CONTRACTS-Continued
Specifications-Continued

Misinterpretation-acceptance effect-bid-
der who, in response to 2 invitations
which permitted bidders to offer reduc-
tion in case of award of both projects,
submits low bids with different, dispro-
portionately large deductions on basis
of erroneous interpretation that only 1
deduction would be taken on award of
second contract may not have his bids
accepted on basis of interpretation which
is contrary to intent of procuring agency
and as understood by other bidders; and
acceptance of bids on basis of contrac
tor's subsequent offer to perform at
either single or double deduction, or in
alternative, to perform 1 of projects at
bid price would open way for unscrupu-
lous bidders to leave themselves option
to decide, after opening, amount of their
bids.....
Restrictive:

Equipment modification for broader
competition-procurement specifica-

375

315

tion for cotton twine for mail tying
machines which cannot be efficiently
used with jute twine without modifl-
cation is not restrictive of competition. 323
Particular make-action of prime cost-
plus-a-fixed-fee contractor who, with
approval of contracting officer, and
after issuance of purchase order for
article of its own manufacture on basis
of lowest quotation, issued second
purchase request containing specifica-
tions written around its own article so
that second order could be matched
with first and eliminate repair prob-
lems, does not render subcontracts
illegal as in contravention of statutory
procurement requirements which are
not applicable to such subcontracts...
Status-supplies and services v. construc-
tion-in view of fact that sec. 214 of Small
Business Act of 1953, 15 U. S. C. 643, which
relates primarily to utilization of potential
productive capacity of plants operated by
small business concerns, refers specifically
to "contracts for supplies and services,"
"contracts for research and development,"
and to furnishing of "materials," "sup-
plies" and "equipment" there is doubt
as to its application to construction con-
tracts authorized pursuant to Housing
Amendments (Act) of 1955.....
Stenographic reporting-bid evaluation fac-
tors-prices to public-rejection of all bids
for stenographic reporting services by
regulatory agency on basis that increased
bonus offered to Govt. was incompatible
with public interest and that maximum
prices for sale of copies to public were
excessive-factors which could have been
determined from past experience prior to
Issuance of invitation-would not be bona

271

fide determination that public interest
would be served by rejection of bids;
however, further evidence of express
determination that high cost to public for
copies would not serve purpose of statute
under which agency operated, that
elimination of bonus would result in
lower prices, and that reasonableness of
prices could not be determined in advance
precludes objection to readvertisement on
new basis.....
Subcontracts:

Cost-plus. (See Contracts, cost-plus, sub-
contracts)

Qualifications subject to administrative
approval. (See Bidders, qualifications,
subcontractors, administrative approv-

al)

Small business limitation. (See Contracts,
awards, small business concerns, sub-
contracting limitation)

Tax matters-set-off after assignment. (See
Set-Off, contract payments, assignments,
tax debt)
Termination:
Propriety:

Contractor who, after failing to furnish
supplies meeting specifications on de-
livery date and after failing to agree
to revised delivery schedules for re-
placements, was advised that contract
termination provisions would be in-
voked may not have sustained the
allegation that cancellation was un-
justified or arbitrary, and, inasmuch
as repurchase was made 16 days after
date of termination from second lowest
bidder on original invitation to bid
and at same price offered originally by
that bidder, Govt. may be considered
to have acted properly, and excess
costs are chargeable to defaulting con-
tractor.....

Contractor who, after award of contract
to supply coal to Korea, fails to furnish
names of American flag vessels on
which coal was to be shipped, as re-
quired by invitation and contract, has
materially breached contract so as to
justify termination by Govt.---------
Warranties:

Notice of breach-contractor who, 9
months after delivery, reinspection and
payment in full, is notified that supplies
did not conform to warranties in pur-
chase order may not be regarded as
having received notice of breach of
warranty by reason of his presence at
time of reinspection and 9 months' delay
in giving actual notice is so clearly un-
reasonable under Uniform Sales Act
which is in effect in state where contract
was executed and performed as to pre-
clude Govt. from asserting claim for
damages for breach of warranty......... 419

(See Appropriations, obligation, Section
1311, Supplemental Appropriation Act,
1955, reporting requirements, contingent
liabilities)

