GENERAL HEADQUARTERS
SUPREME COMMANDER FOR THE ALLIED POWERS

APO 500
2 November 1950

AG400.12 (2 Nov 50) COM/B
(SCAPIN - 2129)

MEMORANDUM FOR	JAPANESE GOVERNMENT.
SUBJECT	Policies for Procurement with Termination of War (works) Funds.

1. Supreme Commander for the Allied Powers Memorandum for the Japanese Government, AG 400.12 (26 Jun 50) COM - B, SCAPIN 2104, Subject: Control of Obligations and Expenditures of Funds Appropriated for Requirements of the Occupation Forces, 26 June 1950, is hereby rescinded, The provisions of this SCAPIN do not constitute a change in policy contained in the former SCAPIN but provide a clarification of policy governing current procedure.
2. The Commanding General, Japan Logistical Command, is the sole procuring agency for the Occupation Forces. He will establish procurement procedures and forms and will issue necessary implementing instructions thereon. Personnel other than procurement officers appointed by the Commanding General, Japan Logistical Comand, are not authorized to procure or to negotiate for procurement for the Occupation Forces.
3. The Japanese Government will designate a single agency to effect procurement of supplies, construction, real estate and services, except Occupation railway services, signal communications facilities and requisitioned labor, for the Occupation Forces. The establishment and operation of that agency will be supervised by the Commanding General, Japan Logistical Command.
4. Procurement will be initiated and effected only on the basis of procurement instruments issued by the Commanding General, Japan Logistical Command.
a. The selection of contractors is normally a responsibility of the Japanese Government, Specific designation of contractors by the Occupation Force is authorized only when approved by the Commanding General, Japan Logistical Command.
b. Types of contracts to be used will be as directed by the Commanding General, Japan Logistical Command. Whenever the requirements under a procurement instilment can be stated specifically in terms of end items and/or end services to be procured at a specified unit of measurement, the bid which is accepted will be recognized as the official price for the item or service.
5. In addition to the procurement instruments referred to in paragraph 4, a Miscellaneous Expenditure Voucher, SCAP Form 20, Inclosure 1, is authorized for the following uses:
a. To control those expenditures required by Japanese law in connection with the labor for requirements not covered by procurement instruments, such as:
(1) Japanese Government’s share of premium payments for health insurance, Seaman’s insurance, unemployment insurance and for welfare pension insurance covering indigenous employees for the Occupation Forces.
(2) Injury and/or death allowances under workman’s accident compensation in excess of 90 days’ regular pay by unit pay rolls as authorized by the Special Procurement Agency regulation.
(3) Retirement allowance.
6. In addition to the procurement instruments referred to in paragraphs 4 and 5, a Reimbursement Voucher, SCAP Form 14, Inclosure 2, is authorized for payment in the amount specified for authorized travel of indigenous employees for the Occupation Forces when properly certified by a fiscal or obligating officer of the Occupation Forces. Payments will be reported on the Schedule of Disbursements (for miscellaneous expenditures), Inclosure 3.
7. Receiving officers will furnish the contractor a formal receipt executed in accordance with procedures established by the Commanding General, Japan Logistical Command, for supplies, services, construction and real estate furnished or rendered. Payment from Termination of War (Works) funds is authorized when based upon such receipts.
a. Receipts will be certified by an Occupation Forces obligating or fiscal station officer as to the sufficiency of funds in the accounting classification to be charged. No payment will be made in excess of the amount thus certified to be available.
b. Disbursing officers will be furnished signature cards for those Occupation Forces personnel authorized to cortify funds. Disbursing officers will maintain a file of signature cards and verify the signature appearing on the receipt before making payment.
c. Disbursing officers will verify the amount certified on the receipt with the vendor’s invoice and the contract, and will pay that amount which is the lowest of the three instruments.
d. Payment will be made upon verification of the request for payment so as to avoid the payments of interest under Japanese Public Law No. 256 for 1949.
e. Disbursing officers will furnish the Indigenous Reconciliation Unit, Office of Comptrollor, General Headquarters, Supreme Commander for the Allied Powers, a Schedule of Disbursements (for personal services), Inclosure 3, a Schedule of Disbursements (for procurement vouchers), Inclosure 3, and a Schedule of Disbursements (for miscellaneous expenditures), Inclosure 3, immediately after the close of business on the day on which such disbursements occur. Entries for communications services will be shown on the Schedule of Disbursements (for procurement vouchers), Inclosure 3. All disbursements made on Miscellaneous Expenditure Voucher, SCAP AGO Form 20, will be entered on the Schedule of Disbursements (for miscellaneous expenditures).
f. The Japanese Government will furnish the Supreme Commander for the Allied Powers a list of the names and locations of the various disbursing officers making disbursements of Termination of War funds for the purpose of establishing a disbursing officers’ station list. Changes in locations, deletions or additions to the original list shall be reported as they occur.
g. Advance payment to contractors, not to exceed 30% of the contract price, may be made upon approval of the Commanding General, Japan Logistical Command. Such payments are authorized upon presentation of a formal receipt certified as to sufficiency of funds as set forth above.
8. Supplies, materials, equipment and real estate furnished the Occupation Forces upon a procurement instrument will be released to the Japanese Government agency directed in paragraph 3 when they become excess to the needs of the Occupation Forces.
9. In all cases of deviation from the above procedures, immediate report will be rendered to the Supreme Commander for the Allied Powers. A full report, listing all pertinent details, will be rendered as soon as the facts are available. A copy of each report will be rendered to the Commanding General, Japan Logistical Command.
10. The Comptroller, General Headquarters, Supreme Commander for the Allied Powers, and authorized representatives of the Commanding General, Japan Logistical Command, will make periodic examinations of Japanese Government expenditures from funds appropriated for the support of the Occupation Forces to insure compliance with the provisions of this memorandum.
11. Directives issued by the Supreme Commander for the Allied Powers for accomplishment of work or projects which are for the benefit of the Japanese people, or to carry out the terms of surrender, or to otherwise accomplish the purposes of the Occupation, will be implemented under the surveillance of Occupation Forces charged with such surveillance by the Supreme Commander for the Allied Powers. No form of procurement instrument will be issued to cover these requirements and receipts will not be given for supplies or services necessary for their accomplishment. Payments will not be made from TOW (Works) funds pursuant to directives from the Supreme Commander for the Allied Powers, unless such payments are fully justified by the provisions of the applicable SCAPINs, by implementing instructions issued by those Occupation Force agencies charged with surveillance or by a plan submitted by the Japanese Government and approved by the Supreme Commander for the Allied Powers.

FOR THE SUPREME COMMANDER:

K.B.BUSH
Brigadier General, USA
Adjutant General

3 Incls
1. SCAP AGO Form No. 20
2. SCAP AGO Form No. 14
3. WD Form No. 35, Signature Card with accompanying Schedules of Disbursements.