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carrying his account to discontinue payment to him of increased allowances on account of his mother, effective as of the date his mother ceased to be dependent on him for her chief support, and his first pay and allowance voucher presented thereafter should have attached a brief statement of the facts showing the reason for discontinuance of payment of the increased allowances.

(B-25739)

SALES-SURPLUS PROPERTY-EFFECT OF GOVERNMENT PRICEFIXING ORDERS

Under the Emergency Price Control Act of January 30, 1942, maximum commodity prices fixed by administrative order prior to the date February 11, 1942-the Price Administrator provided for by the act took office are binding on the United States on and after that date, so that a contractor for the purchase of scrap paper from the Government who paid, in accordance with a contract executed prior to the date of the act, more than the maximum price established therefor is entitled to refund of the excess paid for deliveries on and after February 11, 1942—the claim for refund to be forwarded to this office for direct settlement.

Bids offering to purchase commodities from the Government at prices in excess of the maximum prices established therefor in accordance with the Emergency Price Control Act of 1942, may be rejected, unless bidders are informed, in the invitation for bids, that bids in excess of the maximum will be regarded as having been quoted at the maximum price.

Comptroller General Warren to the Administrator of Veterans' Affairs, May 25, 1942:

I have your letter of April 29, 1942, as follows:

Reference is made to contract VA131h-1237 with the Mervis Iron & Metal Company for the purchase and removal of scrap paper and rags from the Veterans Administration, Danville, Illinois, during the period December 22, 1941, to June 30, 1942, which contract was forwarded to the General Accounting Office on January 19, 1942.

It will be noted that the above concern quoted $12.25 per ton on item 1, paper, scrap, baled.

Under date of April 1, 1942, the Office of Price Administration advised the Veterans Administration as follows:

"The Mervis Iron and Metal Company, 320 East Harrison Street, Danville, Illinois, has taken up with us its Contract VA131h-1237 with your office in Danville, Illinois, for the purchase by the company of scrap baled wastepaper at a price of $12.25 per net ton f. o. b. Veterans Administration, Danville, Illinois. We understand that this contract was executed on December 22, 1941. "As you perhaps know, this office has issued Price Schedule No. 30 establishing a maximum price for the sale of various grades of wastepaper. We understand that the paper which is the subject of your contract is No. 1 mixed paper, as defined in section 1347.10, footnote 5, of the Revised Price Schedule, a copy of which, together with amendments No. 1 and No. 2 thereto, we are enclosing. We also enclose amendment No. 5 to the original schedule.

"At the date of the contract in question, the maximum price for No. 1 mixed paper, if packed in bales, was $14.00 per short ton, f. o. b. point of shipment. However, on February 3, 1942, footnote 5 was amended to provide that such paper could be sold for this price only if it was packed in large machine compressed bales weighing 650 pounds or more and that if any of the requirements of the definition of such paper was lacking, then the maximum price for such

paper might not exceed $12.00 per short ton. This amendment was effective until March 23, 1942, at which time the footnote was again amended to provide that the paper must be packed in machine compressed bales to obtain the maximum price, but the requirement of the size of the bales was omitted.

"We understand from the Mervis Iron and Metal Company that the bales for the Danville paper weigh approximately 130 pounds. Therefore, during the period between February 3 and March 23, the maximum price for such paper could not legally exceed $12.00 per short ton. As you will note from section 1347.1 of this schedule, no person, regardless of the terms of any contract of sale or purchase or other commitment, may sell, offer to sell, deliver or transfer wastepaper at a price in excess of the maximum prices established by the schedule.

"We are advised by the Mervis Iron and Metal Company that upon the issuance of the Amendment of February 3, 1942, it advised the purchasing agent of your Danville office that it was forced to reduce the price set forth under the contract by $2.00 per net ton, since it could obtain from the mill to which it sold the paper only $12.00 per ton. Your Danville office, according to a letter in our possession dated February 23, 1942, advised the Mervis Iron and Metal Company that it had referred the reduction in price to your office in Washington, and had been advised by it that there is no authority by which it can collect less than the price named in the contract.

"The Office of Price Administration is concerned, of course, only with the maximum prices which may be charged under our schedules and not with the enforcement of any contract rights between the individual parties. The amount of reduction in price which the Mervis Iron and Metal Company is asking is not our concern so long as the price to be paid does not exceed the schedule. This, during the period from February 3 to March 23, could not exceed $12.00 per ton.

"We are calling this matter to your attention so that you may make the necessary adjustment to bring the purchase price for this paper during such period, down to a maximum of $12.00 per short ton, f. o. b. your Danville office, since a higher price during that time would constitute a violation of our schedule.

"With respect to the period subsequent to March 23, 1942, you will note that this paper may be sold for a maximum of $14.00, provided that it is packed in machine compressed bales."

