have heretofore or who may hereafter be ordered to active duty with the military or naval forces of the United States shall be entitled to receive, in addition to their military pay, compensation in their civilian positions covering their accumulated or current accrued leave or to elect to have such leave remain to their credit until their return from active military or naval service. The act of December 6, 1940, 54 Stat. 1221 (Public, No. 887, 76th Cong.), provides as follows:

That section 3 of the act approved June 25, 1938 (ch. 678, 52 Stat. 1077; U. S. C., 1934 edition, supp. V, title 39, sec. 39a) is amended by the addition of the following: "Provided further, That at any post office the postmaster of which has been called for duty as a member of the National Guard or of the Reserve of the Army, Navy, or Marine Corps or pursuant to draft or voluntary enlistment, the Postmaster General is authorized to grant leave of absence without pay to such postmaster and to appoint an acting postmaster at such post office to serve for the period only of the absence of the regular postmaster on military service, requiring such acting postmaster to furnish suitable bond with surety for the faithful performance of the duties as acting postmaster and releasing the regular postmaster and his sureties of responsibility for the conduct of the office during such period: Provided further. That where a postmaster resigns for the purpose of military service as herein described and subsequently wishes to resume his previous position as postmaster he may be permitted, upon being released from military service, to withdraw his resignation and resume the office of postmaster, or be reappointed thereto, in the event the office is being conducted at the time by an acting postmaster: Provided further, That appointments of acting postmasters to serve during absences of regular postmasters on leave granted pursuant to the terms of this Act shall be made in accordance with the civil-service laws, rules, and regulations, and such appointments may continue until the return to duty of the regular postmaster or until it has been determined that the regular postmaster will not return to duty."

The Treasury and Post Office Departments Appropriation Act, 1941, approved March 25, 1940, 54 Stat. 55, 72, contains an item, as follows:

Compensation to postmasters.-For compensation to postmasters, including compensation as postmaster to persons who, pending the designation of an acting postmaster, assume and properly perform the duties of postmaster in the event of a vacancy in the office of postmaster of the third or fourth class, and for allowances for rent, light, fuel, and equipment to postmasters of the fourth class, $49,650,000.

See, also, the corresponding item in the Appropriation Act for the fiscal year 1942, approved May 31, 1941, Public Law 88, 55 Stat. 229. Section 445, subsection 5, Postal Laws and Regulations, 1940, provides, in pertinent part, as follows:

Postmasters of all classes shall be granted leave of absence as follows, and the provisions of this section apply in all respects to acting postmasters:

(a) Annual leave.-15 days annual leave with pay during each fiscal year, the unused portion of which is cumulative, but the taking of the same will be limited to 30 days in any one fiscal year. Sundays and holidays are excluded in counting annual leave, and Saturdays (or short workweek day observed by the community other than Saturday) are excluded in extended periods of a week or more.

It is understood that said regulations were issued under authority of the acts of Congress authorizing the granting of annual leave to "employees in the postal service." See the act of May 15, 1939, 53 Stat. 745 (39 U. S. C. 823).

Postmasters are regarded as "employees of the United States Government" within the meaning of Public Law 202, supra. Cf. decision dated September 3, 1941, B-13341, 21 Comp. Gen. 191. Under the regulations approved by the Postmaster General, postmasters are entitled to accumulated leave not to exceed "30 days in any one fiscal year," and are credited annual leave (accrued leave) at the rate of "15 days annual leave with pay during each fiscal year." Hence, if the postmasters "who have been on active military duty since the fall of 1940" (quoting from your letter) were ordered to active military duty they would appear to meet the conditions of Public Law 202, and would thus be entitled to the benefits of that statute. The terms of Public Law 202 are regarded as in conflict with, and as superseding, that portion of the act of December 6, 1940, which authorized the Postmaster General to grant leave of absence without pay to postmasters during their absence on active military duty to the extent of any annual leave for which payment is authorized to be made. The fact that their offices have been filled by an acting postmaster temporarily during their absence on active military duty under authority of the act of December 6, 1940, supra, does not defeat the right of postmasters to receive compensation for the accumulated and current accrued leave to their credit (not to exceed 30 days) at the time they were ordered to active military or naval duty, for which there would be available any unexpended balance of the lump sum appropriation item "Compensation to postmasters" for the fiscal year 1941.

Such postmasters who voluntarily enlisted in the military or naval forces are not, of course, entitled to the benefits of Public Law 202. See decision dated September 13, 1941, B-20149, 21 Comp. Gen. 210.

(B-20102)

TELEPHONES INSTALLATION IN PRIVATE RESIDENCES-AVAILABILITY OF RENTALS FROM DEFENSE HOUSING

The authorization in section 201 of the act of September 9, 1940, to use the rentals from certain defense housing projects for the management, maintenance, etc., of the housing units constitutes such rentals appropriated funds, and, therefore, the prohibition in section 7, of the act of August 23, 1912, against the use of appropriated funds for the installation of telephones in private residences precludes the use of the rentals for installing and maintaining telephones in the private quarters of management and maintenance personnel at the projects.

