the procedure here proposed may well be prejudicial to the interests of the United States, in that it renders ambiguous and uncertain the responsibility for overpayments or erroneous payments which may be made, and eliminates, to a large extent, the possibility of recovery by the United States of any amount so paid from those parties who ordinarily would be charged with the responsibility for the correctness of disbursements made by the Government.

The contractor's invoices, rental rolls, bills, and pay rolls are to be approved for payment by the contractor by representatives of the Government who, so far as I am informed, are not bonded and who probably could not be held to accountability for errors in the absence of negligence or other dereliction of duty. See 15 Comp. Gen. 560; id. 962; compare 7 Comp. Gen. 264; id. 797. Despite this, however, once an invoice, pay roll, or other evidence of the contractor's cost had been approved by such representative and paid by the contractor, the certifying officer of the Government whose duty it is to certify to the facts giving rise to the obligation to pay is effectively foreclosed from inquiring into the nature of the payment, verifying its accuracy, or taking other steps to determine its validity, insofar as the contractor is concerned, for the latter may then rely on the contractual agreement for reimbursement to it for amounts paid on approval of the Government's representatives. It is evident, therefore, that the effect of the agreement is to limit the function of the certifying officer to a mere superficial check of invoices, etc., previously verified by War Department auditors.

Likewise, the disbursing officer normally is personally responsible, at least to the extent of determining that vouchers represent legal claims against the Government and for other matters apparent on record or of which he is chargeable with notice. Nevertheless the contract supplement purports to require that disbursing officers pay vouchers in reimbursement of expenditures of the cost-plus-a-fixed-fee contractor so approved in advance even though it may be plain that there has been an improper approval of an item, or that its amount has been miscalculated.

It is the evident intention of article IV-B of the original contract here involved that the contractor shall present to the contracting officer, for his certification and verification, satisfactory evidence of its expenditures, and not that the Government shall assume the burden and risk of preparing such data for, and prior to payment by, the contractor. In effect, the contractor becomes a quasi disbursing agent of the Government, paying bills at the direction of the Government's representatives, but without the attendant obligations and safeguards by which the Government has protected itself from abuse of such functions.

If the supplemental agreement of August 22, 1941, is put into operation, it would not appear that the contractor, the contracting officer, or the disbursing officer can be held responsible for improper or erroneous payments, and it would appear that the War Department's representatives who approve the accounting data can be so held only in exceptional cases. Whether recovery might be had from the contractor's vendor, employee, lessor, or other recipient of an overpayment from the contractor is by no means certain in view of their lack of privity of contract with the United States, but, in any event, the circuity and multiplicity of such actions, when considered with the probable difficulties involved in locating and collecting from the parties concerned, make dubious the practical value of any such remedy.

While the Secretary of War has been given broad general powers under the act of July 2, 1940, 54 Stat. 712, cited as authority for the contract in question, the broadest interpretation of said act does not appear to sanction, by implication or otherwise, an agreement undertaking to give a conclusive effect to an administrative preaudit of the contractor's obligations to its employees, vendors, subcontractors, lessors, or other persons engaged by it in the performance of the contract; and I am constrained to hold that such an agreement is beyond the scope of authority of the contracting officer.

Consequently, in the audit of vouchers covering reimbursement of expenditures of the contractor here involved, this office will proceed in the usual manner to hold the certifying officer or the disbursing officer, as the facts may require, responsible for erroneous or improper payments under the contracts, notwithstanding any approval of the supporting data by Government representatives prior to payment by the contractor; and, in proper cases, to collect such erroneous or improper payments from any sums which otherwise may accrue to the contractor's credit.

Likewise, it must be understood that any undertaking on the part of the contracting officer that final audit of the accounts relating to the contract for each calendar year shall be made by the Government not later than 6 months after the end of such year (par. 2, art. VI-E, of the contract, as stated in the supplement of August 22, 1941), cannot be construed or interpreted as limiting in any manner the time within which this office may exercise its statutory duty of auditing the accounts of the disbursing officer (31 U. S. C. 72), nor its right to require further evidence in support of vouchers when necessary (31 U. S. C. 74), since it is clearly beyond the power of the contracting officer so to circumscribe the functions of this office by contractual agreement. Compare 20 Comp. Gen. 664, 671.

