second- and third-class post offices with a population under 100,000 (5 salary rates of 4 steps), and (2) from $1,200 to $1,380 per annum for laborers in first-class post offices over 100,000 population (4 salary rates of 3 steps). The first range corresponds with the five highest salary rates in grade CU-2 omitting the minimum rate of $1,080 per annum, and the second range corresponds with the four highest salary rates of grade CU-2 or the four lowest salary rates of grade CU-3. Some of the salary ranges administratively adopted do properly correspond with ranges prescribed by the Classification Act but no grade has been administratively designated. In decision of November 14, 1934, 14 Comp. Gen. 392, it was held (quoting from the syllabus) as follows: As the entire salary range prescribed by the Classification Act, as amended, for a particular grade, rather than one or any number of salary rates less than the total prescribed for the grade, attaches to any position, either field or departmental, placed or allocated in said grade, regardless of the class of position, there is no authority for administrative action prescribing a salary range for a certain class of position in the field service beginning at a rate higher than the minimum-salary rate of the range prescribed by the Classification Act, as amended, for the entire grade in which such position is properly placed or allocated. Also, in decision of November 27, 1934, 14 Comp. Gen. 420, it was held (quoting from the syllabus) as follows: The phrase "so far as may be practicable" appearing in section 3 of the Welch Act of May 28, 1928, 45 Stat. 785, and section 2 of the Brookhart Salary Act of July 3, 1930, 46 Stat. 1005, extending the principles of classification to the field service, only vests in an administrative office a discretion as to the particular grade or salary range prescribed by the Classification Act in which a field position is to be placed or allocated, and does not in any case authorize an administrative office to fix the salary rate of a field position without regard to the Classification Act. See also, 10 Comp. Gen. 20; 11 id. 177; 14 id. 763; 15 id. 154. The act of August 1, 1941, Public Law 200, 55 Stat. 613, which is an amendment to the Classification Act, clearly contemplates withingrade salary advancements through the entire salary range of the grades prescribed by the schedules appearing in the Classification Act upon meeting certain conditions. See section 2 of the statute. There is no authority in an administrative office to defeat the right of field employees under this statute by limiting the number of salary rates and steps in a field grade or salary range to less than those appearing in the schedules prescribed by the Classification Act. See section 1 (b) of the President's regulations, Executive Order No. 8882, dated September 3, 1941, issued under authority of section 2 (g) of the said statute. Upon the basis of the foregoing, it would appear that administrative action should be taken to place or allocate all of the positions in the Custodial Service of the Post Office Department in grades with salary ranges prescribed by the schedules appearing in the Classification Act, as amended, in order that the employees may be given the full benefits of the within-grade salary-advancement plan provided by the act of August 1, 1941. Section 7 of the Classification Act, as amended by section 2 of the act of August 1, 1941, Public Law 200, contains the following pertinent provisions: All employees compensated on a per annum basis, and occupying permanent positions within the scope of the compensation schedules fixed by this act, who have not attained the maximum rate of compensation for the grade in which their positions are respectively allocated, shall be advanced in compensation successively to the next higher rate within the grade at the beginning of the next quarter, following the completion of: (1) Each eighteen months of service if such employees are in grades in which the compensation increments are $60 or $100, or (2) each thirty months of service if such employees are in grades in which the compensation increments are $200 or $250, subject to the following conditions: (1) That no equivalent increase in compensation from any cause was received during such period, except increase made pursuant to subsection (f) of this section. The regulations of the President, Executive Order No. 8882, dated September 3, 1941, contain the following provisions: SECTION 1. In the administration of the said section 7, the following definitions of terms used therein shall apply: (d) "Equivalent increase in compensation" shall mean any increase or increases which in total are equal to or greater than the compensation increment in the lowest grade in which the employee has served during the time period of eighteen or thirty months, as the same may be. SECTION 2. In computing the periods of service required by the said section 7 for within-grade advancements there shall be credited to such service: (a) Continuous civilian employment in any branch, executive department, independent establishment, agency, or corporation of the Federal Government or in the municipal government of the District of Columbia. (b) Time elapsing on annual, sick, or other leave with pay. (c) Time elapsing in a nonpay status (including break in service) not exceeding thirty days within any one time period of eighteen or thirty months, as the case may be. (d) Service