It has been ascertained from the Veterans' Administration, Danville, Illinois, that the following sales of paper, scrap, baled, were made under the contract during the period February 3, 1942, to March 23, 1942:

February 11, 1942-4.747 tons @ $12.25 per ton..
March 7, 1942-4.286 tons @ $12.25 per ton_---.

$58.15 $52.50

Payment for the above sales has been made by the contractor and deposited in accordance with the prescribed procedure.

It is noted that in your decision dated May 1, 1941, B-15941, it is stated:

66

* while the maximum price orders were issued for the avowed purpose of obtaining cooperation with the Government in maintaining price stability, there is nothing therein even purporting to bind the Government, in selling its accumulated scrap materials, to the prices fixed therein, or to modify the provisions of existing Government contracts covering such sales."

In reaching such conclusion you cited:

"The familiar and well-established principles that the United States as a contractor is not liable for its acts as a sovereign, and that the sovereign is not affected by statutory provisions or administrative orders unless expressly named therein or included by necessary implication."

Public Law #421, 77th Congress, however, has subsequently been enacted and in connection with the provisions thereof it is stated in title III, section 302 (h): "The term 'person' includes an individual, corporation, partnership, association, or any other organized group of persons, or legal successor or representative of any of the foregoing, and includes the United States or any agency thereof, or any other government, or any of its political subdivisions, or any agency of any of the foregoing: Provided, That no punishment provided by this Act shall apply to the United States, or to any such government, political subdivision, or agency."

A decision is requested relative to whether refund may be made to the Mervis Iron & Metal Company of the amount paid for paper, scrap, baled, during the period February 3 to March 23, 1942, in excess of $12, the ceiling price established by the Office of Price Administration for the commodity during that period.

470350m-42-68

For future guidance in making awards involving the sale by the Veterans' Administration of various commodities, advice is requested as to whether or not a bid in excess of the ceiling price established by the Office of Price Administration should be rejected and the highest bid not in excess of the ceiling price accepted. If the answer is in the negative, instructions are requested as to the action to be taken where an otherwise acceptable bid is in excess of the ceiling price established by the Office of Price Administration.

Letter dated April 1, 1942, from the Office of Price Administration with its enclosures, copy of lettergram dated April 14, 1942, addressed to the Manager, Danville, Illinois, and lettergram in reply thereto dated April 16, 1942, are forwarded with the request that they be returned with your decision.

By section 2 (a) of the Emergency Price Control Act of 1942, Public Law 421, approved January 30, 1942, 56 Stat. 24 (hereinafter referred to as the act), the price administrator provided for by the act is authorized, whenever in his judgment the conditions specified in said section obtain, to establish maximum prices for certain commodities. However, price schedule No. 30, 6 F. R. 4822, establishing maximum prices for wastepaper, originally was issued not by the price administrator provided for by the act, but by the Administrator of the Office of Price Administration established in the Office for Emergency Management of the executive office of the President by Executive Order No. 8734, April 11, 1941, 6 F. R. 1917, as amended by Executive Order No. 8875, August 28, 1941, 6 F. R. 4483. With respect to price schedules so issued, section 206 of the act, 56 Stat. 35, provides:

Any price schedule establishing a maximum price or maximum prices, issued by the Administrator of the Office of Price Administration or the Administrator of the Office of Price Administration and Civilian Supply, prior to the date upon which the administrator provided for by section 201 of this act takes office, shall, from such date, have the same effect as if issued under section 2 of this act until such price schedule is superseded by action taken pursuant to such section 2. Such price schedules shall be consistent with the standards contained in section 2 and the limitations contained in section 3 of this act, and shall be subject to protest and review as provided in section 203 and section 204 of this act. All such price schedules shall be reprinted in the Federal Register within ten days after the date upon which such administrator takes office.

In view of the provisions of this section, and since the price administrator appointed under authority of the act took office February 11, 1942, price schedule No. 30 must be accorded the same effect, on and after that date, as if issued under section 2 of the act. See 7 F. R. 1201, 1260, where said schedule, as revised, is reprinted in accordance with the concluding sentence of section 206.

Section 4 (a) of the act, 56 Stat. 28, provides:

It shall be unlawful, regardless of any contract, agreement, lease, or other obligation heretofore or hereafter entered into, for any person to sell or deliver any commodity, or in the course of trade or business to buy or receive any commodity, or to demand or receive any rent for any defense-area housing accommodations, or otherwise to do or omit to do any act, in violation of any regulation or order under section 2, or of any price schedule effective in accordance with the provisions of section 206, or of any regulation, order, or requirement under section 202 (b) or section 205 (f), or to offer, solicit, attempt, or agree to do any of the foregoing." [Italics supplied.]

