B-23293, FEBRUARY 11, 1943, 22 COMP. GEN. 784

B-23293, FEBRUARY 11, 1943, 22 COMP. GEN. 784

CONTRACTS - COST-PLUS - SUBCONTRACTS ON A COST-PLUS-A-PERCENTAGE-OF-COST BASIS A COST-PLUS-A-FIXED-FEE CONTRACTOR MAY NOT BE REIMBURSED ON A QUANTUM MERUIT OR OTHER BASIS FOR ARTICLES AND SERVICES FURNISHED THE GOVERNMENT IN CONNECTION WITH THE PERFORMANCE OF ITS CONTRACT EXECUTED UNDER AUTHORITY OF THE ACT OF JULY 2, 1940, WHERE THE ARTICLES AND SERVICES WERE OBTAINED BY THE PRIME CONTRACTOR FROM A SUBCONTRACTOR UNDER A COST-PLUS-A- PERCENTAGE-OF-COST CONTRACT IN CONTRAVENTION OF THE PROHIBITION IN SAID ACT AGAINST THE USE OF THE COST-PLUS-A-PERCENTAGE OF-COST ,SYSTEM" OF CONTRACTING.

COMPTROLLER GENERAL WARREN TO DAY AND ZIMMERMAN, INC., FEBRUARY 11, 1943:

REFERENCE IS MADE TO YOUR CLAIM FOR REIMBURSEMENT OF AMOUNTS PAID TO THE WESTERN - ELECTRO MECHANICAL COMPANY, INC., TOTALING $150,194.19, IN CONNECTION WITH THE PERFORMANCE OF YOUR COST-PLUS-A-FIXED-FEE CONTRACT NO. W-ORD-487, DATED NOVEMBER 4, 1940, FOR ARCHITECTURAL AND ENGINEERING SERVICES, INCLUDING THE DESIGNING OF PLANS AND SPECIFICATIONS, TECHNICAL SUPERVISION OF PLANT CONSTRUCTION, PROCUREMENT OF EQUIPMENT, AND OPERATION OF AN ORDNANCE PLANT NEAR BURLINGTON, IOWA.

IN A DECISION OF MARCH 13, 1942, TO THE SECRETARY OF WAR (21 COMP. GEN. 858), IT WAS POINTED OUT THAT YOUR SUBCONTRACT WITH THE WESTERN ELECTRO MECHANICAL COMPANY, INC., DATED SEPTEMBER 29, 1941, UNDER WHICH IT WAS TO MANUFACTURE CERTAIN OF THE EQUIPMENT, TOOLS AND MACHINERY TO BE INSTALLED IN SAID PLANT, PROVIDED FOR PAYMENT TO THAT COMPANY ON A COST-PLUS-A- PERCENTAGE-OF-COST BASIS IN CONTRAVENTION OF SECTION 1 OF THE ACT OF JULY 2, 1940, 54 STAT. 712. SAID SECTION, PURSUANT TO WHICH CONTRACT NO. W-ORD -487 WAS ENTERED INTO WITH YOU, AUTHORIZED THE SECRETARY OF WAR TO NEGOTIATE VARIOUS CONTRACTS TO EXPEDITE THE BUILDING UP OF THE NATIONAL DEFENSE AND MADE AVAILABLE FOR THAT PURPOSE MONEYS APPROPRIATED TO THE WAR DEPARTMENT FOR NATIONAL DEFENSE FOR THE FISCAL YEAR 1941, BUT EXPRESSLY RESTRICTED SUCH AUTHORITY BY A PROVISO, AS FOLLOWS:

* * * PROVIDED FURTHER, THAT THE COST-PLUS-A-PERCENTAGE-OF-COST SYSTEM OF CONTRACTING SHALL NOT BE USED UNDER THIS SECTION; BUT THIS PROVISO SHALL NOT BE CONSTRUED TO PROHIBIT THE USE OF THE COST-PLUS-A FIXED-FEE FORM OF CONTRACT WHEN SUCH USE IS DEEMED NECESSARY BY THE SECRETARY OF WAR.