(B-21629)

ENLISTMENT ALLOWANCE-NATIONAL GUARDSMAN ENLISTING IN

REGULAR ARMY

The enlistment allowance authorized in section 9 of the act of June 10, 1922, is not payable on an original enlistment in the Regular Army following completion of an enlistment in a reserve component of the Army of the United States, and, therefore, an enlisted man of the National Guard is not entitled to the said allowance for enlistment in the Regular Army following discharge from service under an enlistment in the National Guard, even though during the entire period of his National Guard enlistment the organization of which he was a member was in the service of the United States.

Assistant Comptroller General Elliott to Lt. Col. Ross H. Routh, United States Army, December 22, 1941:

There has been received by endorsement of November 3, 1941, your letter of October 10, 1941, transmitting for decision whether payment thereon is authorized a voucher in favor of Technical Sergeant Nathan I. Reiter, Jr., No. 20,841,524, for $50, representing enlistment allowance under section 9 of the act of June 10, 1922, 42 Stat. 629.

It appears that Reiter enlisted in Headquarters and Service Company, 120th Engineers, on September 17, 1940, for 1 year; was honorably discharged by expiration of term of service September 16, 1941, and enlisted in the Regular Army on September 17, 1941, for a period of 3 years. At the time of enlistment, September 17, 1940, the 120th Engineers, a National Guard organization, was in the actual service of the United States as part of the 45th Division, which was ordered therein by Executive Order No. 8530, effective September 16, 1940, under the provisions of Public Resolution No. 96, approved August 27, 1940, 54 Stat. 858, and the National Defense Act, as amended.

Section 1 of the National Defense Act, as amended by section 1 of the act of June 15, 1933, 48 Stat. 153, 10 U. S. C. 2, provides:

That the Army of the United States shall consist of the Regular Army, the National Guard of the United States, the National Guard while in the service of the United States, the Officers' Reserve Corps, the Organized Reserves, and the Enlisted Reserve Corps.

Section 58 of the National Defense Act, as amended by section 5 of the act of June 15, 1933, 48 Stat. 155, 32 U. S. C. 4-a, provides:

The National Guard of the United States is hereby established. It shall be a reserve component of the Army of the United States and shall consist of those federally recognized National Guard units, and organizations, and of the officers, warrant officers, and enlisted members of the National Guard of the several States, Territories, and the District of Columbia, who shall have been appointed, enlisted, and appointed, or enlisted, as the case may be, in the National Guard of the United States, as hereinafter provided, and of such other officers and warrant officers as may be appointed therein as provided in section 111 hereof: Provided, That the members of the National Guard of the United States shall not be in the active service of the United States, except when ordered thereto in accordance with law, and, in time of peace, they shall be administered, armed, uniformed, equipped, and trained in their status as the National Guard of the several States, Territories, and the District of Columbia, as provided in this Act:

Section 71 of the National Defense Act, as amended by section 9 of the act of June 15, 1933, 48 Stat. 157, 32 U. S. C. 4-b, provides:

(b) "National Guard of the United States” means a reserve component of the Army of the United States composed of those federally recognized units and organizations and persons duly appointed and commissioned in the active and inactive National Guard of the several States, Territories, and the District of Columbia, who have taken and subscribed to the oath of office prescribed in section 73 of this act, and who have been duly appointed by the President in the National Guard of the United States, as provided in this act, and of those officers and warrant officers appointed as prescribed in sections 75 and 111 of this act, and of those persons duly enlisted in the National Guard of the United States and of the several States, Territories, and the District of Columbia who have taken and subscribed to the oath of enlistment prescribed in section 70 of this act.

