BNUMBER: B-270327
DATE: March 12, 1997
TITLE: Defense Reutilization and Marketing Service Awards
Ceremonies
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Matter of:Defense Reutilization and Marketing Service Awards
Ceremonies
File: B-270327
Date: March 12, 1997
DIGEST
Vouchers for luncheon expenses incurred by the Defense Reutilization
and Marketing Service (DRMS) for employees attending worldwide DRMS
awards ceremonies may be paid. We have approved the payment of
reasonable ceremonial expenses, including food, incurred in connection
with the presentation of awards under the Government Employees'
Incentive Awards Act. 65 Comp. Gen. 738 (1986). The $20 per employee
expense limitation set by DRMS in connection with presentation of the
awards is not inconsistent with the Incentive Awards Act or
implementing regulations.
DECISION
Mr. Richard F. Keevey, Director of the Defense Finance and Accounting
Service (DFAS), requests an advance decision regarding the propriety
of paying certain vouchers for the expenses of luncheons provided to
Defense Reutilization and Marketing Service (DRMS) employees attending
awards ceremonies recognizing the accomplishments of DRMS employees
around the world. For the reasons set forth below, DFAS may pay these
vouchers.
BACKGROUND
DRMS is a field activity of the Defense Logistics Agency (DLA), whose
primary mission is to redistribute or sell surplus personal property
generated by the Department of Defense. Prior to fiscal year 1994,
DRMS consumed substantially more funds than it generated. For
example, in fiscal year 1993, DRMS' expenditures exceeded its deposits
by $91.7 million. In an effort to reduce DRMS' operating cost, the
Department of Defense designated DRMS as a "Re-invention Laboratory"
with a charter to explore new and more business-like practices. For
fiscal year 1994, DRMS deposits exceeded its expenditures by $17
million, a swing of nearly $109 million.
In recognition of this performance, DRMS granted awards to each of its
employees, designated each Defense Reutilization and Marketing Office
(DRMO) as "DRMO of the Year," and authorized each DRMO to host
luncheons to recognize the accomplishments of its employees. The
December 7, 1994 message from the Commander of DRMS announcing the
"DRMS Celebration Day" states, in part, as follows:
"Since every person on the world-wide DRMS team deserves
recognition for these spectacular achievements, 13 January 1995
has been formally designated as 'DRMS Celebration Day.' On that
date, DRMS will host luncheons for all its employees around the
world and will provide each employee a specially designed 'Bucks
Bunny' and 'Reut Rabbit' t-shirt. Upon conclusion of these
luncheons, I want each of you to enjoy a well deserved four hours
of administrative leave."
In addition to the luncheon, tee-shirts, and leave, DRMS paid out over
$4.1 million in monetary awards agencywide. Nearly all of DRMS'
employees received a monetary award.
A December 9, 1994 DRMS message provided guidance for the January 13,
1995 "Awards Recognition Ceremony." The message, which cited our
decision at 65 Comp. Gen. 738 (1986), authorized each DRMS location to
spend up to $20 per person for accommodations and "incidental
refreshments" in connection with the award ceremonies.
DFAS described the vouchers submitted to it by DRMS as follows:
"In almost all cases, the vouchers are annotated as being for
refreshments incident to an awards ceremony. The vouchers
generally contain no information concerning the awards ceremony.
The receipts supporting the vouchers, however, typically reflect
the fact that groups of DRMS employees went to a local
restaurant, hotel, or other party establishment for the luncheon
that was described by the DRMS Commander in his December letter.
In one case, the voucher and supporting receipts is for a
luncheon cruise for 135 employees. In another case, DRMS entered
into a contract with a Golf Club to host the luncheon for all the
employees of the DRMS headquarters."
DRMS takes the position that the luncheon expenditures were
appropriate "incidental expenditures" to the presentation of awards,
and as such are authorized by the Government Employees' Incentive
Awards Act (GEIAA or the Act), 5 U.S.C. sec. 4501-4507 (1994). In its
submission to us, DFAS notes that "what constitutes refreshments has
not been clearly defined." Accordingly, DFAS asks whether it may
consider "payment of full meals for every employee of the agency . . .
as a necessary expense under the Incentive Awards Act if done in
conjunction with the presentation of monetary and nonmonetary awards
recognition to all the employees of the agency."