ACCORDINGLY, IN THE DECISION OF MARCH 13, 1942, TO THE SECRETARY OF WAR, IT WAS STATED:

WHILE CAREFUL CONSIDERATION HAS BEEN GIVEN TO THE VIEWS OF THE ORDNANCE DEPARTMENT WITH RESPECT TO THE LEGALITY OF SUBCONTRACTS ENTERED INTO BY A PRIME CONTRACTOR ON A COST-PLUS-A-PERCENTAGE-OF-COST BASIS, I AM CONSTRAINED TO HOLD THAT SUCH TYPE OF SUBCONTRACTS ARE IN CONTRAVENTION OF THE SPIRIT AND PURPOSE OF THE ACT OF JULY 2, 1940, PROVIDING THAT "THE COST-PLUS-A-PERCENTAGE-OF-COST SYSTEM OF CONTRACTING SHALL NOT BE USED UNDER THIS SECTION.' IT IS EVIDENT THAT THE PROHIBITION AGAINST THIS FORM OF CONTRACTING COULD BE SUBSTANTIALLY EVADED AND THE PURPOSES THEREOF DEFEATED WERE IT NOT APPLIED TO THE PERFORMANCE OF THAT PART OF THE CONTRACT WORK SUBLET BY THE PRIME CONTRACTOR TO OTHERS. IN APPARENT RECOGNITION OF THIS POSSIBILITY, REGULATIONS HAVE BEEN ISSUED BY YOUR DEPARTMENT WHEREIN THE OFFICIALS THEREOF HAVE BEEN INSTRUCTED TO REFUSE "TO GIVE THEIR APPROVAL TO SUBCONTRACTS PROPOSED TO BE ENTERED INTO UPON A COST-PLUS A-PERCENTAGE-OF-COST BASIS.' SEE SUPPLEMENT NO. 6 TO THE MANUAL FOR THE CONSTRUCTION DIVISION, BOOK IV, PART II, DATED OCTOBER 15, 1941, AND CONSTRUCTION DIVISION LETTERS NOS. 340, AND 478.

THEREFORE, SINCE THE AGREEMENT OF SEPTEMBER 29, 1941, BETWEEN THE PRIME CONTRACTOR AND THE WESTERN ELECTRO-1MECHANICAL CO., INC., PROVIDES FOR PAYMENT TO THE COMPANY ON A COST-PLUS-A-PERCENTAGE-OF-COST BASIS, SUCH AGREEMENT MAY NOT BE REGARDED AS CREATING ANY BINDING OBLIGATION ON THE UNITED STATES TO REIMBURSE THE PRIME CONTRACTOR FOR ANY PAYMENTS MADE TO THE COMPANY IN ACCORDANCE WITH ITS TERMS. * * *

IT IS TO BE OBSERVED THAT WHAT THE CONGRESS PROVIDED AGAINST WAS NOT MERELY A COST-PLUS-A-PERCENTAGE-OF-COST CONTRACT, BUT A "COST-PLUS-A PERCENTAGE-OF-COST SYSTEM OF CONTRACTING.' IN A RECENT CONDEMNATION PROCEEDING IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF MISSOURI, THE LANDOWNER HAD URGED, AMONG OTHER THINGS, THAT A CONTRACT EXISTING BETWEEN HERSELF AND THE UNITED STATES, WHEREBY SHE AGREED TO PAY A FIVE PERCENT COMMISSION TO A THIRD PARTY FROM THE GROSS SALES PRICE RECEIVED FROM THE GOVERNMENT, WAS NOT A COST-PLUS-A PERCENTAGE-OF-COST CONTRACT PROHIBITED BY THE STATUTE HERE INVOLVED, AND THAT IT SHOULD BE ENFORCED AS WRITTEN. UNITED STATES V. 94.68 ACRES OF LAND, ST. CHAS. CO., MO., 45 F.1SUPP. 1016. THE COURT REJECTED THE REASONING ADVANCED, STATING, IN PART, AS FOLLOWS:

