Section 3709 of the Revised Statutes and other statutes relative to contracting for Government needs contemplate acquisition of property of all types at the price most advantageous to the Government, thus safeguarding expenditure of Government moneys. (6 Comp. Gen. 557.) These statutes have been interpreted consistently by the courts and this Office as requiring acceptance of the proposal of the lowest responsible bidder making an offer meeting the Government's needs. Departure from this for reasons outlined in your letter is not authorized.

The Government in its capacity as a purchaser is distinct from the Government or a corporate agency thereof in its capacity as a lender of money. Government agencies charged with the lending of Government funds operate in a separate field, and it is to be assumed that they will observe the provisions of statutes requiring adequate security for all loans to safeguard the interests of the United States. In any event, the Government as a contractor is not concerned with the ultimate collection of moneys loaned by a governmental agency authorized to make loans.

In answer to the specific question presented, I have to advise that there would have been no legal authority for giving preference to the highest bidder, merely because of its indebtedness to the Reconstruction Finance Corporation.

(A-56394)

COMPENSATION-AUTOMATIC PROMOTIONS-POLICEMEN, FIREMEN, AND TEACHERS, DISTRICT OF COLUMBIA

Policemen, firemen, and teachers in the service of the District of Columbia, entitled by law to automatic increases in compensation, are entitled to the benefit of section 24 of the act of March 28, 1934, 48 Stat. 523, as amended and clarified by the act of June 27, 1934, 48 Stat. 1265, restoring the right to receive automatic increases in compensation during the fiscal year 1935, based on length of service, including service rendered during the fiscal years 1933 and 1934, when the right to receive such increases was suspended by operation of section 201 of the Economy Act. Section 21 (e) of the act of March 28, 1934, 48 Stat. 522, provides an appropriation for the fiscal year 1935 of so much as may be necessary to pay increases in compensation resulting from automatic promotions made effective on or after July 1, 1934, pursuant to the provisions of section 24 of the same act, as amended and clarified by the act of June 27, 1934, 48 Stat. 1265.

Comptroller General McCarl to the President, Board of Commissioners, District of Columbia, July 7, 1934:

There has been received your letter of June 28, 1934, as follows: The Commissioners of the District of Columbia respectfully request your consideration and decision to the matter hereinafter presented.

The Commissioners are advised that the President on June 27, 1934, approved H.R. 9867, Seventy-third Congress, second session, entitled "An act amending the Independent Offices Appropriation Act of 1935." While the Commissioners

have not before them a copy of this act, it is understood that it reads in the manner following as to section 1 thereof:

"That in the administration of the provisions of subparagraph (1) of section 24 of the Independent Offices Appropriation Act for 1935, amending section 201 of part II of the Legislative Appropriation Act for the fiscal year 1933, all services rendered by postal and other officers and employees prior to July 1, 1932, and subsequent to June 30, 1932, shall be credited to the employees and such employees promoted to the grade to which they would have progressed had section 201 (suspending automatic increases in compensation of part II of the Legislative Appropriation Act, fiscal year 1933, not been enacted."

Subparagraph (1) of section 24 of the Independent Offices Appropriation Act, fiscal year 1935, provides:

"(1) Section 201 (suspending automatic increases in compensation) of part II of the Legislative Appropriation Act, fiscal year 1933, is amended by inserting at the end thereof the following: This section shall not apply during the fiscal year ending June 30, 1935, except to the extent that it suspends the longevity increases provided for in the tenth paragraph of section 1 of the Pay Adjustment Act of 1922. This amendment shall not authorize the payment of back compensation.'"

The Commissioners of the District of Columbia are concerned with this matter as in their opinion it involves the payment of automatic increases to officers and teachers in the public schools and to privates in the police department and the fire department of the District of Columbia.

