Accordingly, training duty performed by the member herein prior to August 10, 1956, the date the definition of active duty was changed to include training duty, may not be included in the computation of length of active service to increase retired pay. The voucher submitted is being retained here.

[B-140445]

Appropriations — Obligations - Unexpended Balances Availability v. Transfer to Treasury

A specific amount reappropriated in the Interior Department Appropriation Act, 1955, from prior unused fiscal year appropriations for administrative use, for preparation of plans and specifications for certain buildings, which has not been obligated or reduced by any disbursements as of June 30, 1958, must be regarded as an appropriation for a particular purpose for that fiscal year, rather than as a part of the multipurpose appropriation which may be used in the fiscal year 1959 to liquidate unpaid obligations, and pursuant to section 6 of the act of July 25, 1956, 31 U.S.C. 706, which requires the closing of inactive appropriations, the specific unobligated amount must be withdrawn from availability and deposited into the general fund of the Treasury.

To the Secretary of the Interior, September 29, 1959:

In a letter of August 7, 1959, the Administrative Assistant Secretary of the Interior requested our further consideration of the question whether there remains available for administrative use the amount of $75,000 established by the Interior Department Appropriation Act, 1955, approved July 1, 1954, 68 Stat. 361, 368, 43 U.S.C. 50, for the preparation of plans and specifications for a Geological Survey building in the metropolitan area of Washington, D.C.

The question involved originally arose in connection with our examination of the Department of the Interior reports, under section 1311 of the Supplemental Appropriation Act, 1955, 31 U.S.C. 200, with respect to the balances of appropriations and funds under the Department's control as of June 30, 1958. Our examination having disclosed that no part of the $75,000 appropriation had been obligated and no disbursement had been made therefrom as of June 30, 1958, we indicated in our report, a copy of which was forwarded to you on January 12, 1959, that although the appropriation as initially established was to continue available until expended, it nevertheless, in view of the provisions of section 6 of the act of July 25, 1956, 70 Stat. 649, 31 U.S.C. 706, was now for withdrawal and redeposit into the general fund of the Treasury.

Under the heading "Geological Survey-Surveys, Investigations, and Research" the Interior Department Appropriation Act, 1955, provided:

Not to exceed $75,000 of the unexpended balance of the funds appropriated under this heading in the Interior Department Appropriation Act, 1954, is hereby continued available until expended for preparation of plans and specifications for a building or buildings to meet the special needs of the Geological Survey in the metropolitan area of Washington, D.C.

Section 6 of the act of July 25, 1956, enacted two years after the appropriation act establishing the $75,000 appropriation, states in part:

The unobligated balances of appropriations which are not limited to a definite period of time shall be withdrawn *** whenever the head of the agency concerned shall determine that the purposes for which the appropriation was made has been fulfilled; or in any event, whenever disbursements have not been made against the appropriation for two full consecutive fiscal years: * * *. [Italics supplied.]

The letter of the Administrative Assistant Secretary advances the view that "the funds [the $75,000] are merely a part of the overall 1954 funds appropriated for the use of the Geological Survey," and should not be considered as "an item separate and apart from the basic appropriation from which it was derived." Upon the premise, and "since disbursements have continued to be made against the 1954 appropriation during the fiscal year 1959 in liquidating unpaid obligations charged to the 1954 appropriation for Surveys, Investigations and Research," it is believed "the special fund of $75,000 is still available and should not be returned to the General Fund of the Treasury." The Interior Department Appropriation Act, 1955, effective July 1, 1954, reappropriated for administrative use a part of the unexpended balance, not to exceed $75,000, of the prior fiscal year appropriation for the Geological Survey to be used for preparation of plans and specifications for certain buildings. As the $75,000 appropriation was established out of unobligated and unused moneys of the 1954 fiscal year appropriation and was designated by the Congress for a single purpose as opposed to the multipurpose appropriation of 1954, we see no justification, particularly with reference to the application of section 6 of the act of July 25, 1956, for viewing the $75,000 appropriation as having remained a part of the 1954 funds of the Geological Survey. Nor is such a view deemed to be in keeping with established fiscal practice or in consonance with legislative policy as reflected by 31 U.S.C. 717, which requires the reappropriation and diversion of the unexpended balance of any appropriation to a purpose other than that for which it was originally made to be "construed and accounted as a new appropriation."

