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at the commercial rate would be borne, although indirectly, by the United States. Also, it was held in Western Union Telegraph Company v. United States, 66 Ct. Cls. 38, that the Government rate applied to telegrams transmitted for a Government contractor who was acting under the terms of his contract as an agent of the United States for that among other purposes.
The terms of contract No. W-819-eng-778, here involved, provide for the reimbursement to the contractor of amounts expended for such labor, materials, tools, machinery, equipment, facilities, and supplies required in connection with the construction of a complete airport at Savannah, Ga., as shall not be furnished by the Government, together with all necessary expenses, plus a stipulated fixed fee for his services; and that the Government agrees to reimburse the contractor for, among other things, the cost of telegrams, but reserves the right "to pay directly to the persons concerned all sums due from the Contractor for labor, materials, or other charges." It should be noted as pertinent in this matter that the United States has the right under the terms of the contract to add or omit work; that title to all work completed or in the course of construction and to all materials, tools, machinery, equipment and supplies, which have been delivered upon the site and accepted by the contracting officer, shall be in the Government; that no subcontracts shall be made except upon the written approval of the contracting officer; and that the work shall be performed subject in every detail to the supervision, direction. and instruction of the contracting officer.
It appears that by reason of those considerations the Bureau of Internal Revenue, Treasury Department, has ruled that telephone and telegraph service in connection with cost-plus-a-fixed-fee contracts are exempt from the Federal tax imposed by section 3465 of the Internal Revenue Code, as a service or facility furnished to the United States within the meaning of section 3466 thereof; and has so advised the Quartermaster General, War Department, in a letter of February 1, 1941, in pertinent part, as follows:
It appears that under the cost-plus-fixed-fee contract the contractor to a certain extent is deemed to be an agent of the Government. It is stated in your letter of January 29, 1941, that all telegraph, cable and radio dispatches are prepared on standard Government forms and certified by the contracting officer or his representative as being used for an exclusive governmental purpose. All telephone, telegraph, cable or radio messages will be paid for directly by the Government. Whenever possible the telephone or telegraph company furnishing the services will be requested to bill the Government direct for such services. It appears that representatives of the Federal Communications Commission have expressed the opinion informally that the telegraph messages should be billed at Government rates.
Under the circumstances, the charges paid directly by the Government for telephone, telegraph, radio, or cable services utilized in connection with the construction work done under the cost-plus-fixed-fee contracts are exempt from tax by reason of the provisions of section 3466 of the Internal Revenue Code.
In connection with a contract similar to the one here involved, the Supreme Court of Alabama in the recent case of King & Boozer v. Alabama, decided on or about July 29, 1941, in holding that an Alabama privilege or license tax was not applicable to purchases of a cost-plus-a-fixed-fee contractor, the cost of which was to be borne by the Federal Government, concluded that the contractor was acting for the Government in the accomplishment of a governmental purpose and that his acts were all under the immediate and direct supervision of the governmental authorities, so that the burden of the tax fell directly and immediately upon the Federal Government. In line with the foregoing it would appear that the contractor here involved should be regarded as acting directly in behalf of the Federal Government so as to require the transmission of such telegrams as may pertain to the work in question at Government rates rather than at commercial rates. Consequently, whether the cost of such telegrams is paid to the contractor by way of reimbursement of his expenses or whether it is paid directly to the telegraph company in accordance with the right reserved in article II, paragraph 5. of the contract, as to which see decision of July 31, 1941, B-19052, 21 Comp. Gen. 92, to you, the payment of any amount in excess of the established Government rate on such telegrams is not authorized. The voucher and accompanying papers are returned herewith.