IT IS CONTENDED BY DEFENDANT THAT HER CONTRACT WAS NOT A COST-PLUS A- PERCENTAGE-OF-COST CONTRACT AND HENCE WAS NOT PROHIBITED BY CONGRESS. THAT IS NOT THE QUESTION. CONGRESS, NO DOUBT ANTICIPATING THAT LEARNED, TECHNICAL AND WEIRD DEFINITIONS OF COST-PLUS-A PERCENTAGE-OF-COST CONTRACTS WOULD FOLLOW A PROHIBITION OF A PARTICULAR SPECIES OF SUCH CONTRACTS, WISELY BROADENED THE PROHIBITION TO EXTEND TO ALL TRANSACTIONS IN WHICH THE SYSTEM WAS USED. WHAT WAS THE "SYSTEM" AND WHAT WAS THE VICE SOUGHT TO BE ELIMINATED? THE SYSTEM WAS THE METHOD OF CONTRACTING WHEREBY THE GOVERNMENT AGENT'S PROFIT OR COMPENSATION WAS INCREASED IN DIRECT PROPORTION TO THE COST OF THE OBJECT OR COMMODITY ITSELF TO THE GOVERNMENT. THE VICE WAS THE TEMPTATION, OFTENTIMES NOT RESISTED, TO DELIBERATELY OR CARELESSLY CAUSE OR PERMIT THE COST OF THE OBJECT TO BE INCREASED IN ORDER TO INCREASE THE PROFIT OR COMMISSION. WAS THAT SYSTEM USED AND THAT TEMPTATION OFFERED IN THIS CONTRACT? IF WE ACCEPT THE WORDS OF THE "FORM FROM WASHINGTON" AS SUPINELY AS DEFENDANT SUGGESTS, THE ANSWER MIGHT WELL BE IN THE NEGATIVE. BUT IF WE ACCEPT THE UNCONTRADICTED EVIDENCE DETAILING THE METHOD AGREED UPON, ADVERTISED, AND ACTUALLY FOLLOWED AND THE REASON GIVEN (AGAIN UNCONTRADICTED) FOR THE USE OF THE LANGUAGE OF THE "FORM," THE IRRESISTIBLE CONCLUSION IS THAT THE CONTRACT WAS SQUARELY CONDEMNED AND PROHIBITED BY CONGRESS.

IT IS SUGGESTED THAT THE CONTRACT WITH MISS CALL AWAY WAS NOT A COST PLUS -A-PERCENTAGE-OF-COST CONTRACT BECAUSE SUCH CONTRACTS ARE THOSE WHICH PROVIDE THAT A PARTY WHO FURNISHES A FACILITY WILL BE PAID HIS COST PLUS A PERCENTAGE OF THAT COST FOR HIS PROFIT, WITH BOTH PAYMENTS BEING MADE TO THE SAME PARTY BY THE SAME PARTY. IT IS ARGUED THAT THIS CONTRACT WAS NOT OF THE PROHIBITED VARIETY BECAUSE IT REQUIRED THE GOVERNMENT TO MAKE NOT TWO, BUT ONE PAYMENT, AND THE AMOUNT OF THAT PAYMENT WAS NOT UNKNOWN BUT KNOWN AND WRITTEN INTO THE CONTRACT AT THE TIME OF ITS EXECUTION.

SUCH ARGUMENTS TEND TO FURTHER ILLUSTRATE THE WISDOM OF CONGRESS IN PROHIBITING THE "SYSTEM" OF COST-PLUS-A-PERCENTAGE-OF-COST CONTRACTING RATHER THAN DECLARING THAT THE USE OF ONE SPECIFIED PROCEDURE WHICH MAY ACCOMPLISH THE UNDESIRED RESULT SHALL NOT BE USED, THEREBY LEAVING IT OPEN TO ARGUMENT THAT ANY VARIATION FROM THE SPECIFIED PROCEDURE IS NOT THE PROCEDURE PROHIBITED, ALTHOUGH THE RESULT IS EXACTLY THE SAME. ( ITALICS SUPPLIED.)

NOTWITHSTANDING THE INVALIDITY OF THE SUBCONTRACT, YOU NOW SEEK PAYMENT ON A QUANTUM MERUIT BASIS, CONTENDING IN YOUR LETTER OF JULY 27, 1942, AS FOLLOWS:

