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required bidders to submit with their bids all information relevant to evaluation of their current financial ability to perform in accordance with their bids. Additionally, Paragraph 18 cautioned bidders to have any data pertinent to financial ability to perform, which was not already on file at MATS Headquarters, available at the time the bidder's facility was visited by a capability survey team. The same paragraph gave notice that "the adequacy of bidder's arrangements to assure that it will be able to perform any resulting contract will be considered by the contracting officer in determining the responsibility of the bidder for purposes of award."

It is our opinion that these provisions of the invitation provided adequate notice to all bidders that the burden of providing adequate financing to assure successful completion of the contract was placed upon the bidder, and that bid prices would be evaluated in conjunction with information on available finances for the purpose of determining that a bidder's financial position would provide reasonable assurance that the bidder could complete the contract upon payment of the amount bid. Both the initial evaluation by the Air Force prior to the submission by California-Hawaiian of evidence of a $300,000 credit and the reevaluation subsequent to such submission appear to have been directed to such determination.

Decisions with respect to the financial capacity of a bidder to perform a contract in procurements of this nature are primarily within the province of the contracting agency and the Small Business Administration. However, from our review of the record in this case we see no valid reason for disagreeing with the conclusions of the Air Force on the financial capability of California-Hawaiian to perform the contract. Since the validity of such conclusions would appear to be further substantiated by the denial of a Certificate of Competency by the Small Business Administration, that portion of your protest which questions the propriety of the evaluation procedures followed by the Air Force must be denied.

Concerning your contention that it is incumbent upon the Air Force to advise California-Hawaiian of the additional amount of working capital which would be necessary to support a determination of financial capability to perform the contract, the invitation imposed upon all bidders the responsibility for proving adequate finances at the time of initial survey. While we are in agreement with the propriety in this case of the additional consideration given by the Small Business Administration to the after-acquired credit of $300,000, and to the additional consideration given by the Air Force following denial of a Certificate of Competency by the Small Business Admin

istration, whether any further opportunity should be afforded the low bidder at this time to correct financial deficiencies must, in the absence of clear and convincing evidence of error, be left to the sound discretion of the contracting agency. Under the circumstances in this case we are unable to say that the failure or refusal by the Air Force to advise the company of the extent to which its finances are deficient or to permit the company additional time and opportunity to correct such deficiency would constitute an abuse of discretion. In the absence of such abuse, there would appear to be no sound basis upon which this Office could justify the imposition of further requirements in this area on the Air Force.

Accordingly, your protest is denied.


July 1, 1959-June 30, 1960


(See Leaves of Absence)


(See, also, Certifying Officers and Disbursing

Debt liquidation. (See Set-off, compensation,
etc., due civilian employees, accountable
officers, etc., debts)

Accounting form prescription-General
Accounting Office authority-since au-
thority vested in Comptroller General to
prescribe forms, systems and procedures
under sec. 309, Budget and Accounting
Act, 1921, 31 U.S.C. 49, is specifically
made applicable to municipal government
of Dist. of Col., 31 U.S.C. 2, and that
authority is required to be exercised con-
sistent with provisions of sec. 112 of the
Accounting and Auditing Act of 1950, the
omission of Dist, of Col. from specific terms
of the 1950 act is immaterial insofar as
application of principles, standards, and
related accounting and auditing require-
ments are concerned; therefore, establish-
ment of accounting system for Dist. of Col.
is required to conform to standards pre-
scribed by Comptroller General and to be
submitted for approval pursuant to sec.
112(b) of the 1950 act, 31 U.S.C. 66(b).........---

Bidder's qualifications—although more
detailed descriptive data might be re-
quired from bidders who have not had
prior production experience than from
established manufacturers, nature and
extent of proof of bidder's ability to per-
form pursuant to contract requirements
are matters primarily for determination
of contracting agency and, when in-
terests of Govt. are adequately pro-
tected, determination of contracting
agency will not be questioned...--------
Contract disputes-fact
disputes-fact questions-al-
though, under Capehart housing con-
struction contract which requires Fed-
eral Housing Commissioner to determine
amount for price adjustment purposes
based on difference between replacement
cost computed according to bidder's
wage schedule and wage schedule actu-





ally used, the computation of such
amount by Commissioner would be
binding on parties except for bad faith
or gross mistake, the concurrence of
Commissioner in amount negotiated
between builder and Corps of Engineers,
notwithstanding it did not conform to
computations made in accordance with
prescribed formula is without legal
effect and, even though time for price
revision has expired, the proper amount
is that determined pursuant to terms
of contract...
Military matters