COMPENSATION—WITHIN-GRADE PROMOTIONS-POSTAL SERVICE
Positions appropriated for in the appropriation item "Post office stationery, equipment, and supplies," act of May 31, 1941, the salaries of which were first specifically fixed at definite rates in the Postal Service Reclassification Act of 1925 and now are administratively fixed under a lump-sum appropriation at definite rates in line with the 1925 statute, are in the Postal Service, and, accordingly, are excluded from the Classification Act of 1923, so that the salaries of said positions may not be adjusted under the act of August 1, 1941, providing a uniform within-grade salary-advancement plan for employees whose salary rates are fixed under the Classification Act of 1923.
Acting Comptroller General Elliott to the Postmaster General, August 30, 1941: I have your letter of August 22, 1941, as follows:
Certain employees of the field service of this Department are paid from the appropriation "Post office stationery, equipment and supplies," their salaries having been fixed by section 9 of the act of February 28, 1925 (43 Stat. 1064). Your decision is requested as to whether these employees come within the provisions of the Ramspeck Act (Public, No. 200, 77th Cong.).
Section 9 of the act of February 28, 1925, 43 Stat. 1064, cited in your letter, provides:
That the salary of requisition fillers and packers in the division of equipment and supplies shall be as follows: One foreman, $2,100 per annum; ten requisition fillers and nine packers at $1,800 each per annum.
In annual appropriation acts for the Post Office Department enacted subsequent to the quoted statute additional positions at specified salary rates have been authorized. The last appropriation act so providing for payment of specified positions of the class here involved was the act of January 26, 1927, 44 Stat. 1051, reading, in pertinent part, as follows:
For expenses incident to the shipment of supplies, including hardware, boxing, packing, and the pay of employees in connection therewith in the District of Columbia at the following annual rates: Storekeeper, $2,650; foreman, $2,100; requisition fillers-ten at $1,800 each, one at $1,600, two at $1,200 each; packers— nine at $1,800 each, one at $1,600, two at $1,200 each; and two chauffeurs, at $1,400 each; in all, $67,750.
Since that time the appropriation acts have not specified the rates, but, instead, have provided a lump-sum for payment of personnel of the class in question.
The appropriation item, "Post office stationery, equipment, and supplies," under the heading, "Office of the Fourth Assistant Postmaster General," act approved May 31, 1941, Public Law 88, 55 Stat. 212, provides, among other things, "for expenses incident to the shipment of supplies, including hardware, boxing, packing, and not exceeding $62,300 for the pay of employees in connection therewith in the District of Columbia." See The Budget, 1942, page 896. It is understood that the involved employees are in the field service with place of duty, Washington, D. C.-it being pertinent to note in that connection that the appropriation for the "Office of the Fourth Assistant Postmaster General," under which the mentioned appropriation item appears, is included under the general heading: "Field Service, Post Office Department."
The act of August 1, 1941, Public Law 200, 55 Stat. 613, amends section 7 of the original Classification Act of 1923, to provide a uniform within-grade salary-advancement plan for employees whose salary rates are required to be fixed administratively at one of the rates within the salary ranges prescribed by section 13 of the act based on the allocation of the positions.
Section 2 of the original Classification Act, 42 Stat. 1488, provides, in pertinent part, as follows:
The term "position" means a specific civilian office or employment, whether occupied or vacant, in a department other than the following: Offices or employments in the Postal Service;
As hereinbefore indicated, the salaries of the positions mentioned in your letter were first specifically fixed at definite rates in the Postal Service Reclassification Act of February 28, 1925, and were later car
ried at fixed rates in the annual Postal Service appropriation acts up to and including the act of January 26, 1927, supra. Thereafter, they were administratively fixed under a lump-sum Postal Service appropriation at definite rates corresponding with rates stated in the estimates on the basis of which the lump-sum appropriations were provided the rates so administratively fixed appearing in line with the 1925 statute, and certain subsequent appropriation acts. In the light of the statutes above referred to, relating to the Postal Service, I am constrained to hold that the positions here involved are in the Postal Service and, accordingly, are excluded from the Classification Act, and that the salaries fixed for the employees so occupying said positions may not be adjusted by administrative action pursuant to the act of August 1, 1941, supra. In other words, the question presented is answered in the negative.
