64 defines the kinds of sewers and connections referred to in the ordinance.

Section 64.12 (a) provides:

No person shall make, construct, alter, or repair any house connection sewer, bonded house connection sewer, special house connection sewer, industrial waste sewer connection, industrial waste storm drain connection, storm drain connection, or special drainage connection, or any portion of any such sewer or storm drain connections, including sampling manholes, or connect any house sewer, soil pipe, or plumbing to any such sewer or storm drain connections or to a sewer or storm drain under the jurisdiction of the City of Los Angeles, without first obtaining a written permit therefor from the Board of Public Works.

Section 64.15(c) is as follows:

In the case of a house connection to a bonded sewer, a special house connection sewer, an industrial waste storm drain connection, an industrial waste sewer connection, or a special drainage connection, all as referred to in Sections 64.00, 64.30 and 94.51 of this Code, the permit fee shall be $18.00. No special or bonded sewer house connection permit will be issued until the provisions of Section 64.18 have been complied with.

Section 64.16.1 (a) reads as follows:

Before granting a permit to connect any lot or parcel not already connected to a public sewer or house connection sewer pursuant to the provisions of Sec. 64.12, except applications filed by a department of this City, the Board shall require, in addition to all other charges and fees imposed by Sec. 64.12 to Sec. 64.22, inclusive, the payment by the applicant therefor of a fee for a connection charge for outlet facilities of an amount equal to $400 per acre of the property to be served, unless:

1. The property had previously paid an outlet or off-site sewer charge either in money or by the construction of said outlet or off-site sewers; or

[Amended by Ordinance No. 110,308]

2. The property is serviced by a sewer constructed under an Assessment Act proceeding, the ordinance of intention for which was adopted prior to September 19, 1957.

3. The property participated in the cost of the sewer constructed by permit for which the construction permit had been issued prior to the effective date of this section.

Section 64.18 (a) is as follows:

Persons desiring a permit to connect to or construct a Special House Connection Sewer or Bonded Sewer House Connection Sewer shall make a written application to the Board, giving such information as the Board may require. The Board may issue a permit to make such sewer connection upon payment of the fees provided in Section 64.15 of this Code, and in addition thereto there shall be a charge payable to the Board of an amount equal to $5.00 per front foot of the lot sought to be connected, if said lot is rectangular and has an ordinary area of approximately 6500 square feet.

Section 64.19.1(a) provides:

Notwithstanding any other provisions of this Code, all moneys collected pursuant to Sections 64.11.2, 64.15, 64.16.1 and 64.18, referred to in subsection (d) of Section 64.18, shall be deposited in the Private Sewer Construction Account in the Board of Public Works Trust Fund.

It is indicated in your letter and its enclosures that payment of the three charges totaling approximately $1,726 under the abovequoted provisions of the ordinance is demanded by the City of Los Angeles. The questions for consideration are stated in your

as follows:

letter

*** (1) whether under the terms of the contract and the ordinance provisions set out above the contractor is required to pay for the three charges mentioned which would approximate $1,726 (which the contractor contends he is not required to pay, particularly in view of the small amount of the entire contract involved and coupled with the fact that such a requirement on the part of the contractor would appear to be unconscionable), or (2) if not, is the General Services Administration authorized to pay such charges from appropriated funds, even though these charges are called "fees", "permits" and "connection" charges but are subsequently used for sewerage construction funds.

It is noted that the various fees and charges fixed by the abovequoted provisions of the ordinance relate to various kinds of sewers and connections. The record here available does not show satisfactorily whether the sewers and connections involved in this matter are in fact such as to make all three charges applicable and require their payment. For example, it is noted that Section 64.18 (a) of the ordinance relates only to "a Special House Connection Sewer or Bonded Sewer House Connection Sewer." It is suggested, therefore, that the question of the applicability of the various charges be carefully considered and determined, if not heretofore done.

