said section 6 does not deprive him of the right to be retired under some other statute which may be more beneficial to him.

I find no indication, either in section 6 itself or in its legislative history, tending to show that an officer is authorized to first take advantage of that section, be retired in his temporary grade or rank with retired pay based on his active duty pay authorized in such temporary status, and then be advanced to a higher grade pursuant to section 3 of the act of January 12, 1923, because he had completed 40 years service. It seems clear that the provision contained in section. 3 of the act of January 12, 1923, supra, is intended to operate only upon the permanent rank of officers of the Coast Guard who are otherwise entitled to its benefits and that it has no reasonable application to an officer who received a higher temporary rank, under a wartime measure, shortly before reaching the statutory retirement age. To construe such provision otherwise would create discrimination among Coast Guard officers by conferring greater benefits upon the officer reaching retirement age between the effective dates of the acts of July 24, 1941, and June 30, 1942-as to which see section 7 of the latter act-than upon officers temporarily promoted at the same time, or even earlier, who because younger in age may serve on the active list under such temporary appointments beyond such effective date and then revert to their lower permanent grade or rank as required by said acts before reaching retirement age.

Accordingly, it is concluded that the officer is not entitled to be retired with the rank and pay of one grade higher than his present temporary rank of lieutenant commander.

(B-38155)

ADVERTISING-CONCLUSIVENESS OF ADMINISTRATIVE DETERMINATIONS AS TO NONNECESSITY-REPRODUCTION OF MOTION PICTURE FILMS IN COLOR

Administrative conclusions that a particular firm would have an advantage in competitive bidding for the production of color prints of a motion picture film by reason of its association with the production of the original film, and that it is the only firm possessing the necessary equipment and qualifications for such work, do not justify award of a contract to such firm without advertising for bids pursuant to section 3709, Revised Statutes. Comptroller General Warren to the Federal Security Administrator, November 30, 1943:

I have your letter of November 4, 1943, requesting decision whether advertising for bids is required under section 3709, Revised Statutes, in connection with the procurement of 175 prints of a certain motion picture film in color "dealing with the diagnosis and management of

gonorrhea." It is stated that such film was produced by Hugh Harman Productions, Inc., the low bidder on an invitation to bid issued January 4, 1943, by the Public Health Service and sent to producers of animated cartoon motion pictures, and that such production was accomplished under a cooperative agreement between the contractor and the Technicolor Motion Picture Corporation of Hollywood, California, covering the phase of the work involving the use of Technicolor as the color process. The facts pertinent to your present inquiry are described in your letter as follows:

The Public Health Service now desires to purchase a total of 175 prints of this sound film for the purpose of instructing its own medical personnel and that of State health departments in the diagnosis and management of gonorrhea. Of this number, 150 prints must be 16 mm. and 25 prints must be 35 mm. in size. This medical teaching film is the only one in existence on the subject of gonorrhea. Among those who will receive instruction from it are Public Health Service medical officers assigned to the Coast Guard, United States Marine Hospitals, the War Shipping Administration and State and local health departments. Also, prints of the film will be lent to State health departments for instructing physicians in programs cooperating with the Public Health Service. Therefore, it is of paramount importance that the prints exemplify the very highest type of color photography and that they be of uniform excellence.

It is generally conceded throughout the motion picture industry that the Technicolor Motion Picture Corporation owns the only color process capable of producing identical prints of a consistently high quality from a given set of negatives, although there is at least one, and possibly two firms, other than Technicolor, which make up 35 mm. color prints. The Surgeon General, after consultation with motion picture specialists attached to his staff and after independent study, has determined that the best interests of the United Sates would be served by having these 175 prints made by Technicolor-which has been identified with this particular film since its inception-rather than by another firm not identified with the filming of the picture. The Surgeon General believes further that no producer other than Technicolor could take negatives made by Technicolor and manufacture satisfactorily both 35 mm. and 16 mm. prints. Because of the difficulty of objective description of all the different color gradations in a continuously projected image of organs of the human body under normal and pathological conditions, the drafting of specifications which would assure the Government of a satisfactory product would be impracticable. Furthermore, in any competitive bidding Technicolor would be at a distinct advantage. Because of its association with the Harman studio during the making of the film, Technicolor now owns certain negative materials, as well as certain data gathered from tests on the negatives themselves that would not be available to competitors.

Your advice is requested as to whether, under these conditions, Sec. 3709 of the Revised Statutes (41 U. S. C. Sec. 5) requires the issuance of invitations for bids on furnishing the 175 prints or whether the requirements of the statute would be met if the Public Health Service should place the order with Technicolor without inviting competitive bidding.

