B-151470, FEB. 4, 1964

B-151470, FEB. 4, 1964

TO GOODWIN, PROCTER AND HOAR:

BY LETTERS DATED MAY 1 AND DECEMBER 12, 1963, YOU PROTESTED, ON BEHALF OF CHAS. T. MAIN, INC., AGAINST A CLAIM ASSERTED BY THE AGENCY FOR INTERNATIONAL DEVELOPMENT (AID) IN THE AMOUNT OF $197,361.15, REPRESENTING AMOUNTS ERRONEOUSLY REIMBURSED AS CONTRACT COSTS UNDER A COST-PLUS-A-FIXED -FEE CONTRACT DATED JUNE 23, 1950, BETWEEN MAIN AND ETIBANK, A TURKISH GOVERNMENT AGENCY, FOR CONSULTING SERVICES ON A HYDROELECTRIC POWER PROJECT AT SARIYAR, TURKEY. THE FINANCIAL PROVISIONS OF THE CONTRACT AND ITS AMENDMENTS WERE APPROVED FOR FINANCING BY THE PREDECESSOR AGENCY, THE INTERNATIONAL COOPERATION ADMINISTRATION (ICA) WITH LETTERS OF CREDIT IN AN AMOUNT OF $4,381,452.

YOU ARE CORRECT IN YOUR BELIEF THAT THE AID CLAIM ARISES--- BUT ONLY IN PART--- FROM AN AUDIT MADE BY OUR OFFICE IN 1959. WE REPORTED TO AID THAT MAIN WAS REIMBURSED FOR COSTS TOTALING $76,271 OR MORE, WHICH, IN OUR OPINION, WERE UNALLOWABLE OR OF QUESTIONABLE VALIDITY UNDER THE CONTRACT. WE ADVISED AID THAT THIS AMOUNT WAS COMPUTED ON A TEST OF PAYMENTS MADE TO SEVERAL OF MAIN'S EMPLOYEES; HOWEVER, WE NOTED ALSO THAT SIMILAR PAYMENTS WERE MADE TO OTHER EMPLOYEES, THE AMOUNTS OF WHICH WERE TO BE DETERMINED BY AID. ON DECEMBER 9, 1959, AID PRESENTED OUR AUDIT FINDINGS TO MAIN AND REQUESTED REFUND OF THE $76,271 AND ALSO ADVISED THAT THIS WAS A TENTATIVE AMOUNT AND THAT ADDITIONAL CLAIMS WOULD BE MADE ON THE BASIS OF FURTHER AUDIT. AID COMPLETED ITS AUDIT EARLY IN 1961, AND ON APRIL 24, 1962, ADVISED MAIN THAT ADMINISTRATIVE EXCEPTIONS IN THE AMOUNT OF $197,361.15 WERE TAKEN WITH RESPECT TO CERTAIN REIMBURSEMENTS PREVIOUSLY MADE UNDER THE CONTRACT. A BILL OF COLLECTION IN THAT AMOUNT WAS PRESENTED TO MAIN ON MARCH 14, 1963.

THE ITEMS COMPRISING THE CLAIM FOR REFUND, SHOWING AMOUNTS BASED ON OUR INTERIM AUDIT AND THE AID FINAL AUDIT, ARE AS FOLLOWS:

CHART

AMOUNT BASED ON AMOUNT BASED ON

ITEM GAO INTERIM AUDIT AID FINAL AUDIT 1. UNAUTHORIZED TERMINAL LEAVE $23,551.63 $66,410.41 2. OVERHEAD ON UNAUTHORIZED

TERMINAL LEAVE 9,185.14 21,724.09 3. OVERHEAD ON OVERSEAS

DIFFERENTIAL 17,000.00 51,524.47 4. DUPLICATE HIRING

9,963.00 9,963.00 5. UNAUTHORIZED PREPARATION TIME 7,500.00 7,500.00 6. OVERSEAS DIFFERENTIAL PAID

FOR WORK IN BOSTON 3,469.00 3,469.00 7. LIVING EXPENSE IN BOSTON NOT

AUTHORIZED BY CONTRACT 2,434.67 2,434.67 8. EXCESSIVE TRAVEL COST

2,253.03 2,253.03 9. EXCESSIVE VACATIONS ALLOWED 914.28 914.28 10. ADJUSTMENT-PROVISIONAL ACTUAL

OVERHEAD - 31,168.20

$76,270.75 $197,361.15

ITEMS 1 AND 2 TOTALING $88,134.50, REPRESENTING UNAUTHORIZED TERMINAL LEAVE PAYMENTS AND OVERHEAD ON SUCH TERMINAL LEAVE, WERE DISALLOWED--- NOTWITHSTANDING THE APPROVAL THEREOF BY ETIBANK--- FOR THE REASON THAT THE CONTRACT PROVIDED FOR SUCH PAYMENTS ONLY IN THE CASE OF INCOMPETENT EMPLOYEES AND NOT THOSE INVOLVED IN THE INSTANT PAYMENTS. THESE ITEMS AROSE UNDER TERMINATION AGREEMENTS BETWEEN ETIBANK, MAIN AND THE EMPLOYEES. ARTICLE XVII OF THE CONTRACT, AS AMENDED BY MODIFICATION NO. 2, AUTHORIZED TERMINAL LEAVE PAYMENTS ONLY IN THE CASE OF INCOMPETENT OR CARELESS EMPLOYEES, OR THOSE EMPLOYEES WHOSE CONTINUED EMPLOYMENT IS DEEMED INIMICAL BY ETIBANK TO ITS INTEREST. IT IS YOUR VIEW THAT THIS REPRESENTS A DISTORTED INTERPRETATION OF THE CONTRACT IN THAT IT PERMITTED PAYMENTS TO INCOMPETENT AND NOT TO COMPETENT EMPLOYEES WHO WERE TERMINATED NOT FOR MISCONDUCT, ETC.