In the decision of May 1, 1941, 20 Comp. Gen. 703, to which your letter refers, it was held that price schedules which were issued under the authority of the above-cited Executive orders and which did not even purport to bind the Government, afforded no basis for acceptance of any amount less than the price specified in a contract for the sale by the Government of certain scrap materials, even though the maximum prices established by the schedules were lower than the contract prices. However, subsection (h) of section 302 of the act, 56 Stat. 37, quoted in your letter, expressly provides that the term "person," as used in the act, includes the United States. Hence, under the quoted provisions of section 4 (a), it is unlawful for the United States to demand or receive for waste paper delivered on or after February 11, 1942, under the contract here involved, any amount in excess of the maximum established by revised price schedule No. 30-notwithstanding the contract was entered into prior to January 30, 1942, the date of approval of the act. See my decision of May 11, 1942, B-25461, to the Secretary of the Interior.

Revised price schedule No. 30, as amended and as effective under section 206 of the act, established a maximum price of $12 per ton, effective during the period February 11 to March 23, 1942, for scrap paper in bales weighing less than 650 pounds. See section 1347.10, appendix A, footnote 5, of the revised price schedule, 7 F. R. 1260, and amendment No. 2 thereto, 7 id. 2153. Since it is stated in your letter that the Mervis Iron & Metal Co. made payment at the contract price of $12.25 per ton for baled scrap paper delivered to it on February 11 and March 7, 1942, the contractor would be entitled to a refund at the rate of 25 cents per ton for such deliveries, provided it be established that the paper was delivered in bales weighing less than 650 pounds each. Any claim by the contractor for refund of amounts paid in excess of maximum prices established under the act should be forwarded to this office for direct settlement, with a statement as to the weight of the bales making up the deliveries to the contractor on those dates.

Since it is unlawful for the Government to demand or receive, for the sale or delivery of commodities, any amount in excess of maximum prices therefor as established under the act, bids offering to purchase such commodities at prices in excess of the maximum prices so established may be rejected-unless bidders are clearly informed, in the invitation for bids, that bids quoting a price in excess of the maximum will be regarded as having been quoted at the maximum price. In this connection, see my decision of March 19, 1942, B-24503, to the Secretary of the Interior, to the effect that it is proper and advisable to insert in invitations for bids for the sale of commodities for which maximum

prices have been established under the act a provision calling attention to the act and informing bidders that a price in excess of the maximum will not be considered, or, that a price in excess of the maximum will be regarded as having been quoted at the maximum. See, also, my decision of May 11, 1942, hereinbefore cited.

The papers transmitted with your letter are returned herewith as requested.

(B-25847)

PAY-ADDITIONAL-SEA AND FOREIGN DUTY-ARMY PERSONNEL Section 18 of the act of March 7, 1942, authorizing additional pay for sea duty is, under its specific terms, applicable to the military as well as the naval forces of the United States, and while the definition of "sea service" contained in section 1571, Revised Statutes, as amended, applies to Navy personnel, if the conditions of service at sea, as defined in the statute and interpreted in decisions of the accounting officers and the courts, exist with respect to Army personnel, they would be entitled to the additional pay for sea duty. Army personnel assigned to duty aboard Army or Navy vessels-as distinguished from being ordered thereon for travel incident to foreign duty-are not, while the vessels are on voyages from a port within the United States to another port either within or without the United States, or are operating within harbors, on foreign duty within the meaning of section 18 of the act of March 7, 1942, authorizing additional pay to such personnel while on sea or foreign duty, but if the conditions of service at sea, as defined in section 1571, Revised Statutes, as amended, exist, they would be entitled to the additional pay as for sea duty.

If, with respect to Army personnel on duty as gun crews aboard Army transports or vessels of the Maritime Commission, the conditions of service at sea, as defined in section 1571, Revised Statutes, as amended, exist, such personnel would be entitled to the additional pay for sea duty authorized by section 18 of the act of March 7, 1942, so long as they are not detached from that duty and avail themselves of the mess facilities and quarters aboard the vessels. Personnel of the Army air forces who perform reconnaissance or patrol flights beyond the continental limits of the United States from their bases in the United States are not on foreign duty within the meaning of section 18 of the act of March 7, 1942, authorizing additional pay to members of the military forces while on foreign duty, whether or not the periods of such flights extend for more than one day.

The base pay of Army enlisted men of the fourth, fifth, sixth, and seventh grades rated as air mechanics, first class, or air mechanics, second class, is fixed by section 2 of the act of July 2, 1926, at the rates prescribed for enlisted men of the second and third grades, respectively, and their per centum increase in base pay for foreign duty authorized by section 18 of the act of March 7, 1942, should be computed upon the base pay of such grades rather than the grades in which they were serving when rated.

Assistant Comptroller General Elliott to the Secretary of War, May 25, 1942:

Reference is made to your letter of May 2, 1942, presenting for decision certain questions as to the propriety of payments of the increases in pay arising under the provisions of section 18 of the act of March 7, 1942, Public Law No. 490, 56 Stat. 148, which provides:

SEC. 18. Hereafter the base pay of any enlisted man, warrant officer, or nurse (female) in the military or naval forces of the United States shall be increased

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