Reference is made in your letter to certain decisions of this officespecifically 16 Comp. Gen. 318, 19 id. 523 and 20 id. 862-involving section 3709, Revised Statutes, but it is stated that an examination of such decisions has failed to resolve the doubt in the instant matter. The first decision cited by you, 16 Comp. Gen. 318, states as a general proposition that conclusions or opinions of contracting officers that only one manufacturer can comply with certain specifications may not be accepted as controlling in such matters, the only practicable

way of determining such fact being to advertise for bids. See, also, 16 Comp. Gen. 171, 20 id. 368; B-11505, April 18, 1941. The limited nature of the permissible exercise of administrative discretion in such matters is referred to in the case of United States v. Purcell Envelope Company, 249 U. S. 313, 318, as follows:

There must be a point of time at which discretion is exhausted. The procedure for the advertising for bids for supplies or services to the Government would else be a mockery-a procedure, we may say, that is not permissive but required (§ 3709, Rev. Stat.). By it the Government is given the benefit of the competition of the market and each bidder is given the chance for a bargain. It is a provision, therefore, in the interest of both Government and bidder, necessarily giving rights to both and placing obligations on both. And it is not out of place to say that the Government should be animated by a justice as anxious to consider the rights of the bidder as to insist upon its own. And, we repeat, there must be some point at which discretion ceases and obligation takes its place. *

On the other hand, it has been held, as pointed out in your letter, that where it is clearly established that advertising for bids would serve no useful purpose, as in the purchase of patented or copyrighted articles, procurement of the goods without competitive bids is authorized. 2 Comp. Dec. 632; 1 Comp. Gen. 748; 5 id. 963; 7 id. 282; 17 Op. Atty. Gen. 684. Cf. 14 Comp. Dec. 328; 22 id. 302; 16 Comp. Gen. 777.

It is understood from your letter that by virtue of the prior association of Technicolor Corporation with the production of this film, such corporation now owns "certain negative materials, as well as certain data gathered from tests on the negatives themselves that would not be available to competitors." However, it is not understood that the exclusive possession of such materials and data by Technicolor Corporation would render impossible the production of prints of the film by any other qualified firm. Nor is there any indication that Technicolor Corporation has a proprietary interest in the film such as would render actionable the production of prints by other than said corporation. Thus, decisions involving sole sources of supply due to the existence of patents or copyrights appear to have no direct application to the instant case.

In 19 Comp. Gen. 523, the question was whether a contract to manage and operate property under control of the Federal Housing Administration could be consummated with an individual or firm known to be experienced in such type of operation without resorting to public bidding under section 3709, Revised Statutes. This office recognized that such work involved to a high degree the elements of personal qualifications of those to be charged with responsibility for its successful accomplishment and held that "it may be considered that there has been compliance with said section 3709, Revised Statutes, if in any given case bids be asked of only those persons or concerns found to be responsible, competent, capable, adequately equipped and

prepared to render such services to the Administration satisfactorily in the city or town where such property may be located, the contract, if the bid be otherwise proper, to be awarded to the lowest of such selected bidders." But what was said and concluded therein with respect to "management contracts" is hardly germane to a contract for the production of prints of a motion picture film.

It is stated that in any competitive bidding, Technicolor Corporation would be at a distinct advantage. But such fact-if it be a factis not considered sufficient to warrant the conclusion that advertising for bids would serve no useful purpose. The only way to determine the extent of such advantage and the consequent benefit to the Government deriving therefrom, would appear to be to advertise for bids. Nor does there appear to be an "exigency" in connection with the procurement of these prints such as might justify a failure to solicit bids. See, in this connection, 14 Comp. Gen. 875, and authorities cited therein. In other words, the sole basis for the proposal to dispense with advertising in the instant case is the opinion of the Surgeon General that the Technicolor Motion Picture Corporation is the only firm in the United States which possesses the necessary equipment and the requisite qualifications to produce successfully the 175 prints in question. And, considered in that light, the instant case falls squarely within the principle stated in 16 Comp. Gen. 318, supra, namely, that there may not be accepted as controlling in such matters, administrative determinations based solely upon opinion or hearsay that only one manufacturer or supplier possesses the necessary qualifications to perform certain work or furnish certain supplies.

Accordingly, you are advised that upon the facts stated in your letter, bids should be solicited and the award of contract made to the low bidder possessing the necessary qualifications for the work.