Decision effect-although decision that
allowance of interest on capital advanced
for urban redevelopment by local public
agencies as item in gross project cost is
not authorized either specifically or by
necessary implication under Title I of
Housing Act of 1949, 42 U. S. C. 1450,
such decision is not binding on Admin-
istrator of Housing and Home Finance
Agency because his determinations are,
by law, final and conclusive; however,
if he determines that inclusion of interest
as project cost is necessary, without ob-
taining legislative authority, GAO under
reporting responsibility provided by
Govt. Corporation Control Act, 31
U. S. C. 846, 851, would be required to
bring matter to attention of Congress...
Federal law applicability:

Competitive procurement-inasmuch as
rent for regional office space leased by
Govt. corporation-wholly owned or
mixed-ownership-is an administra-
tive expense, the solicitation for lease
of space must be advertised in accord-
ance with requirements of sec. 3709,
R. S., 41 U. 8. C. 5..
General Services Administration build-
ing functions-although Federal Na-
tional Mortgage Association Charter
Act, by which corporation status was
changed from wholly owned to mixed-
ownership corporation, provides broad
contract authority, it specifically limits
corporation's powers by application of
Govt. Corporation Control Act and
Govt. corporation laws generally so
that laws and regulations relating to
building functions performed by

Page CORPORATIONS—Continued
Government-Continued

700

666

Federal law applicability-Continued
General Services Adm. for Govt.
agencies, including corporations, may
be regarded as having been incor-
porated by reference in Charter Act
and made applicable to Federal Na-
tional Mortgage Association.......

COURTS:
Decisions:

Acceptance as precedent by General Ac-
counting Office:

Navy captain who was transferred to
retired list and advanced to rank of
rear admiral but who continued on
active duty may have advancement
on retired list regarded as conferring on
him permanent grade of rear admiral,
in consonance with decision in McColl
v. U. S., decided Jan. 16, 1957, Ct. Cls.
No. 137-56, and, therefore, officer who
served satisfactorily on active duty
for 2 years as rear admiral is entitled
to active duty pay and allowances of
rear admiral (upper half) under 10
U. S. C. 5507 (e). B-68965, July 19,
1955, modified.......
Conclusion in Grissing case, William

Sebastian Ebinger et al. v. U. S., Ct. Cls.
No. 49615, decided Oct. 9, 1957, that
all active duty performed subsequent
to transfer to Fleet Reserve and sub-
sequent to July 1, 1925-except peace-
time active duty of not more than 2
months in each 4-year period-is
creditable for increased retainer and
retired pay under sec. 208 of Naval
Reserve Act of 1938, 34 U. S. C. 854g,
is tenable one and will be followed as
precedent in settlement of similar
claims instead of holding that only
active duty performed during period
of national emergency declared by
President was creditable under sec.
208. 26 Comp. Gen. 804, 32 id. 159,
modified; 35 Comp. Gen. 339, over-
ruled.

In computation of retired pay of mem-
bers of uniformed services retired for
physical disability who hold perms-
nent Reserve grades which are higher
than temporary grades in which they
are serving on active duty at time of
retirement, rule established in case of
Tracy v. U. S., 136 Ct. Cls. 211, and
related cases, which authorized com-
putation of retired pay on basis of
higher Reserve grade, will be followed
by GAO not only with respect to
applicability of 4th par of sec. 15, Pay
Readjustment Act of 1942, to Reserve
officers retired for disability but also
with respect to disability retirement
pay under sec. 402(d), Career Com-

COURTS-Continued

Decisions-Continued

Acceptance as precedent by General Ac-
counting Office-Continued

pensation Act of 1949 or under 10
U. S. C. 1372. 36 Comp. Gen. 628,
modified.