While the Government may not be subjected to or required to pay a special assessment or tax sought to be levied against it, it has been held that in the case of the connection of a new Government building with a municipally constructed and owned sewer a charge made by the municipality for the pro rata cost of the construction of the sewer, the Government authorities being advised before the connection was made that there would be such a charge, was a charge for the privilege of connecting the building with the sewer and, as such, was a proper charge against the United States. 9 Comp. Gen. 41; 19 id. 778. The principle of those decisions appears applicable in the instant matter, whether it involves new construction or remodeling or improvement of buildings or other structures, since it involves a connection or connections with a municipally owned sewer. The fact that the amount of the charges is required by the ordinance to be deposited in a sewer construction account does not require any different conclusion. In most instances, charges for sewer connections presumably are used for cost of construction.

The above-quoted provision of the contract requiring the contractor to pay "all fees and charges for connections to outside services and for use of property outside the site" appears clearly to bind the contractor to pay all of the fees and charges in question, no other interpretation of the language appearing reasonable or permissible.

A written agreement not conforming to the actual intention of the parties may be reformed to accord with such intention. Where, by reason of mutual mistake, a contract as reduced to writing does not reflect the actual agreement of the parties, the written instrument may be reformed if it can be established what the agreement actually was. See 36 Comp. Gen. 507, 509; 20 id. 533 and cases there cited.

On the record now before us, there is not perceived any sufficient basis for reformation of the contract involved in this matter. However, if you believe that such a basis may exist, the matter will be given further consideration upon submission by you of such further information as deemed pertinent.

As requested, the enclosures submitted with your letter are returned herewith.

[B-140581]

Military Personnel-Retired-Contracting with the Government-Construction Contracts

Although the terms "supplies" and "materials" ordinarily may be construed as having reference to tangible personal property, to construe the term "naval supplies or war materials" in the prohibition in 10 U.S.C. 6112(b) against retired officers of the Regular Navy or the Regular Marine Corps receiving payment from the United States while engaged in selling, or contracting or negotiating to sell, naval supplies or war materials to the Department of the Navy, as including only personal property, would create a disparity and frustrate the purposes of the prohibition in every case involving other kinds of property; therefore, sales activities of a retired Regular Navy officer in connection with contracts for constructing airport improvements come within the prohibition in 10 U.S.C. 6112(b) and he is precluded from receiving retired pay from the Navy. To the Secretary of the Navy, November 9, 1959:

By letter dated August 24, 1959, Department of Defense Military Pay and Allowance Committee submission No. 450, the Under Secretary of the Navy requested our decision as to whether, in the circumstances presented, the provisions of 10 U.S.C. 6112(b) prohibit the payment of retired pay to Rear Admiral Carl H. Cotter, CEC, U.S. Navy, retired.

It appears that Rear Admiral Cotter retired from the Navy in March 1947 and that he is president of the Capitol Construction Company, Inc., a corporation chartered under the laws of Puerto Rico on August 9, 1950. This concern entered into two construction contracts with the Navy, contract No. NBy-1414 dated May 7, 1956, and contract No. NBy-1480 dated April 26, 1957, for the extension and reinforcement of existing runways and new taxiways and for various airport development projects at the U.S. Naval Station, Roosevelt Roads, Puerto Rico. These contracts contain agreements to furnish all labor, equipment, and materials in connection with constructing the airfield improvements.

Rear Admiral Cotter signed contract NBy-1414 for the Capitol Construction Company, as president of the concern, and it is reported that he signed the proposal submitted by the company which resulted in the contract. Also, he accepted change orders C and D to this contract effecting, respectively, a decrease and an increase in the amount of the work to be performed. It is reported, however, that

contract changes are priced by a Board on Changes, usually consisting of a contractor representative and two Government representatives, and that he did not take part in the negotiations before this board.

Contract NBy-1480 was signed by another official of the Capitol Construction Company. It is reported, however, that the proposal which resulted in this contract was signed "C. H. Cotter," as president.

An examination of the Statement and Certificate of Award attached to each of these contracts shows that the award was made in each case to the lowest bidder as to price after extensive circularization among contractors, and other forms of advertising. Eight bids were received in the case of contract NBy-1414 and 4 bids were received in the case of contract NBy-1480.

