* *

settlements of the Claims Division in the matter except as to the item of $150 which was found to be due as additional liquidated damages in the settlement of May 5, 1936, and which was collected by set-off in the settlement of November 13, 1936. However, in your letter of June 23, 1939, protesting the collection of the item of $150 by set-off you specifically requested review of "* the actual facts surrounding these two claims." [Italics supplied.] Pursuant to such request the matter was reviewed by former Comptroller General Brown who, in a decision of September 15, 1939, to you, sustained the action theretofore taken collecting the additional amount as liquidated damages, which necessarily involved a determination that the previous disallowance of the claim for the amount of $2,800 withheld as liquidated damages was correct. Therefore, it appears that there was, prior to your letter of June 22, 1941, a final settlement of the matter by a former Comptroller General. Accordingly, as you were advised in my decision of August 19, 1941, the claim having been finally disposed of by my predecessor in office there is no authority to reverse or revise his action. See 16 Comp. Gen. 51, 118, and cases cited therein.

Furthermore, even if I had jurisdiction to consider the matter, I could not agree with your contention that because the liquidated damages provided for under the contract bears no reasonable relation to the actual damages which were incurred by the Government the provision is for a penalty and not liquidated damages.

Paragraph 2 of the specifications stipulated that shipments of the staples were to be made in accordance with the schedule contained therein, and that in the event of your failure to make shipments in accordance with such schedule, liquidated damages were to be charged at the rate of $50 per day until lost time was made up and shipments were resumed in accordance with the schedule. In other words, at the time the contract was executed it was agreed that the damages to the Government would be $50 per day if shipments were not made as provided and it cannot now be assumed that it was impossible for the Government to have sustained such damage because a part of the shipments only were delayed. The staples were to be used by the Government in connection with construction work and it is entirely possible that at the time the contract was executed the Government contemplated that delay in shipment of a part of the staples would result in the same damage as if all were delayed. However, be that as it may, it is well settled that a provision for liquidated damages is for enforcement according to its terms without the necessity of examining into the question of actual damages. See In re Outfitters Operating Realty Co., 69 F. (2d) 90, and cases cited therein. See, also, Frick Co. v. Rubel Corporation, 62 F. (2d) 765 (C. C. A. 2d),

holding that where a contract fixed liquidated damages for a breach, the district court properly excluded as immaterial certain evidence which had been offered to prove that the actual loss caused by the breach was infinitesimally small as compared with the stipulated liquidated damages, and properly directed a verdict for the amount of liquidated damages agreed upon in the contract, irrespective of the amount of actual damages.

(B-20061)

DEPARTMENTS AND ESTABLISHMENTS-SERVICES BETWEENAPPLICABLE OPEN-MARKET PURCHASE LIMITATION

Purchases from working funds advanced to the Coast and Geodetic Survey, Commerce Department, by the Army Air Corps, pursuant to the provisions of section 601 of the act of June 30, 1932, for carrying on a project for the Air Corps are subject to the exception to the advertising-for-bids requirement of section 3709, Revised Statutes, contained in the act of June 12, 1906, applicable to the Air Corps, rather than to the exception contained in the act of October 10, 1940, applicable to the Commerce Department.

Comptroller General Warren to the Secretary of Commerce, September 23, 1941: I have your letter of August 23, 1941, as follows:

The Coast and Geodetic Survey is engaged on a large chart construction project for the Army Air Corps consisting of the compilation, printing, and distribution of restricted aeronautical charts for the Western Hemisphere. For much of this region, outside of the United States and Alaska, there are at present no aeronautical charts suitable for safe navigation of airplanes. The entire cost of this project is being financed with working funds (Account No. 1325908) advanced from War Department Appropriation "2120705, Air Corps, Army, 1942" as shown in your "Accounts and Procedures Letter No. 2994" dated July 12, 1941.

Progress on this emergency project is being handicapped by the $25 limitation imposed on Department of Commerce purchases of supplies in open market. It appears from the wording of the law passed by the 76th Congress (Public, No. 842, 76th Congress, Chapter 851, 3d session, H. R. 10061) that appropriations made to the Departments of Commerce and Justice and to the Civil Service Commission are the only ones restricted to the amount of $25 for the purchase of supplies and equipment in the open market.