The apparent purpose of section 6 of the act of July 25, 1956, is the closing of inactive appropriations not limited to a definite period of time. The appropriation here involved was established by the appropriation act for the fiscal year 1955. It came into being July 1, 1954, and no part of the appropriation has been obligated or disbursed.

The closing of such an inactive appropriation is clearly contemplated by section 6 of the act of July 25, 1956, and we see no basis for the avoidance of that effect.

You are advised we remain of the view that the appropriation under consideration is required by law to be withdrawn and redeposited into the general fund of the Treasury.

[B-140725]

Federal Agency Receiving Money Under Mistake of FactAltered Postal Money Orders

A Federal agency receiving additional money from the Post Office Department as the result of cashing several postal money orders for amounts which had been raised by the purchaser before transmittal to the Federal agency has received the money under a mistake of fact and, like a private individual receiving something for nothing, when restitution does not result in any loss to the recipient, the Federal agency is required to return the additional amount to the Post Office Department.

To the Commissioner, Public Housing Administration, September 29, 1959:

By letter of September 9, 1959, the Acting Postmaster General asked whether, under the circumstances described therein, the Federal Housing Administration should be required to pay over to the Post Office Department the sum of $49.

The circumstances giving rise to this question are stated in the letter as follows:

During 1956 Mrs. Owen (Thelma) Krueger of 10520 Racine Avenue, Chicago 43, Illinois, purchased five money orders which were made payable to the Federal Housing Administration at Chicago in repayment of a loan. These orders were purchased in small amounts and raised by Mrs. Krueger before she transmitted them to the Federal Housing Administration.

Upon discovery of the alterations the Post Office Department made demand upon the Federal Housing Administration for the $49 difference between the total issue amount of the orders and the raised amount.

It is clear from the foregoing that the additional money was paid to your Administration under a mistake of fact. In commenting on the right of the Post Office to recover money paid on stolen money order blanks the court in the case of United States v. Northwestern National Bank & Trust Co., 35 F. Supp. 484, stated that equity recognizes the right to recover money paid through mistake so that a recipient of a benefit so bestowed must make restoration, the theory being that the recipient has merely received something for nothing and that restitution results in no loss to him.

In view of the holding in that case that the United States was entitled to recover the amount so paid, there can be no question that if the recipient of the additional money here involved had been a private

individual the Post Office Department legally would be entitled to recover. See also Bolognesi v. United States, 189 Fed. 335, and Ted Lewin v. United States, 170 F. Supp. 646. We see no valid reason why the fact that the present case involves two Federal agencies should have any effect on the right of the Post Office Department to have the money returned to it nor are we aware of any reason why your Administration may not legally make such refund. In this connection attention is invited to A-93753, June 24, 1938, copy enclosed, wherein there was authorized an adjustment in the revenue accounts of an Internal Revenue Collector and the Money Order account of the Postmaster General.

Accordingly, it is our view that your Administration properly should comply with the demand of the Post Office Department. The Postmaster General is being furnished a copy of this letter.

[B-139923]

Contracts-Failure to Furnish Something Required—Subcontractors' Names-Bid Evaluation v. Bidder's Responsibility Factor

To construe a requirement in an invitation that bidders furnish as a part of the bid form a list of subcontractors as being material to the bid, so that failure to comply with the requirement before bid opening would result in rejection, would render meaningless another provision which requires the contractor, at the request of the contracting officer, to furnish the names of all subcontractors and the extent of the work to be done by each, and would be inconsistent with section 1-307 (iii) of the Armed Services Procurement Regulation which requires that consideration be given to the adequacy of subcontracting arrangements in determination of bidder responsibility; therefore, the subcontracting requirement must be construed as incident to a determination of the contractor's ability to perform which information is not an essential part of the bid and may be supplied after bid opening.

