A-54011, DECEMBER 13, 1934, 14 COMP. GEN. 458
Highlights
CONTRACTS - CLAIMS FOR INCREASED COSTS CAUSED BY CODE COMPLIANCE - TIME LIMITATION THE DATE OF RECORD IN THE ADMINISTRATIVE OFFICE WHEN THE WORK UNDER A GOVERNMENT CONTRACT WAS FINALLY INSPECTED AND ACCEPTED AS COMPLYING WITH THE TERMS OF THE CONTRACT IS THE DATE FROM WHICH THERE BEGINS TO RUN THE SIX MONTHS' PERIOD FIXED IN SECTION 4 OF THE ACT OF JUNE 16. THESE INQUIRIES ARE SUBMITTED FOR YOUR DETERMINATION. THEY ARE AS FOLLOWS: (1) WHEN IS THE CONTRACT WITH THE GOVERNMENT COMPLETED? IS IT THE DATE UPON WHICH THE CONTRACTOR'S WORK IS CONCLUDED. OR THE DATE OF FINAL SETTLEMENT? (2) IS THE SUBCONTRACTOR'S CONTRACT COMPLETED UNDER THE ACT UPON CONCLUSION OF THE WORK UNDER THE SUBCONTRACT.
A-54011, DECEMBER 13, 1934, 14 COMP. GEN. 458
CONTRACTS - CLAIMS FOR INCREASED COSTS CAUSED BY CODE COMPLIANCE - TIME LIMITATION THE DATE OF RECORD IN THE ADMINISTRATIVE OFFICE WHEN THE WORK UNDER A GOVERNMENT CONTRACT WAS FINALLY INSPECTED AND ACCEPTED AS COMPLYING WITH THE TERMS OF THE CONTRACT IS THE DATE FROM WHICH THERE BEGINS TO RUN THE SIX MONTHS' PERIOD FIXED IN SECTION 4 OF THE ACT OF JUNE 16, 1934, 48 STAT. 975, DURING WHICH THE CONTRACTOR OR SUBCONTRACTOR MAY EXERCISE THE OPTION TO SUBMIT A CLAIM UNDER THE TERMS OF SAID STATUTE FOR INCREASED COSTS CAUSED BY COMPLIANCE ON AND AFTER AUGUST 10, 1933, WITH CODES OF FAIR COMPETITION.
COMPTROLLER GENERAL MCCARL TO THE SECRETARY OF THE TREASURY, DECEMBER 13, 1934:
THERE HAS BEEN RECEIVED YOUR LETTER OF DECEMBER 6, 1934, AS FOLLOWS:
THIS DEPARTMENT HAS RECEIVED INQUIRIES WITH RESPECT TO THE MEANING OF THE CLAUSE "WITHIN SIX MONTHS AFTER THE COMPLETION OF THE CONTRACT" CONTAINED IN SECTION 4 OF PUBLIC ACT 369, 73RD CONGRESS. SINCE THE AUTHORITY FOR THE ADJUSTMENT AND SETTLEMENT OF CLAIMS UNDER THIS ACTIS VESTED IN YOU, THESE INQUIRIES ARE SUBMITTED FOR YOUR DETERMINATION.
THEY ARE AS FOLLOWS:
(1) WHEN IS THE CONTRACT WITH THE GOVERNMENT COMPLETED? IS IT THE DATE UPON WHICH THE CONTRACTOR'S WORK IS CONCLUDED, THE DATE OF THE GOVERNMENT'S ACCEPTANCE AND OCCUPANCY, OR THE DATE OF FINAL SETTLEMENT?
(2) IS THE SUBCONTRACTOR'S CONTRACT COMPLETED UNDER THE ACT UPON CONCLUSION OF THE WORK UNDER THE SUBCONTRACT, OR IS IT COMPLETED UPON THE GOVERNMENT'S ACCEPTANCE AND OCCUPANCY, OR UPON THE DATE OF THE FINAL SETTLEMENT OF THE CONTRACT WITH THE GENERAL CONTRACTOR?