Section 6112 of Title 10 of the United States Code provides:

(a) An officer of the Regular Navy or the Regular Marine Corps, other than a retired officer, may not be employed by any person furnishing naval supplies or war materials to the United States. If such an officer is so employed, he is not entitled to any payment from the United States during that employment. (b) If a retired officer of the Regular Navy or the Regular Marine Corps is engaged for himself or others in selling, or contracting or negotiating to sell, naval supplies or war materials to the Department of the Navy, he is not entitled to any payment from the United States while he is so engaged.

In his letter of August 24, 1959, the Under Secretary of the Navy states that the Judge Advocate General of the Navy has indicated that the term, "selling, or contracting or negotiating to sell," contained in the statute, includes virtually all activities surrounding the selling process, and that the signing of a Government contract by the president of a corporation, although that is his only relationship to a particular transaction, is considered to be contracting for sale under 10 U.S.C. 6112(b), citing JAG:II:2:JAC:sh of August 13, 1956. In line with such views, we held in decision of January 6, 1959, 38 Comp. Gen. 470, that any activities calculated to induce the purchase of naval supplies and war materials must be viewed as coming within the scope of 10 U.S.C. 6112(b) and that the term, "naval supplies or war materials," has reference to any article of tangible personal property. But for the fact, therefore, that the contracts here involved are contracts for public works and improvements, it would be quite clear that Admiral Cotter's activities with respect to such contracts would subject him to the prohibition of the statute.

Section 6112 of Title 10 had its inception in a proviso contained in the Naval Appropriation Act for the fiscal year 1897, approved June 10, 1896 (29 Stat. 361). Such proviso made it unlawful for officers of the Navy and Marine Corps, either active or retired, to be in the employ of persons or commercial firms furnishing naval supplies or war materials to the Government.

We understand that the 1896 act was enacted because two retired naval officers receiving retired pay from the United States were employed by certain firms selling armor plate to the Government at prices considered excessive. In order to accept a position with one of the suppliers and at the same time receive pay from the Navy, one of the officers was retired at his own request because of alleged color blindness. It was argued that officers who acquire valuable knowledge through services in the Navy Department should not be permitted to leave the Government in order to sell the knowledge acquired at Government expense to those who contract with the Government; that if such a practice were permitted some of the Government's most valuable officers would probably seek retirement so they could enter the employ of private firms and at the same time remain on the Government payroll, and that "no man should serve two masters," etc.

The proviso was revised by section 9 of the act of July 22, 1935, 49 Stat. 490, to make unlawful only the specified employment of officers on the active list and to permit retired officers to engage in such private employment with the provision, however, that no payment should be made from appropriations made by Congress to retired officers engaged in selling any naval supplies or war materials to the Navy or the Navy Department. Section 6112 of Title 10 of the Code is a codified version of section 9 of the 1935 act.

The statute has been classified as one of the group of so-called conflict-of-interest statutes. The essential purposes of such statutes are to safeguard the integrity of public administration and to prevent Government officials from using their positions and influence for personal gain. We believe Congress intended such statutes to apply in any case reasonably within the scope of the statutes where the mischief at which they are aimed could arise.

Congress, it is true, by using the term, "naval supplies or war materials,” in 10 U.S.C. 6112, did not cast the statute in terms having clear literal application to the situation here involved-sales activities relating to public buildings and works. In 82 C.J.S. Statutes, section 325 (page 617 et seq.), however, it is stated that:

Effect will be given the real intention even though contrary to the letter of the law. The rule of construction according to the spirit of the law is especially applicable where adherence to the letter would result in absurdity or injustice, or where adherence to the letter of the law would lead to contradictions** In following this rule words may be modified or rejected and

others substituted *

See, also, 82 C.J.S. Statutes, section 323 (page 607) and Sutherland on Statutory Construction, section 4925.

While it may be that section 6112(b) has some aspects of a penal statute, even penal statutes are not required to be construed in such a way as to defeat, in whole or in part, their manifest purpose. To bor