BNUMBER: B-275669.2
DATE: July 30, 1997
TITLE: American Battle Monuments Commission-Contracting with, B-
275669.2, July 30, 1997
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Matter of:American Battle Monuments Commission-Contracting with
Donated Funds for World War II Armed Forces Memorial
File: B-275669.2
Date: July 30, 1997
DIGEST
Pub. L. No. 103-32 establishes a special fund in the Treasury to be
available to the American Battle Monuments Commission for establishing
World War II Memorial. The law also authorizes the Commission to
accept private donations for the memorial and requires that the
donations, along with other funds available for the memorial, be
deposited in and invested by the Treasury. All such funds are
considered appropriated funds. In contracting with these funds,
including the donated funds, the Commission is required to follow the
procedures prescribed by the Federal Property and Administrative
Procedures Act and the Federal Acquisition Regulation otherwise
applicable to federal contracting since neither Pub. L. No. 103-32 nor
its legislative history indicate an intention that the Commission be
exempt from such requirements. 68 Comp. Gen. 237 (1989), and
B-211149, Dec. 12, 1985, distinguished.
DECISION
This responds to a request from the Secretary of the American Battle
Monuments Commission asking whether the Commission must comply with
the Federal Property and Administrative Services Act (FPASA) and the
regulations implementing that statute when using donated funds to
support contracts for the construction of a World War II Memorial
pursuant to Pub. L. No. 103-32, 107 Stat. 90 (1993). As explained
below, the Commission is required to comply with the FPASA and the
implementing Federal Acquisition Regulation (FAR) in contracting for
the memorial with donated funds.
Background
Sections 1(b) and (c) of Pub. L. No. 103-32 require the Commission to
establish the World War II Memorial in compliance with 40 U.S.C. sec.
1001-1010, establishing standards for commemorative works in the
District of Columbia, and to provide for accessibility by and
accommodation for the physically handicapped. Section 3 of Pub. L.
No. 103-32 authorizes the Commission to solicit and accept private
contributions for the memorial. This law does not refer to the FPASA
or otherwise state the requirements applicable to Commission contracts
for the memorial.
The Commission recognizes that when a federal entity expends both
appropriated and donated funds to accomplish a statutory purpose, the
expenditures from both sources ordinarily are viewed as appropriated
fund expenditures subject to the statutes and regulations applicable
to such expenditures, such as the FPASA. 68 Comp. Gen. 237, 238
(1989). The Commission points out, however, that in 68 Comp.
Gen. 237, concerning the Christopher Columbus Quincentenary Jubilee
Commission, and B-211149, Dec. 12, 1985, concerning the Holocaust
Memorial Council, we concluded that the Columbus Commission and the
Holocaust Council did not have to follow the FPASA and the FAR when
financing their contracts with donated funds. The Commission asks
whether it must comply with the FPASA and the FAR when contracting
with funds donated under Pub. L. No. 103-32.
Analysis
The American Battle Monuments Commission, originally established in
1923, has various responsibilities related to the design,
construction, and maintenance of military cemeteries and memorials,
primarily outside the continental United States.[1] The Commission's
request concerns the additional responsibilities Congress more
recently assigned the Commission under Pub. L. No. 103-32 to establish
a World War II Memorial in the District of Columbia or its environs.
Section 3 of Pub. L. No. 103-32 provides that the Commission shall
solicit and accept private contributions for the memorial. Section 4
creates a fund in the Treasury available to the Commission for the
expenses of establishing the memorial. The private contributions, as
well as surcharges paid to the Commission for the memorial under the
World War II 50th Anniversary Commemorative Coins Act, are required to
be deposited in the fund. In addition, section 4 requires the
Secretary of the Treasury to invest any portion of the fund not
required to meet current expenses in interest bearing obligations of
the United States or obligations whose principal and interest are
guaranteed by the United States, and to credit to the fund the
interest on, and proceeds from the sale or redemption of such
obligations.[2]
The World War II 50th Anniversary Commemorative Coins Act, Pub. L. No.
102-414, 106 Stat. 2106 (1992), authorizes the Secretary of the
Treasury to mint and issue
commemorative coins, and sell such coins at prices intended to recover
the costs of issuing the coins plus a surcharge. The Act directs that
all amounts received from the sale of the commemorative coins be
deposited in the Treasury's Coinage Profit Fund, 31 U.S.C. sec. 5111(b),
and that the Secretary of the Treasury shall pay from that fund a
specified portion of the surcharges derived from the sales of the
coins to the American Battle Monuments Commission, to be used for the
expenses of the World War II Memorial. Funds payable from the Coinage
Profits Fund are considered appropriated funds. See 68 Comp. Gen. 583
(1989). See also, 57 Comp. Gen. 311 (1978), to the same effect
concerning commissary sales surcharges.
Funds available to agencies are considered appropriated funds,
regardless of their source, if they are made available for collection
and expenditure pursuant to specific statutory authority. As
discussed, the fund available for constructing the memorial consists
not just of donated funds, but also consists of the surcharges from
the coin sales transferred from the Coinage Profits Fund, and interest
on and proceeds from the obligations in which the Secretary of the
Treasury has invested funds not needed for current expenses. In a
case similar to this one, where (1) the agency had statutory authority
to accept donations for a specific purpose, (2) the donations were
required to be deposited in a special trust fund account in the
Treasury, and (3) the funds from that account were then available to
be disbursed for the designated purpose, the funds were considered to
be appropriated funds. The Liberty Consortium, B-215042, Apr. 12,
1985. In addition, as we recognized in the Columbus Commission and
Holocaust Memorial decisions cited by the Commission, when a federal
entity expends both appropriated and donated funds to accomplish a
statutory purpose, the expenditures from both sources generally are
viewed as appropriated fund expenditures subject to all statutes and
regulations governing such expenditures. 68 Comp. Gen. 237, supra;
and B-211149, Dec. 12, 1985, supra.