It would seem that working funds advanced from the War Department's appropriation to the Coast and Geodetic Survey for the aeronautical chart construction project would not be subject to this restriction and your decision on this point is respectfully requested.

The expense of the chart construction project on which the Coast and Geodetic Survey is engaged is to be paid from funds advanced to the Department of Commerce from the appropriation "Air Corps, Army, 1942," pursuant to the provisions of section 601 of the act of June 30, 1932, 47 Stat. 417, which provides in effect that a Government department, establishment, bureau, or office may place orders with any other department, establishment, etc., for materials, supplies, equipment, work, or services of any kind which the requisi

tioned agency may be in a position to supply or equipped to render, and shall pay either in advance or upon performance of the work, with provision for the establishment of special working funds in cases of advance payments.

The act of October 10, 1940, 54 Stat. 1109, to which you refer, is entitled "An act to consolidate certain exceptions to section 3709 of the Revised Statutes and to improve the United States Code," and provides in pertinent part:

That section 3709 of the Revised Statutes shall not be construed to apply to any purchases or services authorized by any appropriation act for the hereinafter enumerated departments and independent offices

(a) Where the aggregate amount involved does not exceed the sum of $25—

(2) The Department of Commerce

It is evident that the authority given in the above-quoted law is in the nature of an exception to the requirements of section 3709, Revised Statutes, and that if such exception does not apply to purchases or services for which payment is made from the working fund set up for this project, then section 3709 must be taken as applying to the procurement of all such supplies or services, unless there can be substituted another exception provided by law as applicable to the funds in question.

While the cited act of October 10, 1940, provides no exception to section 3709, Revised Statutes, as to purchases or services for the Army Air Corps, the act of June 12, 1906, 34 Stat. 258, 10 U. S. C. 1205, does provide that:

Hereafter the purchase of supplies and the procurement of services for all branches of the Army service may be made in open market, in the manner common among business men, when the aggregate of the amount required does not exceed $500; but every such purchase exceeding $100 shall be promptly reported to the Secretary of War for approval, under such regulations as he may prescribe.

The above-quoted provision, as well as a similar provision for the benefit of all branches of the naval services as contained in the act of March 2, 1907, 34 Stat. 1193, has been construed by the accounting officers of the Government as an exception to section 3709, Revised Statutes. See 17 Comp. Gen. 1066; 18 id. 677.

The funds advanced to the Department of Commerce in connection with the chart construction project for the Army Air Corps are to be expended under the supervision of the performing agency. However, such funds were in fact appropriated in an appropriation act for the War Department, and are being used by the Department of Commerce, under the authority of section 601 of the act of June 30, 1932, to carry on a project for the Army Air Corps which is one of the branches of the Army service covered by the act of June 12,

1906. Since such purchases or services procured from the working fund are in behalf of the Army Air Corps, it would appear that the authority conferred by the act of June 12, 1906, is applicable thereto. It should be noted, however, that said act requires the reporting to the Secretary of War for approval, under such regulations as he may prescribe, of any purchase in excess of $100. See Army Regulations 5-240. Accordingly, while open-market purchases not to exceed $100 may be made in the usual manner from such working funds by the Department of Commerce, any purchase in excess of $100, but not to exceed $500, will be subject to the approval of the Secretary of War either under existing regulations or such other regulations as he may prescribe.

(B-20490)

COMPENSATION-WITHIN-GRADE PROMOTIONS-PRESIDENTIAL APPOINTEES SUBSEQUENTLY ACQUIRING COMPETITIVE CLASSIFIED CIVIL SERVICE STATUS

Personnel of The National Archives whose original appointments were made by the President by and with the advice and consent of the Senate pursuant to section 2 of the National Archives Act, but who are now in the competitive Civil Service and whose salary rates are required to be fixed in accordance with the Classification Act of 1923, as amended, are entitled to the benefits of the act of August 1, 1941, providing a uniform within-grade salary-advancement plan for employees.

Comptroller General Warren to the Archivist of the United States, September 25, 1941:

I have your letter of September 12, 1941, as follows:

Your attention is invited to the question of the eligibility for promotion of certain officials of The National Archives under the uniform promotion system prescribed by Public Law 200, approved August 1, 1941.