Comptroller General Warren to the Secretary of the Navy, September 22, 1941: I have your letter of August 26, 1941, as follows:

The Commanding Officer of the Naval Air Station, Corpus Christi, Texas, has requested authority to install and maintain four telephones for the use of the combined Police and Fire Station, and in the residences of the Chief Main

tenance Mechanic, the Assistant Manager and the Senior Clerk of the Office of Defense Housing Project at Peary Place, Civilian Housing Project on the Cayo del Oso, Corpus Christi, Texas, which project has been constructed for the use of employees of the U. S. Naval Air Station, Corpus Christi, Texas, pursuant to section 201, Supplemental Appropriations Act approved September 9, 1940 (Public, No. 781, 76th Congress, 3d session).

It is considered to be essential that the residences of the persons stated be connected by telephone and that the police and fire station be provided with such service in connection with the maintenance and operation of the project. It is contemplated that the funds to be used for such telephone service will be derived from rents and not from appropriations made or to be made by Congress. However, in view of the provisions of section 7 of the act of August 23, 1912 (37 Stat. 414; 31 U. S. C. 679), which prohibits the use of appropriated funds for telephone service installed in private quarters and for similar charges, a question has been raised as to whether the request referred to may legally be complied with.

It is, therefore, requested that you inform the Navy Department whether under the circumstances stated, payment may legally be made for telephones to be installed in the quarters and for the purposes mentioned at said Defense Housing Project.

Section 7 of the act of August 23, 1912, 37 Stat. 414, provides:

That no money appropriated by this or any other act shall be expended for telephone service installed in any private residence or private apartment or for tolls or other charges for telephone service from private residences or private apartments, except for long-distance telephone tolls required strictly for the public business, and so shown by vouchers duly sworn to and approved by the head of the department, division, bureau, or office in which the official using such telephone or incurring the expense of such tolls shall be employed.

The language of the section quoted is plain and comprehensive and has been uniformly construed to prohibit the furnishing at public expense of telephone installation and service in a private residence or quarters. See 11 Comp. Gen. 87, and decisions therein cited.

Section 201 of the act of September 9, 1940, 54 Stat. 883, provides, insofar as here material, as follows:

To the President for allocation to the War Department and the Navy Department for the acquisition of necessary land and the construction of housing units, including necessary utilities, roads, walks, and accessories, at locations on or near Military or Naval Establishments, now in existence or to be built, or near privately owned industrial plants engaged in military or naval activities, which for the purposes of this act shall be construed to include activities of the Maritime Commission, where the Secretary of War, the Secretary of the Navy, or the Chairman of the Maritime Commission shall certify that such housing is important for purposes under their respective jurisdiction and necessary to the national defense program * *. The Secretary of War and the Secretary of the Navy are further authorized to use such rentals as may be collected from each housing project for the management and maintenance of the housing units therein, including utilities, roads, walks, and accessories, and to set up special reserve accounts for the amortization of the cost of the project:

*

The authorization in the above section 201 to use the rentals for specified purposes constitutes them appropriated funds and limits their use to the items specified therein. As said section 201 does not except such funds from the provisions of section 7 of the act of August 23, 1912—that is, does not specifically authorize the use of rentals for the installation of telephones in private quarters—it must

be held that what is proposed, to wit, the use of rentals for the installation of telephones in private residences, is not authorized.

(B-20140)

CONTRACTS-COST-PLUS-REPAIRS TO RENTED EQUIPMENT

Where, under rental agreements entered into by a cost-plus-a-fixed-fee contractor, "all routine maintenance and normal running repairs" are to be made by the lessee (prime contractor) without expense to the lessors and the expenses thereof were not included by the lessors in computing the rental rates, the prime contractor may be reimbursed by the Government for the cost of such repairs. 20 Comp. Gen. 632, where rental rates were considered normally to include an allowance for wear and tear incident to the use of the equipment, distinguished.

Comptroller General Warren to Lt. Col. H. M. Denning, United States Army, September 22, 1941:

There was received by indorsement from the Chief of Finance your letter of August 16, 1941, as follows:

1. The undersigned being a duly appointed disbursing officer of the Finance Department, and in receipt of the enclosed Bureau vouchers, #T 253 and #T 230, in the amounts of $387.06 and $245.21, respectively, pertaining to the account of Coleman Bros. Corp. and John Bowen Co. under contract W 6101 qm 148, for reimbursement of expenditures covering repairs and replacements to rented equipment; same are transmitted herewith for an advance decision as to the propriety of payment, as this office is in doubt as to whether the provisions of article II of the standard equipment Rental Agreement contains sufficient authority to justify payment of these accounts.

