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B-203452 1 (1981-12-31)

handle is hein.gao/gaobadcbj0001 and id is 1 raw text is: i THE COMPTROLLER GENERAL DECISION . OF THE UNITED STATES S WAS~tNGTON. 0. C. 20548 FILE: B-203452. DATE: December 31, 1951 MATTER CF: Federal Aviation Agency--Disallowance of Indirect Grant Costs DIGEST: 1. Since FMC 74-4 (now OMB Circular No. A-87) is management tool that does not have the * force of law, San Diego County may not rely on this circular when challenging disallow- ance by FAA of. indirect costs in Airport Development Aid Program. 2. Secretary of Transportation has authority under 49 U.S.C. S 1720(a) to decide that Indirect costs are not necessary airport development project costs and later change this policy without changing the result retroactively for indirect costs incurred prior to changed policy. The Acting Auditor and Controller of the County of San Diego, California (the County), has submitted a claim to this office for indirect costs incurred in carrying out approved Airport Develzarent Aid Program (AD?) activities under grants from the Federal Aiation Agency (FAA) made prior to September 20, 1979. We deny this claim for the reasons given below. The controversy in this case concerns a change in FAA policy that resulted in the revision of FAA's regulation in September 1979 to permit indirect costs to be charged to ADAP grants, kAndxmat 14 C.F.R. S 152.47pEnd Appendix J of Part 152, 44 Fed. Reg. 54467-9, September 20, 1979. Prior to this change FAA's regulations provided that indirect costs were not allowable. 14 C.F.R. S 152.47(c)(6)46rd Appendix J- 1979). The changed policy did nct permit retroactive al- lowance of the previously disallowable indirect costs. See bacxgrcund statement accompanying the amended regulations, 44 Fed. Reg. at 54468, id. The County contends that the indirect costs were all--ble even before the Septeinber 1979 change in regulations. The County asserts that Federal Manacement Circular (FMC) 74-4 (now Office of Mana-ement and Budget (CM'B) Circular A-87,4ranuary 15, 1981), having the force of law, recuired FA to provide for indirect costs in its grants. The County in effect contends that the changed policy is an acmissoon by FAA that its earlier interpretation of law was wrong and that FAA should therefore be required to apply this revised view retroactively.

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