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consumed in the routine procedure of making appointments, to wait until contracts are awarded before requesting the Civil Service Commission to supply certain types of employees such as construction engineers, accountants, timekeepers, material checkers, etc. Accordingly, it has been the practice to appoint, in advance of such awards, a sufficient number of these employees to meet the requirements and to assign them to the eight district engineer offices throughout the country prior to award of contracts. They are then given appropriate training and instruction and perform such duties in connection with defense housing as may be assigned to them. However, when they report for duty at the district offices it is not known how long they will remain at such stations, or to what defense projects they will be assigned. In fact, some of them remain at the district offices for a considerable period of time.

Under these circumstances it has been considered that the district offices to which they report are their headquarters and they have been paid no subsistence while there; although if and when they are transferred for duty elsewhere, their actual traveling expenses and per diem in lieu of subsistence while in travel status have been paid by the Government.

There have been several hundred similar cases during the past few months and while some of the employees remain only a short time at the district offices to which they first report, it is estimated that the average period of duty at the district offices has been at least 30 days. It is apparent, therefore, that the payment by the Government of travel expenses from the district offices (as their first duty stations) to the projects to which they are later transferred results in considerable saving to the Government as compared to the payment to them of subsistence while on duty in the district offices as indicated in 10 Comp. Gen. 222, cited in the Preaudit Difference Statements.

In view of the foregoing, it is requested that reconsideration be given the matter of certifying these nine vouchers, and that the existing procedure of the Public Buildings Administration be approved.

An early reply will be appreciated.

In 10 Comp. Gen. 222, it was held as follows (quoting from the syllabus) :

A newly appointed employee required to perform temporary duty before reporting to his first official duty station may be reimbursed for additional subsistence and transportation expenses incurred by reason of such temporary duty, including, if administratively authorized, a per diem in lieu of subsistence expenses for any additional travel time involved and for the temporary duty only to the extent that the expenses incurred are in excess of the expenses which would have been incurred by the appointee in going directly from his home to the place fixed as his first post of duty.

The rule stated in 10 Comp. Gen. 222 was based upon the facts there appearing-involving the performance of temporary duty before reporting to official or first duty station—and is not to be regarded as applicable to appointments of employees who are first assigned for training and duty at Washington, D. C., or elsewhere.

Information regarding the status of the named employees has been obtained from the travel vouchers, pay rolls, and letters of appointment, as follows:

Employee

Date of
E. O. D.

Place of E. O. D.

Transfer approved

Date of departure

Permanent headquar.

ters

L. Scheier.
L. L. Baxter.
R. W. Harvey.
S. Defrin..
W. E. Brady
D. A. Biddle
H. E. Clarry.
8. H. Edmunds
A. M. Strack..

11/27/1940
12/16/1940
2/15/1941
2/18/1941
12/23/19 10

1/4/1941
11/12/1940
12/9/1940
1/15/1910

Washington. D. C...
Atlanta, Ga.
Washington, D. C

do.

.do
Chicago, ni
New York, N. Y
Kansas City, Mo.
New York, N. Y.

12/2/1940
2/17/1941
2/17/1941
2/17/1941
12/23/1940
1/20/1941
2/5/1941

1/1/1941 1/20/1941

12/8/1940 2/25/1941 2/23/1941 2/25/1941 12/28/1940 1/26/1941

2/9/1941
1/24/1941
1/24/1941

Fort Knox, Ky.
Augusta, Ga.
Fort Jackson, S. C.
Fort Bragg, N. C.
Fort Benning, Ga.
Fort Devens, Mass.
Fort Brasg. N. C.
Benicia, Calif.
Fort Devens, Mass.

In view of your statement that the employees in question performed actual services at district offices to which assigned for training and that it was not known when they reported to such district offices how long they would remain there or to what project they would be assigned, it may be concluded that the district offices to which assigned for training and duty constituted their first actual headquarters and their expense vouchers will be reaudited upon that basis.

(B-18008)

CONTRACTS-WALSH-HEALEY ACT APPLICABILITY-MANUFACTURE

OF ARTICLES FROM GOVERNMENT-OWNED MATERIALS

While there is doubt as to whether contracts for manufacturing articles from

Government-owned materials, except for certain incidental materials, are contracts for the “manufacture” of articles and supplies subject to the provisions of the Walsh-Healey Act, or whether they are contracts for "services”. and, therefore, outside the act, since administration of the act is vested in the Department of Labor and in view of the doubt in the matter, such contracts will not be questioned by this office by reason of the inclusion of the provisions of the act pursuant to the determination of the Department of

Labor that it is applicable.
Comptroller General Warren to the Secretary of War, July 8, 1941:

I have your letter of June 16, 1941, as follows:

Reference is made to letter dated May 19, 1941, from the Audit Division of your office relating to the following contracts:

W669-qm-10642 Supreme Fashion Clothes Corp.

