.

INASMUCH AS THE STANDARD PERMISSIBLE VARIATION OF TEN PERCENT OVERSHIPMENT OR UNDERSHIPMENT OF THE QUANTITY ORDERED IS REPORTED TO BE COMMON TO LUMBER PROCUREMENT CONTRACTS, IT IS OUR VIEW THAT RECORDING THE AMOUNT NECESSARY TO PAY FOR THE MAXIMUM QUANTITIES DELIVERABLE DOES NOT VIOLATE THE LETTER OR THE SPIRIT OF SECTION 1311. THE SECRETARY OF DEFENSE IS BEING SO ADVISED BY LETTER OF TODAY.

ACCORDINGLY, WHILE WE PERCEIVE NOTHING IN SECTION 1311 WHICH REQUIRES THE CORPS OF ENGINEERS TO RESTRICT THE USUAL UPWARD VARIATIONS IN QUANTITIES OF LUMBER, THEIR PRESENT PRACTICE IN THAT REGARD IS AN ADMINISTRATIVE MATTER OVER WHICH WE HAVE NO CONTROL.