DISCUSSION
The GEIAA authorizes an agency head to pay a cash award or grant time
off to an employee who "by his suggestion, invention, superior
accomplishment, or other personal effort contributes to the
efficiency, economy, or other improvement of government operations or
achieves a significant reduction in paperwork," or "performs a special
act or service in the public interest in connection with or related to
his official employment." 5 U.S.C. sec. 4503. The Act authorizes an
agency to use its operating appropriations to cover the "necessary
expense for the honorary recognition of" the employee or employees
receiving the awards. Id. The Act directs the Office of Personnel
Management to prescribe regulations and instructions to govern agency
awards programs. 5 U.S.C. sec. 4506.
The provision of food or refreshments at an awards ceremony is an
exception to the general rule prohibiting an agency from feeding its
employees at taxpayer expense. 65 Comp. Gen. 738 (1986) (buffet
luncheon incident to Social Security Administration (SSA) annual
awards ceremony). As noted in 65 Comp. Gen. 738, the prohibition is
premised on the notion that since "[f]eeding oneself is a personal
expense," statutory authority is needed to utilize appropriated funds
to provide food to employees at their permanent duty station. Id. at
739. We have interpreted the authority in the GEIAA to incur expenses
necessary to honor the awardees to include refreshments where the
agency determines that a reception with refreshments would materially
enhance the effectiveness of its awards ceremony. 5 U.S.C. sec. 4503; 66
Comp. Gen. 536 (1987) (reception honoring an IRS employee's
promotion); 65 Comp. Gen. 738 (1986) (buffet luncheon incident to SSA
annual awards ceremony); and B-167835, Nov. 18, 1969 (awards banquet
honoring Apollo 11 astronauts).
OPM's regulations issued to implement the Act, 5 C.F.R. Part 451,
purposely leave it up to the agencies to design their award programs
and make their own award decisions. In its supplementary information
accompanying the latest revision to its awards regulations, OPM
characterized the rules presently in effect as providing "a few basic
requirements with which agencies can design award programs to meet
their individual cultures and needs." 60 Federal Register 5544
(January 27, 1995). For purposes of our role in investigating and
settling the use of appropriated funds, we must respect and defer to
OPM's regulatory decisions and the implicit delegation of authority to
agencies to make implementing decisions vis-a-vis their incentive
awards programs so long as such decisions are consistent with the
essential requirements of the Act.
With the foregoing context in mind, the issue is whether DRMS has
exceeded the authority Congress has provided agencies in the GEIAA.
Although the employee coverage provided in connection with the "DRMS
Celebration Day" is broader than we have typically encountered in our
prior decisions, unless arbitrary and capricious, differences in
degree do not invalidate the decisions made.
With respect to the payment of meals for every employee in connection
with the presentation of awards recognition to all DRMS employees, the
record indicates that the actual practice of DRMS installations
varied. The sites of the luncheons covered the entire spectrum. Some
of the smaller installations purchased sandwiches from local
delicatessens and held the award ceremony at DRMS installations.
Others held the awards ceremony at non-federal locations. One
installation contracted for a luncheon cruise. Regardless of the
location, there is no evidence that any of the awards ceremonies
exceeded the $20 per person authorized by the commander of DRMS.
Agencies have reasonable discretion to decide how to spend their
operating appropriations to satisfy their statutory duties, B-235163,
B-235163.11, February 13, 1996, including how to conduct their awards
programs. Cf. 66 Comp. Gen. 536, 537 (1987). In the context of the
Act, determining whether an expense is a "necessary" one requires
measurement "not by reference to an expenditure in a vacuum, but by
assessing the relationship of the expenditure to the specific
appropriation to be charged." 65 Comp. Gen. at 740. For example,
when President Nixon awarded the Medal of Freedom to the three Apollo
11 astronauts, the National Aeronautics and Space Administration
charged its Research and Program Management appropriation for $60,000
to cover its share of the cost of the banquet. In commenting on
NASA's discretion to use appropriated funds for an awards ceremony
under the Act, we observed that the "act does not establish a dollar
limitation nor does the legislative history indicate that such a
limitation was considered." B-167835, Nov. 18, 1969. In this case,
we cannot say that the $20 per person maximum set in the December 9,
1994 DRMS message is inconsistent either with the dollar value of
expenditures or the type of ceremonial expenses previously considered
by this Office. Nor does it offend any OPM regulatory guidance or
express provisions of the Act. Accordingly, the vouchers submitted to
DFAS may be paid.
/s/Robert P. Murphy
for Comptroller General
of the United States