B-134781, FEB. 27, 1958

B-134781, FEB. 27, 1958

TO MR. SAMUEL KEENIG, AUTHORIZED CERTIFYING OFFICER, SOCIAL SECURITY ADMINISTRATION:

BY LETTER OF DECEMBER 31, 1957, YOU TRANSMITTED AN INVOICE DATED JULY 18, 1957, IN THE AMOUNT OF $4,224.50 OF THE NORTH REFRIGERATION COMPANY COVERING LABOR AND MATERIALS FOR THE SERVICING OF A GOVERNMENT OWNED AIR- CONDITIONING SYSTEM IN THE BUTLER BUILDING, BALTIMORE, MARYLAND. YOU REQUEST AN ADVANCE DECISION AS TO THE PROPRIETY OF MAKING PAYMENT THEREFOR FROM APPROPRIATED FUNDS OF THE BUREAU OF OLD AGE AND SURVIVORS INSURANCE.

YOU STATE THAT NORMALLY INVOICES FOR SERVICES OF THIS TYPE ARE PAID BY THE GENERAL SERVICES ADMINISTRATION, AND THE GENERAL SERVICES ADMINISTRATION IS SUBSEQUENTLY REIMBURSED BY THE BUREAU OF OLD AGE AND SURVIVORS INSURANCE. THE CIRCUMSTANCES LEADING TO THE PERFORMANCE OF THE WORK BY THE CONTRACTOR UPON THE DIRECT REQUEST OF THE BUREAU OF OLD AGE AND SURVIVORS INSURANCE IS EXPLAINED BY THE CONTRACTING OFFICER IN A 6- PAGE STATEMENT WHICH ACCOMPANIED YOUR LETTER. IT IS STATED THEREIN THAT SUBSEQUENT TO CONSULTATION WITH LOCAL GSA MAINTENANCE MEN CONCERNING THE INEFFECTIVENESS OF THE EXISTING AIR-CONDITIONING SYSTEM SERVING THE THIRD AND FOURTH FLOORS, WHICH HAD BEEN OPERATED AND MAINTAINED BY GSA, THE BUREAU ON JUNE 14, 1957, CALLED IN A LOCAL REFRIGERATION FIRM, NORTH REFRIGERATION, TO MAKE AN INSPECTION OF THE SYSTEM, AND RECOMMENDATIONS CONCERNING IMPROVING EFFECTIVENESS ON THOSE FLOORS OF THE BUILDING. THE NORTH REFRIGERATION REPRESENTATIVE STATED THAT IN HIS OPINION THE SYSTEM COULD BE MADE TO OPERATE SATISFACTORILY BY THE ADDITION OF CERTAIN COMPARATIVELY SIMPLE CONTROLS AND A PROPER ADJUSTMENT AND BALANCING OF THE SYSTEM COMPONENTS, AND THAT HIS COMPANY COULD UNDERTAKE THE WORK IMMEDIATELY. IT IS STATED FURTHER BY THE CONTRACTING OFFICER THAT THE NEXT DAY A GSA ENGINEER INSPECTED THE SYSTEM AND INDICATED THAT THE EXISTING SYSTEM DID NOT HAVE SUFFICIENT CAPACITY TO COOL BOTH THE THIRD AND FOURTH FLOORS, AND THAT IN HIS OPINION THE REMEDY WAS TO RESTRICT ITS USE TO A SINGLE FLOOR AND INSTALL AN ENTIRELY NEW SYSTEM TO HANDLE THE OTHER FLOOR AT AN ESTIMATED COST OF $30,000 AND A COMPLETION PERIOD OF AT LEAST 6 MONTHS. FACED WITH THE ALTERNATIVE OF ACCEPTING THE DECISION OF GSA AND FOREGOING AIR-CONDITIONING FOR THE REMAINDER OF THE SUMMER, OR RELYING UPON THE OPINION OF NORTH REFRIGERATION THAT THE SYSTEM COULD BE MADE OPERATIVE WITHIN A FEW DAYS, THE LATTER COURSE WAS DECIDED UPON AND NORTH REFRIGERATION WAS REQUESTED TO DO THE WORK, NO WRITTEN PURCHASE ORDER OR CONTRACT BEING ISSUED. THE ORIGINAL ESTIMATED COST OF THE WORK WAS LESS THAN THE OPEN-MARKET LIMITATION OF $500, AND WORK WAS COMMENCED ON JUNE 18. AS WORK PROGRESSED ADDITIONAL WORK BECAME NECESSARY BUT BY JULY 6 THE SYSTEM WAS PLACED IN OPERATION AND FOUND SATISFACTORY.