THE METHOD OF PAYMENT HAS BEEN DECLARED BY YOU TO BE IN CONTRAVENTION OF THE SPIRIT OF THE ACT OF JULY 2, 1940 ( PUBLIC NO. 703, 76TH CONGRESS). HOWEVER, AT THE TIME THE SUBCONTRACT WAS NEGOTIATED WE DID NOT HAVE THE BENEFIT OF YOUR OPINION, NOR WAS THE QUESTION RAISED UNTIL THE WORK HAD BEEN ALMOST COMPLETED. UNDER THE CIRCUMSTANCES, REQUIRING AS THEY DID THE PROSECUTION OF THE WORK WITH THE MINIMUM OF DELAY AND WITHOUT ANY DEFINITE OR EVEN APPROXIMATE ESTIMATE OF THE AMOUNT AND KIND OF WORK TO BE DONE, THE METHOD OF PAYMENT WAS DEEMED BY ALL PARTIES CONCERNED TO BE THE ONLY FAIR AND EQUITABLE METHOD. IT IS POINTED OUT THAT THE COST OF LABOR AND MATERIAL WERE THE ONLY COSTS USED AS THE BASIS FOR THE MULTIPLIERS. THE OVERHEAD AND PROFIT WERE NOT SEPARATELY PROVIDED FOR, BUT WERE TO COME OUT OF THE OVERWRITE. THE IOWA ORDNANCE PLANT CONCEIVED, DESIGNED, AND CONSTRUCTED, AND IS OPERATING SOLELY IN PROSECUTION OF THE WAR EFFORT; THE WORK DONE BY THE SUBCONTRACTOR HAVING CONTRIBUTED TO THE EQUIPPING OF THE PLANT, HAS LIKEWISE BEEN A MAJOR CONTRIBUTION TO THE WAR EFFORT.

INASMUCH AS THIS SUBCONTRACT FORMALLY EXECUTED ON SEPTEMBER 29, 1941 WAS ENTERED INTO BY THIS COMPANY IN GOOD FAITH, DULY APPROVED BY THE CONTRACTING OFFICER'S REPRESENTATIVE ON OCTOBER 2, 1941, AND THE WORK THEREUNDER WAS PERFORMED BY THE SUBCONTRACTOR, IT IS OUR VIEW THAT REIMBURSEMENT BE MADE TO US FOR PAYMENTS TO THE SUBCONTRACTOR, SUBSTANTIALLY ON THE BASIS PROVIDED FOR IN THE SUBCONTRACT.

* * * WE FEEL THAT THE INSTANT CASE WARRANTS SETTLEMENT IN FULL AS AN IMPLIED CONTRACT FOR THE FURTHER REASONS THAT THE EQUIPMENT HAS BEEN DULY INSTALLED IN THE IOWA ORDNANCE PLANT; THAT IT IS NEEDED IN THE SUCCESSFUL OPERATION OF THE PLANT; THAT SAVE FOR THE METHOD OF PAYMENT TITLE TO THE EQUIPMENT VESTS IN THE GOVERNMENT; THAT THE COST OF THE EQUIPMENT IS REASONABLE AND JUST AND THE CLAIM HEREIN IS FOR THE VALUE THEREOF; THAT THE AMOUNT CLAIMED IS NO GREATER THAN WOULD HAVE BEEN PAID AND REIMBURSED HAD ANY OTHER METHOD, NOT DEEMED BY YOU ILLEGAL, BEEN USED; THAT ALL PARTIES PROCEEDED IN THE UTMOST GOOD FAITH AND THE CHARGES AND INVOICES THEREFOR WERE PROPERLY AUDITED AT ALL TIMES BY THE WAR DEPARTMENT THROUGH THE SAN FRANCISCO ORDNANCE DISTRICT; AND THAT IN FACT THE WORK WAS PERFORMED EFFICIENTLY AND ECONOMICALLY AND AT ALL TIMES TO THE BEST INTERESTS OF THE GOVERNMENT.

HOWEVER, WHAT IS SUGGESTED, TO WIT, ALLOWING REIMBURSEMENT ON A QUANTUM MERUIT BASIS, WOULD BE TANTAMOUNT TO CIRCUMVENTING THE STATUTORY INHIBITION APPLICABLE IN THE CASE OF THE SUBCONTRACT. THE PROVISO IN QUESTION QUALIFIES AND RESTRAINS THE GENERALITY OF THE SUBSTANTIVE ENACTMENT TO WHICH IT IS ATTACHED; AND THERE APPEARS NO ROOM FOR DOUBT THAT THE CONGRESS INTENDED THEREBY TO RESTRICT THE GENERAL AUTHORITY GRANTED TO THE SECRETARY OF WAR IN THE ACT OF JULY 2, 1940, BY EXCEPTING ALL CASES WHERE THE COST-PLUS-A-PERCENTAGE-OF-COST SYSTEM OF CONTRACTING MIGHT BE EMPLOYED, SO THAT, TO THE EXTENT THIS SYSTEM OF CONTRACTING SHOULD BE USED, BOTH THE FUNDS OTHERWISE MADE AVAILABLE, AND THE AUTHORITY TO ENTER INTO CONTRACTS, FOR THE PURPOSES ENUMERATED IN SECTION 1 OF SAID ACT, WOULD BE DENIED. AS STATED BY THE COURT IN UNITED STATES V. CERTAIN LAND, ETC., 46 F.SUPP. 921, AT PAGE 926, IN CONNECTION WITH A MATTER INVOLVING THE CONSTRUCTION TO BE PLACED UPON THE PROVISO IN QUESTION,"THE PROVISION AGAINST COST-PLUS-A PERCENTAGE CONTRACTS * * * WAS AN AMENDMENT, DELIBERATELY INSERTED, AND IMPOSES A RESTRICTION THAT MUST BE OBSERVED.'