In view of holding in Tato v. U. S., 136
Ct. Cls. 651, and Atkins, et al. v. U. S.,
Ct. Cls. No. 473-56, decided Jan. 15,
1958, that commissioned warrant offi-
cer is not "commissioned officer"
within meaning of that term as used
in dual compensation limitation in sec.
212 of Economy Act of 1932, 5 U. S. C.
598, proper payments of retired pay
which may be made administratively
on basis of Tato and Atkins decisions
to retired commissioned warrant offi-
eers holding civilian positions will not
be questioned by accounting officers
and claims submitted to GAO will be
settled on same basis....
Holding in Seagrave v. U. S., 131 Ct. Cls.
790, that retired pay under Title III
of Army and Air Force Vitalization
and Retirement Equalization Act of
1948, 10 U. S. C. 1036, is payable from
date member met age and service re-
quirements for such pay even though
application for retired pay is not made
until some time subsequent to such
date, will be followed in settlement of
similar claims. 35 Comp. Gen. 563,
30 id. 287, 28 id. 321, modified..
Atkins, et al. v. United States. (See Com-
pensation, double, concurrent military
retired and civilian service pay, warrant
officer status)

Budd v. United States. (See Pay, retired,
disability, members who served in
higher rank than at time of retirement,
payment basis)

Danielson v. United States. (See Pay,
service credits, inactive time, on retired
Hist)

Ebinger et al. v. United States. (See Pay,
retired, fleet reservists, active duty after
retirement, service credits)
Grayson v. United States. (See Pay, re-
tired, advancement on retired list,
highest temporary grade determinations)
Grissing case. (See Pay, retired, fleet re-
servists, active duty after retirement,
service credits)

Hedden v. United States. (See Pay, serv
ice credits, National Guard, State Na
tional Guard between 1903-1916)
McColl v, United States. (See Pay, re-

tired, combat citations, rear admirals,
McColl case application)

Seagrave United States. (See Pay, re-
tired, effective date, subsequent applica
tion effect)

Talo v. United States. (See Compensa
tion, double, concurrent military retired

Decisions-Continued

and civilian service pay, warrant officer
status)

Travis v. United States. (See Pay, service
credits, inactive time, on retired list,
retired pay increase purposes)

United States v. Plesha, et al. (See Vet-
erans, insurance, lapsed commercial
policies)

Whitaker v. United States. (See Pay,
service credits, double time for foreign
duty)
Employees-foreign pension acceptance.
(See Officers and Employees, acceptance
of foreign presents, emoluments, etc.,
court employees)

Judgments, decrees, etc.-appropriation ob-
ligation-liability of St. Lawrence Seaway
Development Corp. for claims which
might be submitted to Ct. Cls. is too
hypothetical in nature to be determined;
however, it is believed that judgments
should be recorded as a cost in Corp.'s
accounts and disclosed in its financial
statements regardless of whether judgment
is paid from corporate or noncorporate
funds so that there is full disclosure of
cost of construction of seaway-------------
Jurors-fees-Government employees-non-
workdays-full-time as well as part-time
employees who are compensated under
Federal Employees Pay Act of 1945, 5
U. S. C. 901, and who perform jury service
on nonworkdays are entitled to retain fees
received for such service. Decisions indi-
cating contrary conclusion are modified...
CRIMINAL LAW VIOLATIONS:
Jurisdiction:

General Accounting Office v. Attorney
General:

Although determination by Chairman
of Civil Aeronautics Board as to con-
tinuing official nature of ceremonial
flights, in which officers and em-
ployees and their wives participate as
guests and at expense of private air
carriers, will not be questioned in
exercise of GAO audit, it does not
appear that such participation is in
violation of 18 U. 8. C. 1914 which
probibits Govt. officers and employees
from receiving any salary from sources
other than U. 8.; however, final deter-
mination concerning interpretation of
such criminal provision is for Atty.
Gen. and courts...

Page

691

695

776

In view of fact that 18 U. 8. C. 1914,
which prohibits Govt. officers and em-
ployees from receiving any salary in
connection with their service from
sources other than U. S., is criminal
provision and enforceable by Atty.
Gen. and courts, Comptroller General
does not have authority to make
binding determination concerning
proper interpretation of provision..... 778

CUSTOM AND USAGE:

Effect-long established rule that interest
does not accrue on savings deposits of
enlisted member of uniformed services after
date of discharge is for application under
10 U. S. C. 1035(c), even though member
reenlists immediately; accordingly, if mem-
ber wishes to have deposit continue to
draw interest after discharge and imme-
diate reenlistment or after retirement and
immediate recall to active duty, principal
and interest must be redeposited in which
event both principal and accrued interest
will draw interest.....