IN CONNECTION WITH THESE QUESTIONS, YOUR ATTENTION IS CALLED TO THE DIFFICULTY OF DETERMINING WHEN THE WORK HAS ACTUALLY BEEN COMPLETED. AS A PRACTICAL MATTER, CONSIDERABLE CONTROVERSY COULD BE AVOIDED IF THE ACT WERE CONSTRUED AS ALLOWING SIX MONTHS AFTER THE DATE OF FINAL SETTLEMENT OF THE CONTRACT, BOTH AS REGARDS THE CLAIMS OF GENERAL CONTRACTORS AND THOSE OF SUBCONTRACTORS. IT IS ALSO BELIEVED THAT THIS IS THE PROPER CONSTRUCTION OF THE LANGUAGE OF THE ACT.
THE PARTICULAR LANGUAGE OF THE ACT OF JUNE 16, 1934, 48 STAT. 974, TO WHICH YOU HAVE REFERRED, IS CONTAINED IN SECTION 4, AS FOLLOWS:
NO CLAIM HEREUNDER SHALL BE CONSIDERED OR ALLOWED UNLESS PRESENTED WITHIN SIX MONTHS FROM THE DATE OF APPROVAL OF THIS ACT OR, AT THE OPTION OF THE CLAIMANT, WITHIN SIX MONTHS AFTER THE COMPLETION OF THE CONTRACT, EXCEPT IN THE DISCRETION OF THE COMPTROLLER GENERAL FOR GOOD CAUSE SHOWN BY THE CLAIMANT.
PRESUMABLY YOU HAVE SUGGESTED THE TERM "FINAL SETTLEMENT" FOR THE REASON THAT SAID PHRASE IS USED IN THE ACT OF AUGUST 13, 1894, 28 STAT. 278, AS AMENDED BY THE ACT OF FEBRUARY 24, 1905, 33 STAT. 811, 812, AND IT NEEDS BUT AN EXAMINATION OF THE CASES ARISING UNDER SAID ACT TO DISCLOSE THAT IT IS EXTREMELY DIFFICULT TO DETERMINE WHEN "FINAL SETTLEMENT" HAS BEEN EFFECTED OF A CONTRACT WITHIN THE MEANING OF SAID STATUTES AND THAT THE QUESTION IS A PROLIFIC SOURCE OF LITIGATION BETWEEN SUBCONTRACTORS, CONTRACTORS, AND THE SURETIES ON THEIR PERFORMANCE BONDS. IT IS, OF COURSE, DESIRABLE TO AVOID ANY SUCH FERTILE FIELD OF DISPUTE AS TO WHEN FINAL SETTLEMENT WAS EFFECTED IN CONNECTION WITH THE ACT OF JUNE 16, 1934, WHICH DID NOT USE THE TERM "FINAL SETTLEMENT," BUT THE PHRASE "COMPLETION OF THE CONTRACT.' AS A PRACTICAL MATTER, A CONTRACT IS NOT COMPLETED UNTIL THE WORK HAS BEEN PERFORMED AND ACCEPTED BY THE GOVERNMENT AS COMPLYING WITH THE TERMS OF THE CONTRACT, AND IT ISTO BE PRESUMED THAT IN EVERY CASE OF A CONTRACT WITH THE UNITED STATES THERE IS AN ADMINISTRATIVE RECORD AS TO WHEN THE WORK WAS FINALLY INSPECTED AND ACCEPTED AS COMPLYING WITH THE TERMS OF THE CONTRACT, AND SUCH DATE IS THE DATE FROM WHICH THE 6 MONTHS' PERIOD BEGINS TO RUN WHEN THE CONTRACTOR EXERCISES THE OPTION TO SUBMIT HIS CLAIM WITHIN 6 MONTHS AFTER THE COMPLETION OF THE CONTRACT. THE WORK OF A SUBCONTRACTOR IS NOT COMPLETED UNTIL THE GOVERNMENT HAS INSPECTED AND ACCEPTED THE WORK OF THE CONTRACTOR, THAT IS, UNTIL THE GOVERNMENT HAS INSPECTED AND ACCEPTED THE BUILDING OR OTHER PUBLIC WORK AS COMPLYING WITH THE TERMS OF THE CONTRACT, THE 6 MONTHS' PERIOD WILL NOT BEGIN TO RUN EITHER AS TO THE CONTRACTOR OR THE SUBCONTRACTORS.