To Fell & Hartman, September 30, 1959:

Further reference is made to your letter dated June 16, 1959, written on behalf of your client, Redding and Company, Inc., Baltimore, Maryland, protesting the award of a construction contract at Fort George G. Meade, to Carl Gonnsen and Son, under Invitation for Bids No. 18-102-59-52.

Attached to the Invitation was a sheet entitled "SUB-CONTRACTING" which reads as follows:

Bidders are required to furnish in the space provided below, the name, business address of each sub-contractor proposed to be used in the execution of the work, together with the type and extent of the work to be so sub-contracted. NAME OF SUB-CONTRACTOR (S) TYPE OF WORK

ADDRESS

Bidders are further advised that where they are proposing to use the facilities of an affiliate or of a concern other than the bidder, all existing business arrangements, sub-contract agreements, etc., whether firm or contingent, for the use of such facilities, must be submitted to the Contracting Officer for review and approval, prior to the award of any contract as a result of this bid.

Redding and Company, Inc., the second low bidder, as a part of its bid and pursuant to the requirement, listed the subcontractors which it proposed to use.

Your protest is on the basis that the low bidder, Carl Gonnsen and Son, failed to submit a list of proposed subcontractors until after the bid opening.

Your letter states in part as follows:

1. It is a well-known practice in the construction industry in the Baltimore area that sub-contractors, when requested by general contractors to submit prices, delay the submission of such prices until an hour or two prior to bid opening time, and then the prices are usually submitted by telephone. Then, when the bids are opened and the low bidder announced, a number of the subcontractors will contact the low bidder and begin negotiations for the subcontracts. Therefore, the first price which is submitted by the sub-contractors is not the "competitive price", but is rather the "going in price." The competition among the sub-contractors thus begins when the low bidder is announced and the negotiated price which is then reached between the general contractor and the sub-contractor is the "competitive price" of the sub-contract. It goes without saying, therefore, that the "competitive price" is lower than the "going in price."

2. Let us now consider the general contractor at this particular time, i.e., when he is compiling his bia just prior to bid opening time. He knows that the prices he has received from the sub-contractors as of this particular time are not the sub-contractors' "competitive prices", and that, if he, the general contractor, be the low bidder, he can then secure "competitive prices" from the sub-contractors. The general contractor at this particular time, however, is in competition with the other general contractors who are bidding on the project. He knows that the same process of negotiation to secure competitive subcontract prices is open to the other bidders. What, then, does the general contractor do? It is obvious that since he is in competition with the other general contractors, he deducts from the "going in" sub-contract prices that amount which he, from long experience, knows he will save as a result of the competitive negotiation procedure which will thereafter be followed by the sub-contractors and the general contractor will, therefore, compile his bid accordingly.

In our case, Redding and Company, Inc., interpreted the requirements to be mandatory upon it to list the sub-contractors which it would use, and in compiling its bid, it was forced to use the "going in" sub-contract prices. On the other hand, Carl Gonnsen and Son was, by the action of the Contracting Officer, left free to follow the old and normal bid procedure and to use the competitive sub-contract prices. It necessarily follows, that the Government has not received the benefit of "competitive prices" in the Redding and Company bid and from those other bidders who responded to the requirement; it cannot, therefore, be said that the Government has received the lowest price obtainable.

We think that the quoted provision of the invitation requiring the furnishing on a part of the bid form (and apparently, therefore, to be furnished with the bid) of a list of the subcontractors proposed to be used could reasonably be interpreted as a material part of the bid, failure to comply with which would result in the rejection of the bid. If this view were adopted, it would follow as a necessary corollary that the subcontractors listed are those which must be used, since, if the bidder could nevertheless amend the list after bid opening, the requirement could serve no useful purpose and would establish an anomaly whereby a bid could be rejected for failure to furnish information which the bidder could change after opening.