DECEDENTS' ESTATES:
Pay, etc., due military personnel:

Overpayment liability-travel time pay-
although under Career Comp. Act of
1949, as amended by act of July 12, 1955,
Reserve member of armed services may
be paid pay and allowances for travel
time incident to release from active duty
prior to departure home from last duty
station, if member dies prior to expira-
tion of travel time, member's right to
pay and allowances ceases on day of
death and any overpayment should be
collected from member's estate.
Will-beneficiary v. others-savings de-
posits with interest thereon due deceased
member of uniformed services are con-
sidered as part of "the amount found
due" in settlement of deceased member's
account within meaning of act of July 12,
1955, 37 U. 8. C. 361, and therefore pay-
ment to member's designated beneficiary
as provided in act is proper, notwith-
standing that member had executed will
bequeathing deposits to relative-not
not designated beneficiary-in trust for
his minor daughter...
DELEGATION OF AUTHORITY:
Between agencies oaths employees who
are designated to administer oaths pursuant
to 5 U. 8. C. 16a may administer oaths
required by 5 U. S. C. 16 to individuals
in Federal agencies other than their own..
DEPARTMENTS AND ESTABLISH-
MENTS:

Free or reduced rate service acceptance-
acceptance by Govt. agency as shipper of
services of foreign freight forwarders free
of charge or at reduced rates on basis that
reimbursement for such services would be
included in ocean freight brokerage fee
paid by water carrier to forwarder for
securing cargo for ship constitutes a dis-
criminatory act under sec. 16 of Shipping
Act, 1916, 46 U. 8. C. 815, which makes it
unlawful for forwarders to obtain by any
unfair device or means transportation by
water at less than rates or charges other-
wise applicable; therefore, if agency deter-
mines that foreign freight services are
needed, they must be paid for from agency
funds....

Page | DEPARTMENTS AND ESTABLISH-

681

103

832

649

601

MENTS-Continued

Services between:

Commercial v. Government sources-au-
thority in 31 U. S. C. 686 for procure-
ment of services and supplies from other
Govt. agencies rather than from com-
mercial sources on basis of lower cost is
permissive rather than mandatory; and,
although practice of military department
of soliciting bids for laundry services
from commercial sources and awarding
contract to another Govt. agency on
basis of lower prices than those received
in response to advertisement is within
administrative discretion of procure-
ment officers, department has, on basis
of negligible savings and in line with
directive requiring use of commercial
facilities where commercial prices are
reasonable, discontinued procurement
of laundry services from other than
commercial sources...

Performance by other than designated
agency-use of Dept. of Interior appro-
priations for promotion of mineral re-
sources in U. S., its territories and posses-
sions to pay expenses incident to assign-
ment of solid fuels technologist to Ameri-
can Embassy in Europe would not only
be improper in view of specific area
limitation in appropriation but, even
more significant, would be contrary to
intent of Congress and President as ex-
pressed in Reorganization Plan No. II
of 1939, and Foreign Service Act of 1946,
which centralized in Dept. of State re-
sponsibility for foreign fact-finding and
reporting of type here involved for all
agencies of Govt.....
Reimbursement:

Federal Reserve banks. (See Federal
Reserve, services by banks to depart-
ments and establishments)

Motor vehicle pool damage. (See Ve
hicles, Government, damage, motor
pool vehicles, requisitioning agency
liability)

DISBURSING OFFICERS:

Agents, deputies, etc. embezzlement, etc.,
debt liquidation-military. (See Pay,
withholding, debt liquidation)

Relief:

Appropriation adjustment-losses which
are incurred by overseas disbursing
officers performing disbursing functions
for other agencies pursuant to authority
delegated from Dept. of Treasury under
sec. 4 of E. O. No. 6166, but which cannot
be related to function of any particular 1
or more of agencies for which disburse-
ments are made, are required to be ad-
justed from current appropriation of
Dept. of State available for disbursing
function at time adjustment is made,
in absence of more specific appropriation

DISBURSING OFFICERS-Con.
Relief-Continued

for such adjustments; however, in future
disbursing losses may be considered as
part of cost of disbursing function and
considered in determination of reim-
bursement charges assessed agencies
using disbursing service....