rendered prior to absence on furlough or leave without pay where such absence is in excess of thirty days but not exceeding one year. Referring to the question in the second paragraph of your letter, an increase in compensation resulting solely by reason of a transfer or reappointment of an employee from a part-time to a full-time position at the same rate of pay per hour does not constitute an "equivalent increase in compensation" within the meaning of section 7 (b) (1) of the statute or section 1 (d) of the President's regulations. In such a case there is an increase in the time worked but not necessarily in the rate of compensation paid. A comparison in such cases should be made between the per annum equivalent for full-time service of the part-time salary rate and the annual salary rate for the fulltime position to which the employee is transferred or reappointed. Charwomen and charmen of the Custodial Service of the Postal Service are expressly excluded from the provisions of the act of August 14, 1935, 49 Stat. 650, establishing a 40-hour work week for postal employees. See 16 Comp. Gen. 331. Fo more, that statute is not a pay statute. 15 Comp. Gen. 175; id. 299. While the hours of work and leave of absence of all custodial employees have been held to be controlled by the laws applicable to the Postal Service (15 Comp. Gen. 937; 19 id. 445), nevertheless the per diem rate of compensation of all part-time employees paid on an annual basis subject to the Classification Act is computed under the provisions of the act of June 30, 1906, 34 Stat. 763, on the basis of 1/360 of the annual rate for each day of service. It is proper, therefore, to compute the per annum equivalent of $0.50 per hour received by these charwomen and charmen on the basis of eight hours per day, or $4 per diem, which, multiplied by 360, makes a total of $1,440 per annum. This rate would be more than the minimum salary rate of either of the salary ranges adopted administratively for laborers in the Custodial Service. Accordingly, assuming that the employees mentioned in the second paragraph of your letter were promoted to the minimum salary rate of either range for laborers, viz, $1,140 or $1,200 per annum, on July 1, 1940, there was no equivalent increase in compensation within the meaning of the act of August 1, 1941, or the President's regulations thereunder. Section 2 of the President's regulations authorizes the counting of part-time service in a civilian position in computing the prescribed period of 18 or 30 months. See answer to the sixth question in decision of October 27, 1941, B-20925, 21 Comp. Gen. 369. There was considered in that decision a part-time position on the basis of one year. Here, there is for consideration service in a part-time position for part of each work day. The purpose and intent of section 2 (c) of the President's regulations above quoted appears to be that actual service, only, in a part-time position (part of each work day), rather than full-time service or the calendar month should be the basis for computing the prescribed period of 18 or 30 months. In the absence of any other rule prescribed by the law or the regulations, it may be determined that the actual service of five hours per day performed by these charwomen and charmen rendered prior to July 1, 1940, rather than full-time service or calendar month should be the basis for determining the prescribed period necessary to entitle them to promotion after transfer to a position the compensation of which is paid on an annual basis. The period these employees served as full time laborers prior to October 1, 1941, was 15 months, that is, from July 1, 1940, to September 30, 1941, inclusive. The service as charwomen and charmen on a part-time basis from July 1, 1939, to July 1, 1940, should be computed for this purpose as five-eighths of a year or 72 months, making a total of 222 months-more than 18 months' service these employees have served continuously in civilian employment since their appointments during which they have not received an equivalent increase in compensation. Accordingly, the employees referred to in the second paragraph of your letter were entitled to a within-grade salary advancement as of October 1, 1941, if they otherwise met the requirements of the statute. It is believed the answer to your first question answers also the question contained in the third paragraph of your letter. Employees paid on an annual basis occupying permanent positions within the scope of the compensation schedules fixed by the Classification Act who are employed on a part-time or when-actually-employed basis are entitled to the benefits of the act of August 1, 1941. Decision of October 27, 1941, B-20925, 21 Comp. Gen. 369. Accordingly, in such cases the prescribed period of 18 or 30 months should be computed on the basis of the actual time served rather than the calendar month. An employee working part time or on the basis of when actually employed must render 18 or 30 months (as the case may be) of actual service computed on the basis of full time per month the same class of employees must serve without having received an equivalent increase in compensation to become eligible for a within-grade salary advance ment. (B-22324) APPROPRIATIONS-OBLIGATION-LETTER OF INTENT TO CONTRACT FOLLOWED BY FORMAL CONTRACT IN SUBSEQUENT FISCAL YEAR A Government "letter of intent to contract" which reserved the option either to order certain articles, or to