NOT ONLY IS AN UNAUTHORIZED CONTRACT UNENFORCEABLE ACCORDING TO ITS TERMS, BUT NO CONTRACT MAY BE IMPLIED WHERE A STATUTE POSITIVELY PROHIBITS THE TRANSACTION. THE UNITED STATES IS NEITHER BOUND NOR ESTOPPED BY ACTS OF OFFICERS OR AGENTS IN ENTERING INTO, APPROVING, OR PURPORTING TO AUTHORIZE AGREEMENTS PROHIBITED BY LAW, EVEN THOUGH IT APPEARS THAT THE GOVERNMENT MAY HAVE BENEFITED THEREBY; AND GENERAL PRINCIPLES OF EQUITY WILL NOT BE APPLIED TO FRUSTRATE THE PURPOSE OF SUCH LAWS OR TO THWART PUBLIC POLICY. LIMITATIONS ON AUTHORITY TO IMPOSE CONTRACT OBLIGATIONS UPON THE UNITED STATES ARE AS APPLICABLE TO CONTRACTS BY IMPLICATION AS THEY ARE TO THOSE EXPRESSLY MADE. SEE SUTTON V. UNITED STATES, 256 U.S. 575; PAN AMERICAN COMPANY V. UNITED STATES, 273 U.S. 456; PROVIDENCE ENGINEERING CORP. V. DOWNEY SHIPBUILDING CORP., 294 F. 641, CERTIORARI DENIED, 264 U.S. 586.

IN BANK OF THE UNITED STATES V. OWENS ET AL., 2 PETERS 527, THERE WAS CONSIDERED A CONTRACT RESERVING A GREATER RATE OF INTEREST THAN THAT PROVIDED FOR IN THE CHARTER OF THE BANK OF THE UNITED STATES. AFTER OBSERVING THAT "ALTHOUGH THE ACT OF INCORPORATION FORBIDS THE TAKING OF A GREATER INTEREST THAN SIX PERCENT, IT DOES NOT DECLARE VOID ANY CONTRACT RESERVING A GREATER SUM THAN IS PERMITTED," THE COURT STATED:

THE QUESTION THEN IS, WHETHER SUCH CONTRACTS ARE VOID IN LAW, UPON GENERAL PRINCIPLES.

THE ANSWER WOULD SEEM TO BE PLAIN AND OBVIOUS, THAT NO COURT OF JUSTICE CAN IN ITS NATURE BE MADE THE HANDMAID OF INIQUITY. COURTS ARE INSTITUTED TO CARRY INTO EFFECT THE LAWS OF A COUNTRY, HOW CAN THEY THEN BECOME AUXILIARY TO THE CONSUMMATION OF VIOLATIONS OF LAW?

TO ENUMERATE HERE ALL THE INSTANCES AND CASES IN WHICH THIS REASONING HAS BEEN PRACTICALLY APPLIED, WOULD BE TO INCUR THE IMPUTATION OF VAIN PARADE.

THERE CAN BE NO CIVIL RIGHT WHERE THERE CAN BE NO LEGAL REMEDY; AND THERE CAN BE NO LEGAL REMEDY FOR THAT WHICH IS ITSELF ILLEGAL.

QUOTING FROM THAT DECISION WITH APPROVAL IN GIBBS V. BALTIMORE GAS CO., 130 U.S. 396, 412, WHERE A CONTRACT IN RESTRAINT OF TRADE WAS SOUGHT TO BE ENFORCED, THE SUPREME COURT HELD AS FOLLOWS:

* * * IT IS CLEAR THAT CONTRACTS IN DIRECT VIOLATION OF STATUTES EXPRESSLY FORBIDDING THEIR EXECUTION, CANNOT BE ENFORCED.