W669-qm-10656 Sigmund Eisner Company These contracts cover manufacture of service wool coats from Governmentowned materials.

It is stated that such contracts appear to be essentially for “services” as distinguished from "supplies, articles, and equipment.” The conclusion is reached therein that these contracts are not properly subject to the Walsh-Healey Act, and the provisions of that act were improperly included.

The Division of Public Contracts of the Department of Labor has determined that contracts requiring the manufacture of articles from Government-owned materials are to be considered as contracts for supplies, and that the provisions of the act are for application,

Inasmuch as the terms of the act charged the Secretary of Labor with the administration thereof, this office has heretofore followed the determination of that Department. The provisions of the act have been inserted in all advertisements for bids wherein articles were to be manufactured from Government-owned materials.

Thus there is an apparent conflict between the Department of Labor and the Audit Division of your office as to what constitutes "supplies, articles and equipment” within the contemplation of the Walsh-Healey Act. Accordingly, your decision is requested as to the proper application of said act to contracts for manufacturing articles from Government-owned materials.

The Walsh-Healey Act of June 30, 1936, 49 Stat. 2036, provides, in part, as follows:

That in any contract made and entered into by any executive department, Independent establishment, or other agency or instrumentality of the United States

for the manufacture or furnishing of materials, supplies,

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articles, and equipment in any amount exceeding $10,000, there shall be included the following representations and stipulations: Each of the contracts referred to in your letter is stated to cover the manufacture of service wool coats, is for an amount in excess of $10,000, and contains the following provisions:

Materials and findings specified in Invitation for Bids No. 669-41-NEG-37 to be furnished by the Government

All other materials and findings, including all labels, must be furnished by the contractor and must conform to the specifications indicated.

Sheet No. 4 of the contract specifications, attached to and forming a part of each of the contracts, provides, in part, as follows:

Felt (interlining) ; wadding; thread, cotton; thread, silk; gimp and tape must be furnished by the contractor

Since it appeared that most of the materials to be used in the manufacture of the coats were to be furnished by the Government and that the contract price apparently was based primarily on the services to be performed by the contractor in converting the materials into coats, the Audit Division of this office questioned the inclusion in the contracts of the provisions of the Walsh-Healey Act on the theory that the contracts appeared to be essentially for services," as distinguished from contracts "for the manufacture or furnishing of materials, supplies, articles, and equipment,” and, therefore, outside the act.

Whether the contracts in question are contracts “for the manufacture or furnishing of materials, supplies, articles, and equipment,” properly subject to the provisions of the Walsh-Healey Act, or whether they are contracts for "services," and not within the contemplation of the said act, is a matter not free from doubt but as to which substantial arguments might be presented in support of either view adopted. It would appear clear that the greater part of the contract prices and the contractors' responsibility under the contracts is based upon the performance of services which would indicate that the contracts essentially are contracts for “services.” On the other hand, the contracts expressly are stated to be for the manufacture of coats and they require the contractors not only to convert or transform Government-owned materials into finished articles, but, also, to furnish certain materials necessary to that end.

It appears from your letter that the Department of Labor has ruled that such contracts are considered as being subject to the provisions of the Walsh-Healey Act. Since administration of the said act is vested in the Department of Labor and since the question of whether the contracts are for "services" or are for the "manufacture" of articles or supplies is not free from doubt, these and similar contracts will not hereafter be questioned by this office by reason of the fact that they include the provisions of the Walsh-Healey Act pursuant to the determination of the Department of Labor that the said act is applicable thereto.

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(B-10730)

TRAVEL ALLOWANCE-NAVAL RESERVISTS

The travel allowance payable, under the decision published in 20 Comp. Gen. 1,

to members of the Naval Reserve who are discharged at expiration of enlistment while on active duty in connection with the existing emergency declared by the President should be computed upon the distance from the place of discharge to the same place to which they would be entitled to transportation and subsistence were they relieved from active duty and not

discharged from the Naval Reserve. From and after the date of receipt of ALNAV 59, dated June 10, 1941, which provides that "Naval Reserve enlisted personnel

will be retained on active duty for duration of the existing national emergency even though beyond their term of enlistment,” a reenlistment entered into or extension taking effect thereafter is superfluous and inoperative to confer a right to

travel allowance. Assistant Comptroller General Elliott to the Secretary of the Navy, July 9,

1941: There has been considered your letter of May 3, 1941, as follows: In the Assistant Comptroller General's decision B-14980 of March 14, 1941, the question was considered as to whether enlisted men of the Naval Reserve discharged at other than expiration of enlistment while on active duty in time of war or national emergency were entitled to travel allowance under the same conditions as enlisted men of the regular Navy. It was stated in the decision :

The obligation of the Government to return an enlisted man of the Naval Reserve to his home or the place from which taken for active duty upon release therefrom is not increased if at such time he is discharged from his enlistment contract. When so released from active duty (that is, by discharge) either during a time of war or national emergency or in time of peace, the man is entitled to nothing more than transportation and subsistence to the place from which he entered on active duty." The specific question presented for decision accordingly was answered by stating that "enlisted men of the Naval Reserve who are discharged other than at expiration of enlistment when on active duty in time of war or national emergency are not entitled to travel allowance at five cents per mile.”