Compensation of officers and teachers in the public schools of the District of Columbia is governed by the provisions of the act of June 4, 1924 (43 Stat. 367-375). This act provides for an annual increase (automatic increase) of $100 a year for officers and teachers, with the exception of first assistant superintendents, for whom the rate of increase is $200 a year, and the superintendent of schools, for whom the annual increase is $1,000 a year for two years, or until a maximum salary of $10,000 a year is reached. The superintendent of schools and the two first assistant superintendents are now drawing the maximum salary allowable by law.

The salaries of policemen and firemen are governed by the act approved July 1, 1930 (46 Stat. 839-841). This act provides for an annual increase in the pay of privates of $100 a year until a maximum salary of $2,400 a year is reached.

Section 201 of part II of the Legislative Appropriation Act, fiscal year 1933. provides

"All provisions of law which confer upon civilian or noncivilian officers or employees of the United States Government or the municipal government of the District of Columbia automatic increases in compensation by reason of length of service or promotion are suspended during the fiscal year ending June 30, 1933; but this section shall not be construed to deprive any person of any increment of compensation received through an automatic increase in compensation prior to July 1, 1932."

This provision was continued in the fiscal year 1934.

In your decision of May 24, 1934, you say:

"Under the provisions of section 24 of the act of March 28, 1934, Public, No. 141, removing during the fiscal year 1935 the suspension made by section 201 of the Economy Act of provisions of law authorizing automatic promotions, no service rendered during the fiscal years 1933 and 1934, when the statutes authorizing automatic promotions were inoperative by reason of section 201 of the Economy Act, may be included in computing longevity to determine either the amount or effective date of the automatic increase of compensation during the fiscal year 1935, but only the periods of service prior to July 1, 1932, and on and after July 1, 1934."

This decision had application to employees of the Postal Service. In a second decision, rendered by you under date of May 31, 1934, you held that the same general rule had application to employees of the Foreign Service. In other words, it is the understanding of the Commissioners according to these decisions that no service rendered during the fiscal years 1933 and 1934 may be used for the purpose of determining whether an employee is entitled to an automatic increase in compensation on July 1, 1934, and that the only service that may be used for such purpose is that rendered prior to July 1, 1932, and subsequent to July 1, 1934. It is also the opinion of the Commissioners that these decisions had application to the officers and teachers in the public schools and members of the police and fire departments.

Under the act of June 27, 1934, amending the Independent Offices Appropriation Act, fiscal year 1935 (H.R. 9867, 73d Congress, 2d session), it would appear to the Commissioners that the officers and teachers in the public schools and members of the police and fire departments of the District of Columbia are included within and entitled to the benefits of the provisions thereof. The question arises, however, as to whether or not this act of June 27, 1934, provides an appropriation for the payment of annual increases (automatic increases) to the several groups of employees named for the two fiscal years 1933 and 1934 who would be entitled to such increases by reason of service performed during those two fiscal years.

Subparagraph (e), section 21, title II, of the Independent Offices Appropriation Act, fiscal year 1935, provides

"There is hereby appropriated so much as may be necessary for the payment of sums due, and payable cut of the Treasury of the United States, by reason of the diminution under this title in the percentage of reduction of compensation, and other amendments to existing laws made hereby; and lim tations on amounts for personal services are hereby respectively increased in proportion to the increase in appropriations for personal services made in this subsection. In the case of officers and employees of the municipal government of the District of Columbia, such sums shall be paid out of the revenues of the District of Columbia and the Treasury of the United States in the manner prescribed by the District of Columbia Appropriation Acts for the respective fiscal years."

The Commissioners of the District of Columbia respectfully request your decision to the two following questions:

1. Whether the provisions of the act of June 27. 1934, amending the Independent Offices Appropriation Act, fiscal year 1935 (H.R. 9867, 73d Congress, 2d session), apply to and include officers and teachers in the public schools and privates of the Metropolitan Police Force and Fire Department of the District of Columbia.

2. Whether an appropriation is provided for the payment of annual increases (automatic increases) for the fiscal years 1933 and 1934 under the provisions of the act of June 27, 1934, supra, or that act and subparagraph (e), section 21. title II, of the Independent Offices Appropriation Act for 1935, considered jointly.