(B-38185)

WAR OVERTIME PAY ACT OF 1943-CONTRACT SPECIALISTS Contract officers or employees, as distinguished from contractors employed on a nonpersonal-service basis-generally those who do not work under the supervision and control of the Government-are entitled to the applicable benefits of the War Overtime Pay Act of 1943, whether working on a full time or intermittent basis. The limitation of $25 per day imposed by the Naval Appropriation Act, 1944, on the daily rate of compensation that may be paid contract specialists relates only to the basic compensation of such persons, and, therefore, such a contractor receiving the $25 maximum rate is entitled to the additional compensation authorized by the War Overtime Pay Act of 1943, even though his contract specifically excludes payment of such additional compensation. While the Navy Department is not required to take the initiative in adjusting short payments of compensation resulting from administrative error in deny

ing its contract employees the benefits of the War Overtime Pay Act of 1943, it is entirely proper to do so-the payments to be made by the disbursing officer-provided the employees are now on the rolls.

Comptroller General Warren to the Secretary of the Navy, November 30, 1943: I have your letter of November 4, 1943 (file PLD/RCMcC: jhf), as; follows:

In a decision of July 12, 1943 (B-35339) [23 Comp. Gen. 17] to the Chairman of the Board of Economic Warfare, the Acting Comptroller General ruled that contract employees of such agency were entitled to the benefits of the War Overtime Pay Act of 1943 (Public Law 49, 78th Congress), approved May 7, 1943. In a further decision dated October 5, 1943 (B-37154) [23 Comp. Gen. 260] you remarked that an employee of the War Department, paid at the rate of $25 per day, was also entitled to any additional compensation as might be payable to him under the terms of the War Overtime Pay Act of 1943.

It seems clear to me in the light of these decisions that the persons employed by the Navy Department on a contract basis are entitled to additional compensation for overtime work under the pertinent provisions of the War Overtime Pay Act. You will note, however, from the enclosed directive of the Assistant Secretary of the Navy, dated May 17, 1943, with respect to overtime compensation (paragraph 3 (c)), that the Navy Department excluded contract employees from the benefits of the Act. While this exclusion appears erroneous under your recent decisions, I want to have your advice specifically as to Navy contract employees, because of a possible distinction between such employees and the employees of the Board of Economic Warfare and the War Department discussed in your earlier decisions.

I understand from the Office of Economic Warfare that the statutory authority for its employment of consultants on a contract basis does not impose any limit upon the daily rate of pay, but that the Board of Economic Warfare had limited the top daily rate paid to such consultants to $25 by administrative regulation. The Secretary of the Navy is authorized by the current appropriation act (Public Law 92, 78th Congress, approved June 26, 1943) to employ scientists and technicists "at a rate of pay not exceeding $25 per diem" (note the appropriations for the purposes of the several bureaus and the general authority granted in Section 114 of the Act). The provisions of the Naval Appropriation Act, 1944, are substantially the same as those contained in Naval Appropriation Acts of previous years.

As to Navy employees who are paid under contract at a rate of less than $25 per day (from $10 to $22 per day, for example), and who would be entitled, if the War Overtime Act is applicable, to overtime which would not bring their average daily pay to an amount over $25 per day, I can see no alternative but that your decisions govern and that such employees are entitled to overtime compensation.

My main question is whether Navy contract employees being paid $25 per day, the statutory limit, are covered by the Act. Our primary reason, I suppose, for excluding contract employees from overtime compensation in the May 17, 1943 directive was the possible argument that contract employees receiving $25 per day under their contracts would be obtaining compensation in excess of the statutory limitation if we made provision for overtime payments to them. All Navy contract employees are engaged at a stipulated daily rate of pay with no contract provision for overtime, with the single exception of Naval Research Laboratory employees, whose contracts call for pay on the basis of an eight-hour day with overtime at the rate of one-eighth of the daily rate, for all hours worked daily in excess of eight within the $25 statutory limit.

Upon reflection and consideration of your decisions, I am inclined to believe that this decision by the Navy Department was in error. The Act of course applies to Civil Service employees, whose compensation within the several grades is fixed at a top statutory limit comparable to the top $25 limit for Navy contract employees although the Civil Service ceilings are on an annual basis. The War Overtime Pay Act applies to all "civilian officers and employees," and Section 3 (a) would appear almost expressly to cover contract employees, who are not regularly required to work a specific minimum number of hours. Furthermore, the quotation in the July 12, 1943 decision of the Acting Comptroller General from the