In the Acting Comptroller General's decision of July 1, 1940 (20 Comp. Gen. 1), the statement was made that if the Navy Department is of the opinion that enlisted men of the Naval Reserve whose enlistments expire while on active duty during the present emergency must be discharged, they may be paid the travel allowances prescribed by section 126 of the National Defense Act, as amended September 22, 1922 (42 Stat. 1021; 34 U. S. Code 895), and that such allowances are payable even if they immediately reenlist or extend their enlistments. In this decision it was held that members of the Naval Reserve discharged at expiration of enlistment are entitled to travel allowance to the place at which found physically fit for active duty. The Navy Department has determined that enlisted men of the Naval Reserve on active duty are entitled to discharge at expiration of enlistment. In this connection the following instructions were published to the naval service in Article 2506-1 (d), U. S. Naval Travel Instructions:

"On expiration of enlistment.-Enlisted men of the Naval Reserve whose enlistments expire while on active duty in connection with the national emergency proclaimed by the President are entitled to travel allowance at the rate of 5 cents per mile from place of discharge to place at which found physically qualified for such active duty. Travel allowance is payable regardless of immediate reenlistment or extension of enlistment. (Comp. Gen. B-10730, July 1,

In discussing the place to which enlisted men of the Naval Reserve are entitled to payment of travel allowance on discharge at expiration of enlistment while on active duty, it was stated in the Acting Comptroller General's decision of Jnly 1, 1940, supra, that enlisted men of the regular Navy are entitled to travel allowance to the place of acceptance for enlistment, but that,

"In the case of a member of the Naval Reserve he is entitled to travel allowance to the place of acceptance for muster into the service, that is, the place of

1940)"

muster in, the 'acceptance' in his case being the place he is found physically fit for duty and assigned to active duty. In other words, the place of acceptance for enlistment in the Naval Reserve in time of peace is not necessarily the place from which the member entered on active duty for the emergency. Accordingly, he would be entitled to travel allowance to the same place he would be entitled to transportation and subsistence were he relieved from active duty and not discharged from the Naval Reserve." (Italics supplied.)

In connection with the foregoing, it is pointed out that under the provisions of the former Naval Reserve Act of 1925 (43 Stat. 1080) and the present Naval Reserve Act of 1938 (52 Stat. 1175; 34 U. S. Code, Sup. V, section 852, et seq.), enlisted men of the Naval Reserve upon release from active duty or training duty with pay have consistently been furnished with transportation and subsistence from the place at which released from active duty to their homes or places from which called to active duty and not to the place at which found physically qualified for active duty or training duty with pay.

For reasons above set forth, reconsideration is requested of that part of the Acting Comptroller General's decision of July 1, 1910 (20 Comp. Gen. 1), holding that “Members of the Naval Reserve who are discharged at expiration of enlistment and while on active duty in connection with the existing emergency declared by the President, are entitled to travel allowance to place of muster in for the emergency active duty service and therefore not necessarily to the place of acceptance for enlistment in the Naval Reserve,” and that the Navy Department be advised whether enlisted men of the Naval Reserve who are discharged at expiration of enlistment are entitled to travel allowance at the rate of five cents per mile from the place at which they are released from active duty to the place from which they are called to active duty.

For reasons more fully stated in the decision of July 1, 1940, 20 Comp. Gen. 1, referred to in your letter of May 3, 1941, it was concluded that enlisted members of the Naval Reserve who were discharged upon expiration of enlistment while on active duty were entitled to the travel allowance benefits of section 126 of the National Defense Act as amended by the act of September 22, 1922, 42 Stat. 1021, which provided in part:

Hereafter an enlisted man discharged from the Army, Navy, or Marine Corps, except by way of punishment for an offense, shall receive 5 cents per mile for the distance from the place of his discharge to the place of his acceptance for enlistment, enrollment, or muster into the service:

It is understood that in some instances enlisted men of the Naval Reserve when called to active duty are ordered to a place other than their homes for physical examination to determine their physical fitness and if found physically fit and accepted they are then sent to a duty station which might be, and usually is, a different place than the place from which called or where the physical examination was conducted. In decision B-14980, dated March 14, 1941,20 Comp. Gen. 519, it was held that enlisted naval reservists discharged at other than expiration of enlistment were entitled to transportation and subsistence to the place from which they entered upon active duty.

In the decision of July 1, 1940, 20 Comp. Gen. 1, it was held that travel allowance in such case should be computed upon the distance from the place of discharge from the Naval Reserve to the same place to which he would be entitled to transportation and subsistence were he relieved from active duty and not discharged from the Naval Reserve. The computation of distances are on a common basis, whether

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