As first presented, the bill which became the act of June 27, 1934 (48) Stat. 1265), quoted in your letter, referred only to postal employees, but it was enlarged before enactment to include "other officers and employees", evidently intending to embrace all classes of officers and employees affected by section 201 of part II of the Legislative Appropriation Act for 1935 and the suspending provision of section 24 of the act of March 28, 1934. Accordingly, question 1 is answered in the affirmative. See decision of June 29, 1934 (A-55877, 13 Comp. Gen. 480), to the Secretary of the Treasury.

Referring to question 2, section 21 (e), title II, of the act of March 28, 1934, provides an appropriation in an amount necessary for the payment of all sums caused by reason of amendments to existing laws made by said act which would include the automatic increases in compensation provided for under subparagraph 1, section 24, of the same act (see the last paragraph of decision of May 31, 1934, to the Secretary of State, A-55654, 13 Comp. Gen. 401) and section 1 of the act of June 27, 1934, supra, is a legislative clarification of the terms of subparagraph (1) of section 24 of the said act of March 28, 1934. Hence said section 21 (e) does appropriate for the fiscal year 1935 so much as may be necessary to pay increases in compensation resulting from automatic promotions made effective on or after July

1, 1934, pursuant to the provisions of said section 24 as clarified by the said act of June 27, 1934. It is to be understood, of course, that payment of back compensation at the increased rate for the fiscal years 1933 and 1934 is not authorized. Your second question is answered accordingly.

(A-51555)

OFFICERS-ARMY AND NAVY-ASSIGNMENT AS COURIERS UNDER THE STATE DEPARTMENT-REIMBURSEMENT FOR SERVICES BETWEEN DEPARTMENTS

Sections 1223 and 1440, Revised Statutes, exclude Army and Navy officers from employment in the Foreign Service of the United States. Section 601 of the Economy Act, 47 Stat. 417, providing generally for agreements for the performance of purely personal services by the personnel of one department or office for the performance of the work of the other, does not repeal, by implication, the special provisions, applicable in a limited field, of sections 1222, 1223, 1229, and 1440 of the Revised Statutes. Comptroller General McCarl to the Secretary of State, July 9, 1934:

I have your letter of June 12, 1934, as follows:

Reference is made to your letter no. A-51555, dated October 26, 1933, concerning arrangements with the War and Navy Departments to have each of them assign an officer to perform certain duties and travel as couriers for the Department of State. You advised that in the absence of specific statutory authorization the State Department appropriation Contingent Expenses, Foreign Service" may not properly be charged with travel expenses of officers of the Regular Army and Regular Navy from their posts of duty to Paris and in returning to this country upon termination of their services as couriers. No reference was made in this communication to the provisions of title VI, entitled "Interdepartmental Work" of the Act of Congress approved June 30, 1932, 47 Stat. 417, section 601 of which provides for the amendment of section 7 of the Act approved May 21, 1920, to read as follows:

"SEC. 7. (a) Any executive department or independent establishment of the Government, or any bureau or office thereof, if funds are available therefor and if it is determined by the head of such executive department, establishment, bureau, or office to be in the interest of the Government so to do, may place orders with any other such department, establishment, bureau, or office for materials, supplies, equipment, work, or services, of any kind that such requisitioned Federal agency may be in a position to supply or equipped to render, and shall pay promptly by check to such Federal agency as may be requisitioned, upon its written request, either in advance or upon the furnishing or performance thereof, all or part of the estimated or actual cost thereof as determined by such department, establishment, bureau, or office as may be requisitioned, but proper adjustments on the basis of the actual cost of the materials, supplies, or equipment furnished, or work or services performed, paid for in advance, shall be made as may be agreed upon by the departments, establishments, bureaus, or offices concerned: Provided, however, That if such work or services can be as conveniently or more cheaply performed by private agencies, such work shall be let by competitive bids to such private agencies. Bills rendered, or requests for advance payments made, pursuant to any such order, shall not be subject to audit or certification in advance of payment.