2. It will be noted that article II of the standard Equipment Rental Agreement applicable to Bureau voucher #T 253 reads as follows:

"All necessary minor or field repairs to equipment shall be made by the lessee without cost to the lessor. Other than minor or field repairs shall be made by the lessor without cost to the lessee."

whereas article II of the Standard Equipment Rental Agreement applicable to Bureau voucher #T 230 reads as follows:

"Equipment shall be maintained in good repair and working condition by the lessor without cost to the lessee. Routine maintenance and normal running

repairs by the lessee is approved."

In connection with the foregoing, reference has been made to your decision B-15593 dated April 14, 1941, and while it is appreciated that said decision considered the matter of loss or damage to rented equipment, yet that portion thereof which states:

"Such usual rental rates for equipment normally include not only a fair profit, but an allowance for wear and tear incident to the use of the equipment for the purpose rented and, under the settled rules of bailment law, a margin to compensate the owner for the risk of loss and damage except that resulting from the negligence of the bailee," appears to be in conflict with article II of the Standard Equipment Rental Agreements referred to above. With your letter the Chief of Finance transmitted a report by the contracting officer dated August 1, 1941, as follows:

1. Reference is made to original communications concerning reimbursement vouchers for parts and/or repairs to construction equipment rented at Fort Devens, Massachusetts, by Coleman Brothers Corp., and John Bowen Company, under the terms of Contract No. W 6101 qm-148.

2. Personal field investigation with regard to the repair of rented equipment under the above contract was made by the contracting officer. It has been determined that at the inception of the construction work at Fort Devens the Government representatives and the general contractor agreed that, due to

the wide-spread scale of operations and the emergency conditions under which the work was to be done, efficient operation could be accomplished only if the normal running repairs to equipment were handled on the site by the contractor's forces on a reimbursable basis. Moreover, when the equipment lessors were informed that their equipment was to be used 24 hours a day, seven days a week throughout the winter, they took the position that they would not be willing to rent the equipment under such conditions unless the making of routine running repairs was assumed by the lessee. Accordingly, it became the understanding between the various equipment lessors and the general contractor that the latter would assume all routine maintenance and normal running repairs without cost to the lessors.

3. The agreements referred to above were not reduced to writing at the time inasmuch as the standard contract form for equipment rental agreements was not received from Washington until several weeks after operations had begun. Article II of the Standard Equipment Rental Agreement, however, provided that: "Equipment shall be maintained in good repair and working condition by the lessor without cost to the lessee." In order to offset this provision, which obviously was contrary to the practice and intention of the parties, the following provision was added to article II of the contract prior to execution: "Routine maintenance and normal running repairs by the lessee is approved." It was the definite understanding of the general contractor and the equipment owners, as well as the Government representatives, that this added provision served to incorporate into the written contract and give effect to their original verbal agreement; i. e., that the general contractor as lessee was to make all routine and normal running repairs to the rented equipment.

4. It appears, therefore, that at no time during the period of operations was it the intention of the parties concerned that the lessors were to be responsible for these repairs. This statement is substantiated by the fact that during the entire contract period all such repairs were made by the general contractor at repair shops constructed by him for that specific purpose. With respect to vouchers covering reimbursement of cost of repairs made under those equipment rental agreements wherein article II has been amended as described above, the contracting officer finds that such expenses were incurred in accordance with the terms of the contract and are, therefore, reimbursable to the general contractor under article II, paragraph 1 (d) of the prime contract.

5. As the work on the project progressed, other rental agreements for equipment were entered into with additional parties, but in each instance, as in all previous cases, it was the clear intention of the parties that routine and normal running repairs were to be made by the lessee. However, it was subsequently discovered that in certain of the rental agreements, the added provisions referred to above which placed responsibility for repairs upon the lessee, was inadvertently omitted. It is evident this oversight was clearly a mistake and was contrary to the intention of the parties for, as stated above, the facts are that it was never contemplated that routine repairs were to be made by the lessors. Consequently, in those cases where the omission occurred, the contracting officer finds the expense of equipment repairs to be a reimbursable item of cost under article 11, paragraph 1 (p), of the construction contract.

6. In view of the above, the vouchers forwarded with the original communications are certified for payment.

7. A copy of the report of the constructing quartermaster at Fort Devens as to this matter is inclosed for your information.

Article II of the contract here involved provides, in pertinent part, as follows:

1. The contractor shall be reimbursed in the manner hereinafter described for such of his actual expenditures in the performance of the work as may be approved or ratified by the contracting officer and as are included in the following items:

(c) Rental actually paid by the contractor, at rates not to exceed those approved by the contracting officer, for construction plant in sound and workable condition, such as pumps, derricks, concrete mixers, boilers, clamshell or other buckets, electric motors, electric drills, electric hammers, electric hoists, mechan