A certificate by commanding officer of
nonavailability of quarters which
accompanied a claim for quarters
allowance for officer, who prior to
vacating bachelor quarters and mov-
ing off base was advised of determina-
tion that adequate quarters were avail-
able in new officer quarters, is not
conclusive upon accounting officers
under quarters allowance provisions
in sec. 302, Career Compensation Act
of 1949, in view of facts which clearly
establish availability and adequacy of
Govt. quarters, so that the mainte-
nance of quarters off base must be
regarded as for officer's convenience
and precludes payment of quarters

Quarters allowance claims under sec.
302(b), Career Compensation Act of
1949, 37 U.S.C. 252(b), which precludes
payment of quarters allowance to
members of uniformed services as-
signed to Govt. quarters or housing
appropriate to grade or rank and ade-
quate for themselves and dependents,
are for determination on basis of facts
in each case rather than on basis of
specific administrative authorization
or certification that is contrary to
actual facts, and although contempo-
raneous authorization or certification
by proper authority of quarters avail-
ability or adequacy usually is con-
sidered to be the best evidence of
facts, it is not conclusive where facts
are otherwise established...-----





Limitations. (See Appropriations, limita-
tions, administrative expenses)

Necessity or nonnecessity

Amended contracts-to amend existing
military family housing contracts, under
which construction is virtually com-
pleted, to include construction of health
center or other community facilities,
which additional facilities may not be
regarded as an inseparable part of
original contract work and would en-
large scope of contract, would be con-
trary to advertising requirement in
sec. 403, Housing Amendments Act of
1955, 42 U.S.C. 1594 (a), notwithstanding
such amendment would not increase
cost limitation for housing units...

Common carrier services-contracts for
transportation of mail by motor car-
riers (star route contracts), which have
long been subject of special legislation,
which required such contracts to be
awarded after advertising may not
now be corsidered contracts for trans-
portation services under sec. 321(a),
Transportation Act of 1940, 49 U.S.O.
65(a), which permits the award of con-
tracts for transportation of household
effects and Govt. property and sup-
plies without advertising, and coverage
of mail transportation contracts under
general advertising statutes in 41
U.S.C. 5 and the liberalization of
advertising procedures, particularly
with respect to 60-day advertising re-
quirement by act of May 1, 1958, may
not be construed to permit negotiation
of mail transportation contracts with.
out advertising..
Railway mail service

A change in transportation of mail
under metropolitan area plan, which
would involve discontinuance of star
route contract and include new
extended service outside present rail
operations of railroads through oper-
ation of motor vehicle freight service
over highways, may not be regarded
as substitution by railroads of bus
transportation service for abandoned
or curtailed train service so that such
new service may be contracted for
by negotiation under authority in
39 U.S.C. 5418-------

In connection with establishment of
metropolitan plan for transportation
and distribution of mail within a
particular geographical area, the
discontinuance of transportation of
mail by rail carriers between certain
points and substitution of motor
vehicle freight service to meet new
delivery schedules may not be

Page ADVERTISING-Continued.
Necessity or nonnecessity-Continued.




Railway mail service-Continued.

regarded as changeover from train
to highway bus service due to dis-
continued or curtailed train service
to come within negotiation authority
granted to Postmaster General under
39 U.S.O. 541a.....
Appropriations. (See Appropriations, Agri-
culture Department)

Foreign trade and assistance programs
Interest-in computing interest on agri-
cultural commodities sold to friendly
nations under sec. 403, Agricultural
Trade Development and Assistance
Act of 1954, which provides for payment
over periods not to exceed 20 years from
date of last delivery in each calendar
year and interest from date of such last
delivery, where more than one delivery
is made during a calendar year, no
interest would accrue until date of last
delivery in each year.....

Payment basis-to construe sec. 403, Agri-
cultural Trade Development and As-
sistance Act of 1954, 7 U.S.O. 1731, which
provides with respect to sales of surplus
agricultural commodities to friendly
nations "that payments may be made
in approximately equal annual amounts
over periods not to exceed 20 years," as
authorizing payments on a bi-annual or
deferred 10- or 20-year payment basis
would be to construe the word "may" in
its permissive sense without considera-
tion for entire context of sentence and
without regard to qualifying words "in
approximately equal annual amounts";
therefore, while the section does permit
slight flexibility or variation in annual
amounts, it may not be construed as
authorizing payment in other than equal
annual amounts or in approximately
equal annual amounts..