SINCE THE MATTER CONCERNS CERTAIN SERVICES GENERALLY PERFORMED OR CONTRACTED FOR BY THE GENERAL SERVICES ADMINISTRATION, A REPORT WAS REQUESTED FROM THAT AGENCY. IN REPLY DATED FEBRUARY 13, 1958, WE WERE ADVISED BY THE REGIONAL DIRECTOR, PUBLIC BUILDINGS SERVICE, THAT THE DOCUMENTS UNDER WHICH THE BUREAU WAS ASSIGNED OCCUPANCY IN THE BUTLER BUILDING SHOW THAT GSA IS RESPONSIBLE FOR ALL CUSTOMARY BUILDING SERVICES ON A REIMBURSABLE BASIS INCLUDING AIR-CONDITIONING AND THAT IT HAS BEEN OPERATING ON THIS PREMISE EVER SINCE THE BUREAU WAS ASSIGNED AND OCCUPIED THIS SPACE IN 1956. IT IS FURTHER REPORTED THAT THE BUREAU ENTERED INTO THE ARRANGEMENT WITH NORTH REFRIGERATION COMPANY WITHOUT THE KNOWLEDGE OR CONSENT OF GSA. HOWEVER, THE OPINION IS EXPRESSED THAT PRIOR TO THE PERFORMANCE OF THE WORK, GSA COULD HAVE ENTERED INTO A CONTRACT FOR THE REPAIR OF THE AIR-CONDITIONING SYSTEM ON A COMPETITIVE, OR EVEN A NEGOTIATED BASIS IF JUSTIFIED UNDER EXISTING LAW, AND ACCEPTED REIMBURSEMENT THEREFOR. ALSO, WHILE THAT AGENCY DOES NOT AGREE WITH THE ACTION TAKEN BY THE BUREAU, THE OPINION IS EXPRESSED THAT THE CONTRACTOR WHO PERFORMED THE WORK IN GOOD FAITH SHOULD NOT BE MADE TO SUFFER.

IT APPEARS FROM THE FOREGOING THAT THE CONTRACTING FOR WORK SUCH AS HERE INVOLVED IS A RESPONSIBILITY OF THE GSA, AND IT THEREFOR FOLLOWS THAT THE BUREAU WAS WITHOUT LEGAL AUTHORITY TO REQUEST PERFORMANCE OF THE AIR- CONDITIONING WORK DIRECTLY FROM THE NORTH REFRIGERATION COMPANY. ORDINARILY, NO RECOVERY CAN BE HAD IN SUCH INSTANCES. PAYMENT TO NORTH REFRIGERATION COMPANY IN THIS CASE, HOWEVER, MAY BE MADE ON A QUANTUM MERUIT BASIS FOR THE REASONABLE VALUE OF THE WORK PERFORMED, SINCE THE GOVERNMENT HAS RECEIVED THE BENEFIT OF SUCH WORK.

IN THAT REGARD, THE REGIONAL DIRECTOR, PUBLIC BUILDINGS SERVICE, ADVISES THAT THEIR OFFICE COULD NOT, IN GOOD CONSCIENCE, APPROVE THE SUBMITTED BILL WITH CHARGES OF $1.50 PER POUND FOR FREON 12 GAS AND LABOR AT $10 PER HOUR STRAIGHT TIME AND $15 AND $20 PER HOUR FOR OVERTIME. THE MAXIMUM RATES WHICH THEY ALLOW FOR WORK SUCH AS HERE INVOLVED WHEREIN THE CONTRACTOR SUPPLIES THE REFRIGERANT AND THE LABOR WOULD BE $1 PER POUND FOR REFRIGERANT, $7 PER MAN HOUR FOR STRAIGHT TIME AND $14 PER HOUR FOR OVERTIME. IN THESE CIRCUMSTANCES THE CHARGES AS BILLED MAY NOT BE CONSIDERED AS REPRESENTING A FAIR AND REASONABLE VALUE OF THE MATERIAL AND SERVICES AND ACCORDINGLY A DEDUCTION OF $953 SHOULD BE MADE FROM THE SUBMITTED INVOICE, AND YOU ARE AUTHORIZED TO CERTIFY A VOUCHER FOR PAYMENT UPON THAT BASIS.

REFERENCE TO THIS DECISION SHOULD ACCOMPANY THE VOUCHER UNDER WHICH PAYMENT WILL BE MADE. THE INVOICE IS RETURNED HEREWITH.