THE QUESTION IS NOT ONE INVOLVING WANT OF AUTHORITY TO CONTRACT ON ACCOUNT OF IRREGULARITY OF ORGANIZATION OR LACK OF AFFIRMATIVE GRANT OF POWER IN THE CHARTER OF A CORPORATION, BUT A QUESTION OF THE ABSOLUTE WANT OF POWER TO DO THAT WHICH IS INHIBITED BY STATUTE, AND, IF ATTEMPTED, IS IN POSITIVE TERMS DECLARED "UTTERLY NULL AND VOID.' "THE RULE OF LAW," SAID PARKER, C.J., IN RUSSELL V. DEGRAND, 15 MASS. 35, 39,"IS OF UNIVERSAL OPERATION, THAT NONE SHALL, BY THE AID OF A COURT OF JUSTICE, OBTAIN THE FRUITS OF AN UNLAWFUL BARGAIN.'

WE CANNOT ASSIST THE PLAINTIFF TO GET PAYMENT FOR EFFORTS TO ACCOMPLISH WHAT THE LAW DECLARED SHOULD NOT BE DONE, AND THE JUDGMENT MUST BE AFFIRMED.

IN ANOTHER CASE, GEORGE M. DAVIS V. UNITED STATES, 59 C.1CLS. 197, THE PLAINTIFF SUED TO OBTAIN PAYMENT FOR CERTAIN PRINTING WORK DONE FOR THE U.S. FUEL ADMINISTRATION WHICH SAID AGENCY WAS REQUIRED BY THE PROVISIONS OF SECTION 87 OF THE ACT OF JANUARY 12, 1895, 28 STAT. 622, TO PROCURE FROM THE GOVERNMENT PRINTING OFFICE. THE COURT OF CLAIMS HELD THAT,"WHILE THE CLAIM IS BEYOND DOUBT AN EQUITABLE ONE, WE FIND NO LEGAL WAY FOR THE RENDITION OF JUDGMENT," GIVING THE REASONS FOR ITS ACTION, IN PART, AS FOLLOWS:

* * * WHERE A STATUTE IN EXPRESS LANGUAGE CIRCUMSCRIBES THE AUTHORITY AND POWER OF AN OFFICER OF THE GOVERNMENT AND EXPRESSLY DIRECTS THE MANNER OF SECURING SUPPLIES OF THE CHARACTER HERE FURNISHED, WE ARE NOT, IN THE ABSENCE OF SOME PRECEDENT TO THAT EFFECT, AUTHORIZED IN HOLDING THE UNITED STATES LIABLE FOR A CONTRACT MADE IN DIRECT OPPOSITION TO EXISTING LAW.

* * * IF AN OFFICER OF THE GOVERNMENT IS POSITIVELY FORBIDDEN TO ENTER INTO A CONTRACT, AND IN ADDITION TO THIS IS MANDATORILY DIRECTED TO ACT IN A CERTAIN WAY UNDER PRESCRIBED CONDITIONS, HE MAY NOT DISREGARD THE MANDATE OF THE LAW AND OBLIGATE THE UNITED STATES IN SO DOING. HIS AUTHORITY TO ACT IS DERIVED FROM THE STATUTE.

THEREFORE, WHATEVER THE VALUE OR USEFULNESS OF THE ARTICLES AND SERVICES OBTAINED BY YOU FROM THE WESTERN-ELECTRO MECHANICAL COMPANY, INC., AND FURNISHED TO THE UNITED STATES UNDER YOUR CONTRACT, AS SHOWN IN THE FOREGOING, THE PROCUREMENT THEREOF AS THE RESULT OF A COST-PLUS A- PERCENTAGE-OF-COST SYSTEM OF CONTRACTING WAS SPECIFICALLY PROHIBITED AND EXCEPTED FROM THE AUTHORIZATIONS OTHERWISE GRANTED IN THE ACT OF JULY 2, 1940. CONSEQUENTLY, I HAVE TO ADVISE THAT THERE IS NO LEGAL AUTHORITY IN THIS OFFICE TO ALLOW ANY PART OF YOUR CLAIM.