The procurement provisions of FPASA were established to "facilitate
the procurement of property and services." 41 U.S.C. sec. 251. Section
252 of Title 41 provides that "Executive agencies shall make purchases
and contracts for property and services in accordance with the
provisions" of subchapter IV and the implementing regulations.[3] In
implementing the procurement provisions of FPASA, the FAR applies to
all "acquisitions," except where expressly excluded, and it defines
acquisitions as "the acquiring by contract with appropriated funds of
supplies or services (including construction) by and for the use of
the Federal Government through purchase or lease . . . ." 48 C.F.R. sec.
1.104 and 12.101.
The Commission cites no specific provision of law as excluding it from
complying with the FPASA provisions in contracting for the World War
II Memorial. Rather, the Commission asks whether it may be exempt for
contracts funded by donated funds as was the Christopher Columbus
Quincentenary Jubilee Commission and the Holocaust Memorial Council.
As explained below, we believe that these two cases involved factors
that clearly distinguish them from this case.
With respect to the Columbus Quincentenary Jubilee Commission, the act
establishing the Columbus Commission explicitly provided that "Subject
to such rules and regulations as may be adopted by the Commission, the
Commission may . . . . procure supplies, services, and property;
make contracts; expend in furtherance of this act funds appropriated,
donated or received in pursuance of contracts hereunder." We found
nothing in the act nor its legislative history indicating that
Congress intended for the Columbus Commission's separate and
independent statutory authority to issue procurement rules and
regulations to be constrained by the requirements of the FPASA or the
FAR. 68 Comp. Gen. 237, 239. The legislation governing establishment
of the World War II Memorial has no such provision.
In the case of the Holocaust Memorial Council, we considered the
nature and purpose of the Council to be unique. Specifically, the
Council's governing statute provided for the Council to pay all
expenses related to constructing the Holocaust Museum with donated
funds and explicitly provided that the donated funds were not
appropriated funds. Further, the background and legislative history
associated with the act establishing the Council convinced us Congress
intended for the Council to be an entity significantly analogous to
the Smithsonian Institution. Consistent with that intent, we
concluded that, as in the case of the Smithsonian, the Council could
expend its donated funds in accordance with the directives of its
governing board, free of the strictures generally applicable to
government funds, including the procurement requirements in the FPASA
and the implementing FAR. B-211149, Dec. 12, 1985. In contrast,
neither Pub. L. No. 103-32 nor its legislative history indicates that
the Commission was to use donated funds for contracting under rules
and regulations different from those applicable to federal agencies
using appropriated funds.
The statute governing establishment of the World War II Memorial
differs from those governing the Columbus Commission and the Holocaust
Council in other important respects. The statutes establishing the
Columbus Commission and the Council did not require that their donated
funds be deposited in the Treasury, and the two entities were free to
invest their donated funds in non-Treasury, interest-bearing accounts.
This is not the case here. Pub. L. No. 103-32 requires that both
donated funds and other funds available to the Commission for
establishing the World War II Memorial be deposited in the special
fund in the Treasury created for this purpose.
In summary, the legislation governing the Commission's establishing of
the World War II Memorial does not contain the provisions found in the
legislation governing the Columbus Commission that authorized adoption
of procurement rules unconstrained by the FPASA and FAR. Also, unlike
the legislation and legislative history applicable to the Holocaust
Memorial Council, Pub. L. No. 103-32 and its legislative history does
not establish that the Commission was to be analogous to the
Smithsonian or otherwise have broad authority to expend its donated
funds free of the strictures generally applicable a federal agency's
use of government funds. In contrast, the specific statutory
provisions requiring that the donated and other funds available to the
Commission for the World War II Memorial be deposited in and invested
by the Treasury support the conclusion that Congress did not intend
that the Commission have the unconstrained authority available to the
Columbus Commission and the Holocaust Memorial Council.
Accordingly, under the current statutory provisions, the Commission
should comply with the requirements of the FPASA and its implementing
regulations in the FAR when contracting with either donated or other
funds available for the establishment of the World War II Memorial
pursuant to Pub. L. No. 103-32.
/s/Robert P. Murphy
for Comptroller General
of the United States
1. Act of March 3, 1923, ch. 283, 42 Stat. 1509, the current
provisions of which are now codified in 36 U.S.C. ch. 8.
2. Section 2 of Pub. L. No. 103-32 establishes an advisory board to
assist the Commission with promoting the memorial, encouraging private
donations, and advising on the site and design of the memorial. The
advisory board has no control over expenditure of the funds.
3. An "executive agency" for purposes of FPASA is "any executive
department or independent establishment in the executive branch of the
Government . . . . "40 U.S.C. sec. 472. Section 252(a) of Title 41
excludes from the application of subchapter IV, (1) the Department of
Defense, the Coast Guard, and the National Aeronautics and Space
Administration; or (2) "when this subchapter is made inapplicable
pursuant to section 474 of Title 40 or any other law. . . ." The
Commission falls within the definition of "executive agency" and is
not among the agencies statutorily excluded.