Section 2 of The National Archives Act (48 Stat. 1122) reads:

"The salary of the Archivist shall be $10,000 annually. All persons to be employed in the National Archives Establishment shall be appointed by the Archivist solely with reference to their fitness for their particular duties and without regard to civil-service law; but any official or employee with salary of $5,000 or over shall be appointed by the President by and with the advice and consent of the Senate."

In accordance with this section, several persons were appointed to the staff of The National Archives by the President by and with the advice and consent of the Senate.

However, the Independent Offices Appropriation Act, 1939 (52 Stat. 421) included a provision as follows:

"Provided further, That six months after the date of approval of this Act. notwithstanding any provisions to the contrary in section 2 of The National Archives Act, approved June 19, 1934, and section 1 of the Federal Register Act, approved July 26, 1935, all persons employed in The National Archives establishment under section 2 of The National Archives Act and section 1 of the Federal Register Act shall be appointed by the Archivist in accordance with the civil service laws and the Classification Act of 1923, as amended: And Provided further, That all persons employed under section 2 of The National Archives Act and section 1 of the Federal Register Act in said establishment six months after the date of approval of this Act, regardless of the method by which they were appointed, who do not have a competitive classified civil

service status shall acquire such a status (1) upon recommendation by the Archivist and certification by him to the Civil Service Commission that such persons have rendered satisfactory service in said establishment for not less than six months and (2) upon passing such suitable noncompetitive tests as the Civil Service Commission shall prescribe."

By this provision all positions in The National Archives, except the position of Archivist of the United States, were placed in the classified civil service as of November 23, 1938. It also made eligible for a civil-service status persons who were originally appointed by the President, by and with the advice and consent of the Senate. When these persons were certified by the Archivist and passed the prescribed noncompetitive examinations, it would seem that they lost their status as Presidential appointees and became identified as civil-service employees.

However, the language of section 2 (h) of the uniform promotion act, Public Law 200, reads:

"The provisions of subsections (b) to (f), both inclusive, of this section shall not apply to the compensation of persons appointed by the President, by and with the advice and consent of the Senate."

Strictly speaking, the several officials of The National Archives referred to above were "persons appointed by the President, by and with the advice and consent of the Senate." But, on the other hand, it would appear that the intent of this provision was to preclude salary advances to those whose appointments are presently vested in the President, by and with the advice and consent of the Senate.

We felt that since a civil-service matter was indirectly involved, the Civil Service Commission should be contacted for its interpretation. The Commission's reply to our inquiry is attached herewith for your information.

Your opinion is requested on the question of whether persons mentioned above, who were originally "appointed by the President, by and with the advice and consent of the Senate," but who acquired a civil-service status in accordance with law, are eligible to receive administrative promotions under Public Law 200.

The letter to you from the United States Civil Service Commission is dated September 9, 1941, and reads as follows:

We have your letter of August 20, 1941, raising the question whether Publie Law No. 200, approved August 1, 1941, establishing a within-grade salary advancement plan under the Classification Act of 1923, is applicable to certain officials or employees of The National Archives who were originally appointed by the President by and with the advice and consent of the Senate and who subsequently acquired a civil-service status in accordance with the provisions of the Independent Offices Appropriation Act for 1939.

This question arises because of the fact that section 2 (h) of Public, No. 200 exempts from the operation of the salary advancement provisions "the compensation of persons appointed by the President by and with the advice and consent of the Senate."

The interpretation of statutes authorizing the expenditure of funds is a function of the General Accounting Office rather than the Civil Service Commission. Since a civil-service question is indirectly involved, we feel that we can offer you an informal interpretation with the understanding that it has no binding effect unless concurred in by the Comptroller General. You may wish to use this letter in presenting the matter to the Comptroller General for final decision.

It should be pointed out in the first instance that employees who are subject to section 2 of Public, No. 200 may receive salary increases within the grades to which their positions have been allocated only in accordance with and upon compliance with the conditions set forth therein. Persons who are not subject to this law under regulations which we understand the President will soon promulgate, may receive salary advancements without compliance with the requirements of Public, No. 200 but in accordance with any other applicable

statute.

The reason for the insertion of section 2 (h) in the law was the belief that under normal circumstances, Presidential appointees confirmed by the Senate did not have a sufficiently long tenure of office to reap the full benefits of the