reimburse the company for costs incurred if the order was withheld, obligated the Government, at the time of its acceptance by the contractor, for reimbursement of the contractor's costs so incurred, and, as the agreement contemplated immediate action by the company, the fiscal year appropriation which became so obligated is available for the price of such articles even though the formal contract for their manufacture, which merged the Government's obligation under the first agreement, was not executed until the following fiscal year and the exact amount of the Government's liability was not known until that time. Comptroller General Warren to the Secretary of the Navy, December 15, 1941: I have your letter of December 2, 1941, as follows: In a letter of intent dated February 19, 1941, the Navy Department authorized Farrand Optical Company to acquire such equipment as might be necessary for the production of certain telescopes and to procure or produce such jigs, dies, tools, fixtures, and materials as might be necessary for the production of certain telescopes and packing cases. By a supplementary letter of intent dated June 20, 1911, the original letter of intent was modified to include certain periscopes. Copies of the above-mentioned letters are enclosed. On June 30, 1941, the Navy Department entered into a contract (No. NOS82348) with Farrand Optical Company for the telescopes covered by the original letter of intent. By a letter dated August 12, 1941, the time for the consummation of a contract for the periscopes was extended to October 15, 1941, and by a despatch dated October 15, 1941, the time was further extended to December 15, 1941. Copies of the letter and despatch are enclosed. By the supplementary letter of intent of June 20, 1941, work was authorized on the periscopes in anticipation of a formal contract as a charge to the appropriation 1710702, Ordnance and Ordnance Stores, Navy, 1941. Conditions arose which made it impracticable to consummate a formal contract for the periscones prior to the end of the fiscal year. However, funds were reserved from 310709 Ordnance and Ordnance Stores, Navy, 1941, for these periscopes and it is proposed to execute a formal contract for the periscopes on the basis of the supplementary letter of intent, as amended. Your advice is requested as to whether the supplementary letter of intent of June 20, 1941, may be recognized as setting up an obligation against the appropriation 1710702, Ordnance and Ordnance Stores, Navy, 1941, for the payment for the periscopes. The copy of the Department's letter of February 19, 1941, to the Farrand Optical Co., is as follows: This is to confirm the advice given you that it was anticipated that the Navy Department would place with you an order covering the manufacture of seven hundred fifty (750) telescopes Mark LX, each with packing case, at a total cost not to exceed $1,494,600.00, contingent upon the Government paying for, and taking title to, additional equipment at an estimated maximum cost of $225,000.00. This ordnance material and equipment to be purchased from funds appropriated and now available for use by the Navy or under authorization for the consummation of contracts. The telescopes are to be delivered, as follows: 10 by February 1, 1942. 10 by March 1, 1942. 15 by April 1, 1942. 30 by June 1, 1942. 50 by August 1, 1942, and continuing at the rate of 50 per month until completion. The Secretary of the Navy finds that in the interest of national defense, it is necessary that production be not delayed awaiting the placing of the aforesaid order. You are hereby authorized to acquire such additional equipment as may be necessary for the production of this material subject to the approval of the Chief of the Bureau of Ordnance, and to procure or produce such jigs, dies, tools, fixtures, and materials as are necessary for production of the telescopes and packing cases, in anticipation of the contract, subject to the receipt by the purchasing officer of notification of the items to be purchased or produced, with estimated maximum prices, and confirmation by the purchasing officer of authorization to proceed with such purchase or production. In the event that the order for this material is not placed with you prior to 15 April 1941, the Government will, upon demand made prior to 15 May 1941, reimburse you for the cost incurred by you and will assume your obligation for any commitment which you have made in this connection. Upon payment and assumption by the Government, title to such material and equipment, including rights under commitments assumed, will vest in the Government. You will agree in connection with the purchase of such materials and equipment as aforesaid that you will comply with all laws pertaining or relating to the purchase of such materials and equipment. All applicable contract clauses required by Federal Law to be incorporated in contracts for articles of the kind herein contracted for are hereby incorporated herein by reference. Your attention is invited to the national defense clause included in later contracts. If the foregoing is acceptable to you will you kindly so indicate on the enclosed three (3) copies of this letter and return to the purchasing officer on or prior to 10 March 1941, thereby constituting this letter a contract. A preference rating of A-1-b will be assigned to the equipment required for production of these telescopes, and preference ratings as follows to the telescopes: |