Canal Company for duty on vessels transiting the Panama Canal, as required by Rule 26 of Executive Order No. 4314, dated September 25, 1925, as amended by Executive Order No. 9227, dated August 19, 1942, are entitled to overtime compensation under section 201 of the Federal Employees Pay Act of 1945, 59 Stat. 296, and to night differential and holiday extra compensation under sections 301 and 302, respectively, of such act as amended by sections 10 and 11 of the Federal Employees Pay Act of 1946, 60 Stat. 218.

Prior to July 1, 1951, Panama Canal pilots were employees of the agency known as The Panama Canal. It was held by the Civil Service Commission under authority of section 203 of the Classification Act of 1949, 63 Stat. 956, that such employees were within the exception of section 202 (8) of that act, 63 Stat. 955, relative to "officers and members of crews of vessels." As a result of that holding, it was held in Office decision of October 16, 1950, 30 Comp. Gen. 158, as follows (quoting the syllabus):

Panama Canal pilots having been held by the Civil Service Commission to be officers or members of crews of vessels within the meaning of section 202 (8) of the Classification Act of 1949 and, as such, excepted from the compensation provisions of that Act, it is mandatory under said section that their compensation be fixed and adjusted from time to time as nearly as is consistent with the public interest in accordance with prevailing rates and practices in the maritime industry; also, the effect of section 202 (8) is to render inapplicable to such pilots the overtime compensation provisions of section 201 of the Federal Employees Pay Act of 1945, as amended.

As stated in your letter, by section 3 of Executive Order 10263, dated June 29, 1951-effective July 1, 1951-issued pursuant to Public Law 841, 81st Congress, approved September 26, 1950, there were transferred to the Panama Railroad Company certain personnel of The Panama Canal, including the pilots here involved. Also, the name of the Panama Railroad Company was changed to "Panama Canal Company," and the name of the agency previously known as The Panama Canal was changed to "Canal Zone Government."

According to the copy of a letter dated August 6, 1951, from the Chairman of the Civil Service Commission to you which accompanied your letter, it was held by the Commission that the pilots now are within the excluding provisions of section 202 (20) of the Classification Act of 1949, 63 Stat. 956, relative to the Panama Railroad Company (now the Panama Canal Company), and that no other excluding paragraph of said section 202 has any application.

In consequence of the organizational changes related above and the pertinent laws, you state that it appears Panama Canal pilots again are subject to the provisions of the Federal Employees Pay Act of 1945, as amended, unless they are "vessel employees" of the Panama Canal Company within the meaning of section 102 (d) of that act, 59 Stat. 296, which provides that "This Act, except sections 606 and

*

*

607, shall not apply to vessel employees of the Panama Railroad Company." You point out that at the time of the enactment of the 1945 pay act, employees on ships operated by the Panama Railroad Company were the vessel employees intended to be excluded by section 102 (d).

I am of the opinion that the term "vessel employees of the Panama Railroad Company," as used in section 102 (d) of the 1945 pay act has no different scope now from what it had at the time of enactment; that is to say, such term originally included only employees employed on vessels operated by the Panama Railroad Company and the fact that Panama Canal pilots now are employees of the Panama Canal Company, the successor corporation, together with the fact that the pilots might broadly be viewed as "vessel employees" does not serve to bring such employees within the exemption provisions of section 102 (d). Upon that basis, and in view of the provisions of section 101 (a) of the Federal Employees Pay Act of 1945, 59 Stat. 295, applying the additional compensation provisions under consideration to employees of Government-owned or controlled corporations, it would appear that, effective from July 1, 1951, Panama Canal pilots are subject to the overtime compensation, night differential and holiday extra compensation provisions of said 1945 act, as amended. It appears from the last paragraph of the above-mentioned letter of August 6, 1951, from the Chairman of the Civil Service Commission, that the Panama Canal Company will continue to fix the pay of pilots in accordance with rates in the maritime industry. In that connection, it is assumed that the basic compensation so fixed will be a true basic rate for a 40-hour workweek; otherwise, there would appear to be doubt whether the overtime compensation rates prescribed by section 201 of the 1945 act, 59 Stat. 296, would be for application to such basic compensation. Cf. Bay Ridge Operating Company v. Aaron, 334 U. S. 446, 464-465.

In further reference to the matter, there has been noted the suit now pending in the Court of Claims in the case of Elmer G. Abbott, et al. v. United States, C. Cls. No. 50208, wherein each of the 86 plaintiffs seeks to recover extra compensation for services performed since July 1, 1945, on Sundays and holidays and overtime "on any days of the week therein," as Panama Canal pilots-the claims, according to paragraph 3 of the petition, being founded upon "the Federal Employees Pay Act of 1945 (section 203) and the Classification Act of 1949."

[B-105016]

Contracts-Assignments-Set-Off Rights

Payments due under a Government contract containing a "no set-off" clause which have been assigned pursuant to the Assignment of Claims Act of 1940 may not be set-off against an indebtedness of the contractor to the United States arising independently of said contract.

A partnership engaged in financing small and undercapitalized businesses either through loans or direct purchase and resale that loaned money to a contractor to assist in performance of a Government contract may be considered a proper assignee under the Assignment of Claims Act of 1940 and therefore entitled to receive amounts to become due under the contract which have been assigned to said partnership.

Comptroller General Warren to Major A. E. Lafaver, Department of the Army, September 13, 1951:

Reference is made to your letter of July 20, 1951, transmitting a voucher stated in favor of Oakley and Kingsbery, assignees of the G. I. Surplus Distributing Company, with the request that an advance decision be rendered as to the propriety of payment on the voucher.