Death gratuity payments to survivors of
military personnel. (See Gratuities, six
months' death, erroneous payment lia-
bility)

DISTRICT OF COLUMBIA:
Firemen and policemen-retirement—addi-
tional benefits-applicability—in view of
definition of members in sec. 12 (k) (1) of
Policemen and Firemen's Retirement and
Disability Act Amendments of 1957 as
embracing only employees who are or
were employed on or after effective date of
the act-Oct. 1, 1957-increased survivor
annuities as provided in 1957 act are appli-
cable only where both retirement of mem-
ber and his death occur on or after Oct. 1,
1957--------

License, permit, etc., fees-Federal agency
liability-by enactment of sec. 1 (c) of
District of Columbia Alley Dwelling Act,
which directed erection of low-rent public
housing in accordance with laws and regu-
lations of Dist. of Col., Congress waived
Federal Govt.'s immunity with respect to
compliance with municipal building and
zoning laws and regulations, and, therefore,
If it is administratively determined by
National Capital Housing Authority to be
in interest of U. 8. to pay permit fees pre-
scribed by Dist. of Col. for development and
construction of housing, there is no legal
objection to payment.
ENLISTMENTS:
Fraudulent-falsification of age-National
Guard enlisted member who falsely states
his age on application for enlistment has in
effect fraudulent enlistment so that he
may be paid $25 gratuity authorized in par.
8, Army Regs. 35-1530, provided that
member's unit commander determines
that he would otherwise be without funds
to meet his immediate needs and that pay
order contains notation to that effect.....
Minority-pay, etc., rights-although en-
listed member of National Guard who was
released from duty when it was deter-
mined that he was under 17-years of age
did not have status during his military
service entitling him to accrue pay and
allowances, he may retain pay and allow-
ances received....

FAMILY ALLOWANCES:

Overpayments-wife's liability-debt satis-
faction from current allotments depend-
ency allotments which, through adminis-
trative error, were received by enlisted
member's wife after he had directed stop-
page of "dependency allotment and an-

Page FAMILY ALLOWANCES-Con.

thorized class Q allotment for support of
his children and wife from whom he was
separated represent debt of wife, and
administrative adjustment by withholding
reasonable amount from current allotment
payments is authorized.....
224 FEDERAL CIVIL DEFENSE AD-
MINISTRATION:

366

587

406

406

Contracts-stockpiling-eligibility for loan
guaranty-in absence of any evidence of
Congressional intent to exclude civil de-
fense activities from definition of national
defense in sec. 702 (d) of Defense Produc-
tion Act Amendments of 1953, 50 U. S. O.
App. 2152, contracts for purchase of equip-
ment for stockpiling for civil defense may
be regarded as contracts for national de-
fense and eligible for guaranty loans under
50 U. S. C. App. 2153....
FEDERAL NATIONAL MORTGAGE

ASSOCIATION:

Authority-although Federal National Mort-
gage Association Charter Act, by which
corporation status was changed from
wholly owned to mixed-ownership corpora-
tion, provides broad contract authority, it
specifically limits corporation's powers by
application of Govt. Corporation Control
Act and Govt. corporation laws generally
so that laws and regulations relating to
building functions performed by General
Services Adm. for Govt. agencies, includ-
ing corporations, may be regarded as
having been incorporated by reference in
Charter Act and made applicable to
Federal National Mortgage Association...
FEDERAL RESERVE:

Services by banks to departments and estab-
lishments:

Reimbursement:

Right of Federal Reserve banks to re-
imbursement for services performed
for U. S. as fiscal agents is evident
from annual appropriations to Dept.
of Treasury for such reimbursement
and by Treasury's administrative ex-
penses act of June 1, 1955, 5 U. S. C.
2588....

Services rendered by Federal Reserve
banks in processing postal remittances
received directly from postmasters are
primarily performed for P. O. Dept.
rather than for Dept. of Treasury and
act of June 1, 1955, 5 U. S. C. 258a,
which authorizes Treasury Dept. to
reimburse Federal Reserve banks for
services, is limited to payment for
services performed for that Dept., and,
therefore, it is responsibility of P. O.
Dept. to reimburse Federal Reserve
banks for services rendered to it......

FEES:
Brokerage freight forwarders. (See Trans-
portation, freight forwarders)