Men enlisting in the National Guard of the several States, Territories, and the District of Columbia, and in the National Guard of the United States, are required to sign an enlistment contract and subscribe to the oath prescribed in section 70 of the National Defense Act, as amended. 32 U. S. C. 123 (Supp.).

Section 2 of Public Resolution No. 96, approved August 27, 1940, 54 Stat. 859, provides:

All National Guard, Reserve, and retired personnel ordered into the active military service of the United States under the foregoing special authority, shall from the dates on which they are respectively required by such order to report for duty in such service, be subject to the respective laws and regulations relating to enlistments, reenlistments, employment, conduct, rights, and privileges, and discharge of such personnel in such service to the same extent in all particulars as if they had been ordered into such service under existing general statutory authorizations.

Section 111 of the National Defense Act, as amended, 32 U. S. C. 81, provides that the organization of National Guard units existing at the time of the order into active Federal service shall be maintained intact insofar as practicable and that enlisted men of the National Guard while in the service of the United States shall receive the pay and allowances provided by law for enlisted men of the reserve forces when ordered to active duty. This section provides further that upon being relieved from active duty in the military service of the United States all individuals and units shall thereupon revert to their National Guard status.

Section 9 of the act of June 10, 1922, 42 Stat. 629, provides, in pertinent part

On and after July 1, 1922, an enlistment allowance equal to $50, multiplied by the number of years served in the enlistment period from which he has last been discharged, shall be paid to every honorably discharged enlisted man of the first three grades who reenlists within a period of three months from the date of his discharge, and an enlistment allowance of $25, multiplied by the number of years served in the enlistment period from which he has last been discharged, shall be paid to every honorably discharged enlisted man of the other grades who reenlists within a period of three months from the date of his discharge.

The act of June 10, 1922, 42 Stat. 625, was entitled "An act to readjust the pay and allowances of the commissioned and enlisted personnel of the Army, Navy, Marine Corps, Coast Guard, Coast and Geodetic Survey, and Public Health Service." That act was primarily a law applicable to the Regular Army and the other services mentioned in its title and where reserve components of those services were contemplated they were specifically provided for as in sections 3 and 14 of the original act and section 20 as that section was amended by the act of July 2, 1926, 44 Stat. 782. The enlistment allowance authorized in section 9 of the act of June 10, 1922, is payable only upon a reenlistment following an enlistment in the regular service and is not payable on an original enlistment in the Regular Army following completion of an enlistment in a reserve component thereof. No question can arise in this respect where the National Guard organization is not in the actual service of the United States, and the only reason for the submission of the question is that in this case the entire one-year enlistment in the National Guard was while the organization was in the actual service of the United States. The provision for an enlistment allowance is an inducement for men to reenlist in the Regular Army from which honorably discharged and has no reference to service in the reserve components of such service. Members of the National Guard of the United States are in the active service of the United States only when ordered thereto in accordance with law and in time of peace they are administered, armed, uniformed, equipped, and trained in their status as National Guard of the several States, Territories, and the District of Columbia, as otherwise provided in the National Defense Act, as amended. Reiter's entry into the Regular Army, September 17, 1941, was not a reenlistment but was an original enlistment following discharge from service in the National Guard, and the fact, if it be a fact, that all of his service in the National Guard was while the organization of which he was a member was in the service of the United States does not constitute his enlistment in the Regular Army a reenlistment within the purpose and meaning of section 9 of the Joint Service Pay Act. You are not authorized to pay the voucher, which is retained in this office.

(B-21873)

BIDS-CONDITIONAL ACCEPTANCE SUBJECT TO EXECUTION OF FORMAL CONTRACT-STATUS AS BINDING CONTRACT

A "letter of intent" advising a bidder that its bid "is conditionally accepted subject to the execution of a formal contract by the Civil Aeronautics Administration" did not result in a binding agreement so as to obligate the Government, upon its failure to execute a formal contract, to reimburse the bidder for expenses incurred toward the manufacture of the involved articles, and