The voucher is in the amount of $13,920.88, representing the contract price for certain Quartermaster supplies delivered by the G. I. Surplus Distributing Company to Fort Hood, Texas, under contract No. DA-41-093-AIV-294, dated April 23, 1951. Paragraph 8 of the general provisions of the contract permitted the assignment of moneys coming due thereunder pursuant to the provisions of the Assignment of Claims Act of 1940, and on April 27, 1951, the G. I. Surplus Distributing Company assigned all the contract proceeds to the partnership of Oakley and Kingsbery. It appears that a judgment in the amount of $19,418.24 subsequently was obtained by the United States against the G. I. Surplus Distributing Company, representing the balance due on some $90,000 worth of surplus property purchased on credit several years ago from the War Assets Administration.

Your doubt as to the propriety of the proposed payment to the assignee is twofold. First, whether the partnership of Oakley and Kingsbery may be considered a proper assignee under the Assignment of Claims Act, and second, whether the indebtedness of the G. I. Surplus Distributing Company to the United States is one "arising independently" of the instant contract, which would preclude set-off by the Government against the assigned contract proceeds.

Under the Assignment of Claims Act of 1940, 54 Stat. 1029, 31 U.S. C. 203, moneys due from the United States under a contract providing for payments of $1,000 or more may be assigned:

to a bank, trust company, or other financing institution, including any Federal lending agency: Provided,

3. That unless otherwise expressly permitted by such contract any such assignment shall cover all amounts payable under such contract and not already paid, shall not be made to more than one party, and shall not be subject to further assignment, except that any such assignment may be made to one party as agent or trustee for two or more parties participating in such financing

The Assignment of Claims Act, 54 Stat. 1030, further provides that certain contracts may contain a "no set-off" clause, as does the contract here involved, in which event payments to be made to an assignee

shall not be subject to reduction or set-off for any liability of any nature of the assignor to the United States or any department or agency thereof which arises independently of such contract

*

The question whether the indebtedness of the G. I. Surplus Distributing Company to the United States is one arising independently of the instant contract must be answered in the affirmative. Even if it be assumed that some part of the supplies furnished under the contract were purchased as surplus from the War Assets Administration and that payment therefor has not been made, it seems apparent that the debt as such is entirely independent of the contract here involved, which did not even come into existence until several years after the debt arose.

With respect to the question whether the partnership of Oakley and Kingsbery may be considered proper assignees under the Assignment of Claims Act, there were submitted letters from three leading banks in Austin, Texas, written on behalf of the assignees, wherein it is stated that the firm of Oakley and Kingsbery has been for a number of years engaged in financing small and undercapitalized businesses, either through loans or direct purchase and resale. It appears that loans totalling in excess of $13,000 were made by Oakley and Kingsbery on the security of the instant assignment, a large part of which was used to purchase property to be delivered under the assigned contract. It is further understood that interest at the rate of six percent per annum is payable by the contractor on such loans. It appears, therefore, that Oakley and Kingsbery are and have been engaged in business, at least in part, as a financing institution, and that they did lend money to the G. I. Surplus Distributing Company to assist them in performing their contract with the Department of the Army.

Under the circumstances you are advised that the assignment to Oakley and Kingsbery may be recognized as a valid assignment under the Assignment of Claims Act, and payment on the voucher submitted is authorized, if otherwise correct.

The voucher and accompanying papers are returned herewith.

[B-105021]

Taxicab Fares-Travel Within Limits of Official Duty Station

Employees who use taxicabs within their official stations in connection with dayto-day operations may be reimbursed fares and tips on a monthly basis, provided the travel is properly approved on the voucher as advantageous to the Government, as required under paragraph 11 of the Standardized Government Travel Regulations, and a uniform and reasonable basis for allowing tips is established. Acting Comptroller General Yates to the Administrator, General Services Administration, September 17, 1951:

Reference is made to your letter of July 26, 1951, requesting decision with respect to the method of reimbursement and the amount which may be reimbursed for use of taxicabs within the official station of officials of your Administration in connection with day-to-day operations.

You state that under the procedures being drafted by your Administration, reimbursement will be allowed upon a monthly basis upon submission of a voucher listing the dates, points of travel, and the actual amounts paid. The three questions and related information, are stated by you, as follows, and will be answered in the order presented.

1. Will it be permissible to claim reimbursement on Standard Form No. 1129, Voucher for Petty Purchases?

2. Vouchers will be approved by authorized officials in accordance with paragraph 11 of the Standardized Government Travel Regulations. Will special or additional certificates be required by payee or approving official?

3. Custom dictates the giving of small amounts in addition to the regular fares for taxi hire as tips. These items are reimbursed to travelers from their per diem allowance for travel away from their official station. Would it be permissible to also reimburse officials for tips paid to taxi drivers for transportation furnished at their headquarters? If these reimbursements are permissible, appropriate administrative controls will be established to allow payment of tips commensurate with the fare paid.

There is no present objection to reimbursement being claimed on Standard Form No. 1129 and your first question is answered in the affirmative.

Under paragraph 11 of the Standardized Government Travel Regulations, it is required that the approval for use of taxicabs at official station specifically must state that the use thereof was advantageous to the Government. Thus, the mere approval of the voucher without the required determination of advantage will not suffice. However, no necessity is perceived for more than a single properly worded administrative approval on the voucher, nor for other than the payee's usual certification as to the correctness of the voucher and nonreceipt of payment or credit. Question 2 is answered accordingly.