"(b) Amounts paid as provided in subsection (a) shall be credited (1) in the case of advance payments to special working funds, or (2) in the case of payments other than advance payments, to the appropriations or funds against which charges have been made pursuant to any such order, except as hereinafter provided. The Secretary of the Treasury shall establish such special working funds as may be necessary to carry out the provisions of this subsection. Such amounts paid shall be available for expenditure in furnishing the materials, supplies, or equipment, or in performing the work or services, or for the objects specified in such appropriations or funds. Where materials,

supplies, or equipment are furnished from stocks on hand, the amounts received in payment therefor shall be credited to appropriations or funds as may be authorized by other law, or, if not so authorized, so as to be available to replace the materials, supplies, or equipment, except that where the head of any such department, establishment, bureau, or office determines that such replacement is not necessary, the amounts paid shall be covered into the Treasury as miscellaneous receipts.

"(c) Orders placed as provided in subsection (a) shall be considered as obligations upon appropriations in the same manner as orders or contracts placed with private contractors. Advance payments credited to a special working fund shall remain available until expended."

Decisions have been rendered by your office on November 11, 1932, 12 Comp. Gen. 442; on November 24, 1933, 13 Comp. Gen. 150; and on March 2, 1934 (A-53791), interpreting the provisions quoted above. Your decision of March 2, 1934, contained the following statement:

"It seems reasonably clear that the Congress intended by the enactment of section 601 of the Economy Act that two departments or offices of the Government operating under separate appropriations may enter into an agreement for the performance of purely personal services by the personnel of one department or office for the performance of the work of the other, for which reimbursement or transfer of appropriation may be made not to exceed the regular salaries and authorized expenses, if any, of the personnel loaned covering the period involved. But in such cases there should be a written order or agreement in advance, signed by the responsible administrative officer of each of the departments or offices concerned, and said agreement should be attached to the request for transfer of appropriations or voucher for reimbursement for filing in this Office."

I inclose a copy of an opinion of the Judge Advocate General of the Navy Department, dated April 30, 1934, in which he states his conclusions as follows:

"After a careful examination of the provisions of section 601, title VI, of the Economy Act, in the light of the decisions of the Comptroller General above cited, this Office is of the opinion that an agreement may be legally made and enforced between the Navy Department and another executive department wherein the Navy Department will be reimbursed by the department receiving the services for allowances and expenses of certain naval or marine officers or men who may be detailed to perform duty or render service under the direction or supervision of the other department and for the benefit of the other department. It is the further opinion of this Office, however, that in order to insure that the Navy Department will be reimbursed as agreed there should be a written order or agreement signed by a responsible administrative officer of the Navy Department and of the other executive department concerned, in advance of the rendering of such services, and that said agreement should be attacheď to the request for transfer of appropriations or voucher for reimbursement from the appropriation of the executive department for whom the services are rendered to the credit of the Navy Department."

As the provisions of the so-called Economy Act above quoted were enacted subsequent to sections 1222, 1223, 1224, and 1440 of the Revised Statutes, as amended, and as the phraseology used in the provisions above quoted are not restricted in their application, it is believed that the Congress may reasonably be considered to have intended that the restrictions contained in the abovementioned provisions of the Revised Statutes should not be invoked to prevent the making of contracts by the War Department or the Navy Department for the performance of work for this Department by personnel of the Army or the Navy. When the provisions of title VI of the Economy Act were under consideration in the House of Representatives the following statements were made: "Mr. FRENCH. It would permit one department that is doing a particular line of work, and is qualified to do that work, to do the work upon the request of another department and upon an agreement between the two departments to do that specific work.

"Mr. BRIGGS. * It seems to me, if this provision is capable of being utilized to promote savings and economies, it ought to be adopted; and such savings and economies ought to be encouraged as far as possible by action of the Appropriations Committee in denying any duplication of service."

"Mr. BRIGGS. This is an economy program; and when it comes down to fundamentals I think that everybody wants to have carried into effect throughout this Government the utmost economies of every kind which can be effected properly and still let the Government be carried on efficiently.

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