Carriers liability for overtime payments for
inspection services-establishment of uni-
form flat rate for inspection of private
aircraft by Bur. of Customs during over-
time periods and on Sundays or holidays at
ports of entry from Canada, Mexico, Cuba,
and other nearby countries in lieu of
present system of charging actual com-
pensation earned by employees rendering
service, which is administratively burden-
some, would substitute system of charges
that would require overpayments from
some operators to offset underpayments
by others, is not permissible under 19
U.S.C. 267 and 1451 which require that
each person requesting inspectional serv-
ices be charged amount sufficient to reim-
burse Govt. for cost of overtime or extra






compensation and expenses incurred for


Commissary purchases-transportation
costs-the purpose of commissary stores
provision in sec. 613, Dept. of Defense
Appropriation Act, 1960, being to require
the fixing of commissary prices to cover
substantial part of costs of operation of
commissary store system, the statute
should be regarded as remedial in nature
and liberally construed, and exception as to
transportation should be strictly con-
strued, so that, in absence of any indication
in legislative history that phrase "exclud-
ing all transportation outside U.S." means
transportation outside boundaries of any
State, the usual meaning-transportation
to place without U.S.-should prevail;
therefore, the prohibition must be regarded
as requiring inclusion of cost of transporta-
tion in U.S. in sale prices of commissary

Courts-disposition of fines. (See Courts,
fines, disposition, appeals taken from
Alaska magistrate courts)
Statehood-transportation of remains of em-
ployees after admission of Alaska and
Hawaii into Union, employees officially
stationed in those States were only en-
titled, under act of July 8, 1940, 5 U.S.C.
103a, which authorizes the transportation
of remains at Govt. expense under certain
circumstances, to benefits which are pro-
vided for employees in U.S. [who die
while in travel status] rather than to
benefits provided for employees stationed
in Territory or possession of U.S. or in
foreign country; status of Alaska and
Hawaii on date of death of employee being
determinative of benefits payable by


(See Leaves of Absence, annual)

As disqualification of bidders. (See Bidders,
allegations of unfairness, etc.)
Reappointments distinguished—the purpose
of the proviso is sec. 3(b), act of June 21,
1955, 33 U.S.C. 852(b), requiring termina.
tion of appointment of Assistant Director,
Coast and Geodetic Survey, six months
after appointment of new Director, was to
give continuity to bureau during period
new Director was becoming familiar with
duties; accordingly, term "new Director"
in the proviso is construed as having refer-
ence to person appointed to serve first
term and not to Director who is reap.
pointed upon completion of first term so
that appointment of Assistant Director
need not be terminated six months after
reappointment of Director...--.


Page APPOINTMENTS-Continued.
Without regard to other law-in view of
specific provisions in secs. 5 and 7, act of
Sept. 2, 1957, P.L. 85-262, 71 Stat. 588 and
589, which deal with exemptions from laws
affecting employment of persons by
Lincoln Sesquicentennial Commission,
term "services" in sec. 4 of act, which
confers broad discretionary powers on
Commission in procurement of "supplies,
services and property" without regard to
laws and procedures applicable to Federal
agencies, does not have reference to per-
sonal services; therefore, in absence of in
vocation of authority in sec. 4 to exempt
civil service retired annuitant who was em
ployed under contract by Commission
from annuity deduction provisions in sec.
13(b), Civil Service Retirement Act, 5
U.S.C. 2263, together with fact that such
deductions were made, employee's com
pensation must be regarded as subject to
annuity deduction...




Agriculture Department
Administrative expenses-limitation-the
administrative expenses limitation in
Title II, Dept. of Agriculture and Farm
Credit Admin. Appropriation Act, 1960,
which precludes use of funds in "this
authorization" for administrative ex-
penses for price support programs on
agricultural commodities in short supply
for 1960 in excess of $50,000, is applicable
to programs for which administrative
expenses were incurred during 1960 fiscal
year and does not apply to new price
support programs financed with 1961 ap-
propriations, even though programs
were incident to surplus agricultural
commodities produced in calendar year
Insurance on overseas automobiles-al-
though authority for procurement of
insurance on Govt.-owned automobiles
in foreign countries granted to Dept. of
State by act of Aug. 1, 1956, 5 U.S.O.
170h (a), and extended to Foreign Agri-
cultural Service under Dept. of Agricul-
ture and Farm Credit Admin. Appro-
priation Act, 1958, makes appropriations
for Foreign Agricultural Service avail-
able for purchase of insurance for ve-
hicles of that Service, such specific
authority for only one agency indicates
that other appropriations of Dept. of
Agriculture would not be available for
insurance on overseas vehicles of Agri-
cultural Research Service even though
other than monetary considerations in
foreign countries would make such
insurance coverage advantageous to
Refunds for program violations-the de-
posit of unearned conservation pay-
ments, which are refunded to Govt. by





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