STATE JURY SERVICE-POSTAL SERVICE
The term "any employee of the United States" as used in the act of June 29, 1940, relating to leave and compensation during jury service of Government employees, includes postmasters of all classes.
In connection with the provision of the act of June 29, 1940, for crediting against compensation of Federal employees amounts received for jury service in State courts, postmasters may be administratively instructed to pay the net amounts due postal employees absent on account of such service and to show on the reverse side of the pay vouchers the pay roll information required by 20 Comp. Gen. 279 as to days of service as juror and daily fee paid; amount received from State; etc.
A report of absence on jury service in State courts should be required of third and fourth-class postmasters, and such postmasters should be required to account for the entire amount received from the State on account of such jury service to the extent that it is not in excess of the compensation payable to him by the United States; however, he should receive credit for an amount equivalent to that necessarily expended in the conduct of the affairs of his office during his absence, provided that such credit shall not exceed the amount payable to the postmaster by the United States as compensation for the period in question.
Acting Comptroller General Elliott to the Postmaster General, September 3, 1941:
There was received from the Comptroller, Bureau of Accounts, Post Office Department, a letter dated May 1, 1941, as follows:
Under date of November 22, 1940 the Comptroller General directed that the "Remarks" column of pay rolls and vouchers should set forth data, in substance as follows:
Days of service as juror and daily fee paid.
Citation to certificate of deposit, number and date.
If refundment be not made by the employee, a deduction should be made from the compensation due, and should be shown in column, "Other reductions", with appropriate explanation in the "Remarks" column, along the lines set forth above. In support of every refundment or deduction there should be submitted a jury duty certificate signed by the clerk of the court.
Will you kindly advise if it will be satisfactory to your office if postmasters are instructed to pay the net amount due postal employees absent on account of jury service, and show the above information on the reverse side of the pay voucher, to be accompanied by jury service certificate signed by the clerk of the court in support of the deduction made.
It is also requested that this office be advised whether any report of absence on account of jury service by third- and fourth-class postmasters should be made in connection with the compensation claimed in their quarterly accounts. This request is made due to the fact that third- and fourth-class postmasters employ substitutes during their absence.
In response to the first question presented, you are advised that if it be considered administratively desirable to instruct postmasters to pay the net amount due to postal employees absent on account of jury service and to show the required information [20 Comp. Gen. 279] on the reverse side of the pay vouchers, this office will not object to such procedure.
With respect to the second question presented, you are advised as follows: The act of June 29, 1940, Public, 676, 54 Stat. 689, provides in pertinent part:
That the compensation of any employee of the United States or of the District of Columbia who may be called upon for jury service in any State court or court of the United States shall not be diminished during the term of such jury service by reason of such absence, except as provided in section 3, nor shall such period of service be deducted from the time allowed for any leave of absence authorized by law.
SEC. 3. There shall be credited against the amount of compensation payable by the United States to any employee specified in section 1 for such period as such employee may be absent on account of jury service in the court of any State any amounts which such employee may receive from such State on account of such jury service.
The term "any employee of the United States" as used in this act is considered to be sufficiently broad and comprehensive to include postmasters of all classes.
It is provided in section 418, Postal Laws and Regulations, 1940, that
In case of the sickness or unavoidable absence from his office of the postmaster of any money-order post office, he may, with the approval of the Postmaster General, authorize the chief clerk, or some other clerk employed therein, to act in his place, and to discharge all the duties required by law of such postmaster;
"An absence on jury duty in a State or Federal court would appear to constitute an "unavoidable absence" within the meaning of that provision. With respect to the absence of postmasters on annual leave, sick leave, leave without pay, etc., it is provided, among other things, in section 446, Postal Laws and Regulations, 1940, as follows:
At post offices where the appointment of an assistant postmaster has not been specifically authorized by the department the postmaster shall designate one of the clerks to perform the duties of the postmaster during his absence.