GENERALLY, THE INTENTION OF THE PARTIES TO, AND THE MEANING OF, A CONTRACT ARE DEDUCED FROM THE LANGUAGE AND CONTENTS OF THE CONTRACT, AND WHERE--- AS HERE--- THE TERMS ARE PLAIN AND UNAMBIGUOUS, THE CONTRACT IS CONCLUSIVE. NEITHER THE COURTS NOR OUR OFFICE MAY READ WORDS INTO A CONTRACT WHICH IMPORT AN INTENT WHOLLY UNEXPRESSED THEREIN; RATHER, IT IS THE DUTY OF THE COURTS AND OUR OFFICE TO GIVE EFFECT TO THE CONTRACT AS MADE WITHOUT REGARD TO AN ALLEGED UNREASONABLENESS OF ITS TERMS. TAHIR ERK V. GLENN L. MARTIN CO., 32 F.SUPP. 722, 729; UNITED CARBON CO. V. MONROE, 92 F.SUPP. 460, 465; 17 C.J.S., CONTRACTS, SECTION 296. OUR DECISION AT 21 COMP. GEN. 466 IS NOT CONTROLLING HERE SINCE THAT DECISION DEALT WITH THE INTENDED MEANING OF THE TERMS "OTHER EXPENSES" IN CONNECTION WITH THE REIMBURSEMENT OF TRANSPORTATION AND TRAVELING EXPENSES OF EMPLOYEES. WE HELD THERE THAT AN ENUMERATION OF TRANSPORTATION,TRAVELING, HOTEL AND "OTHER EXPENSES" DID NOT PRECLUDE REIMBURSEMENT OF RELATED EXPENSES AS "OTHER EXPENSES.' THE CONTRACT HERE INVOLVED DOES NOT CONTAIN LANGUAGE WHICH IS SUSCEPTIBLE OF A SIMILAR INTERPRETATION. THE AFFIDAVIT OF THE PRESIDENT OF MAIN TO THE EFFECT THAT TERMINAL LEAVE PAYMENTS WERE THE USUAL PRACTICE OF MAIN PRIOR TO AND DURING THE CONTRACT PERIOD DOES NOT OVERCOME THE EXPRESS CONTRACT PROVISION WHICH LIMITED TERMINAL LEAVE TO INCOMPETENT EMPLOYEES ONLY. HAVE NO AUTHORITY TO SUBSTITUTE DIFFERENT CONTRACT LANGUAGE OR TO PLACE AN INCONSISTENT INTERPRETATION ON LANGUAGE PREVIOUSLY AGREED TO BY THE PARTIES. INASMUCH AS THE TERMINAL LEAVE REIMBURSEMENTS IN QUESTION WERE UNAUTHORIZED, ANY OVERHEAD EXPENSES ARISING FROM SUCH PAYMENTS LIKEWISE ARE UNAUTHORIZED.

ITEM 3 WAS INCLUDED AS A PART OF FIELD SALARIES IN COMPUTING OVERHEAD NOTWITHSTANDING THAT THE CONTRACT, AS AMENDED, DID NOT SPECIFICALLY PROVIDE FOR THE INCLUSION OF OVERSEAS DIFFERENTIAL IN THE OVERHEAD BASE FOR FIELD OPERATIONS. THE CONTRACT AS EXECUTED PROVIDED FOR APPLICATION OF THE OVERHEAD RATE TO BASIC OVERSEAS SALARIES. MODIFICATION NO. 1 TO THE CONTRACT PERMITTED THE INCLUSION OF OVERSEAS PREMIUM IN THE DIRECT SALARY BASE USED IN THE COMPUTATION OF OVERHEAD. LATER, HOWEVER, MODIFICATION NO. 3 AMENDED THE OVERHEAD PROVISIONS BUT IN DOING SO DID NOT INCLUDE OVERSEAS PREMIUMS IN THE TOTAL DOLLAR SALARIES TO BE USED AS A BASE FOR OVERHEAD COMPUTATIONS. FINALLY, UNDER MODIFICATION NO. 5, ALL PREVIOUS OVERHEAD PROVISIONS WERE DELETED AND A NEW SUBPARAGRAPH WAS ADDED WHICH ALSO OMITTED MENTION OF OVERSEAS PREMIUMS IN THE TOTAL DOLLAR SALARIES. HOWEVER, MODIFICATION NO. 5, WHICH MADE THE OVERHEAD PROVISIONS OF THE CONTRACT RETROACTIVE TO THE INCEPTION OF THE CONTRACT, DELETED ARTICLE X (3) OF THE CONTRACT RELATING TO BASIC SALARIES AND OVERSEAS PREMIUMS AND PROVIDED FOR REIMBURSEMENT OF FIELD SALARIES "INCLUDING OVERSEAS PREMIUMS.' ADDITIONALLY THAT MODIFICATION SET FORTH THE MONTHLY WAGE RATES OF KEY EMPLOYEES, INCLUDING OVERSEAS PREMIUM, AS PART OF SUCH RATES. WE FURTHER NOTE THAT THE INCLUSION OF OVERSEAS PREMIUM IN THE DIRECT SALARY BASE WAS INITIALLY AUTHORIZED IN MODIFICATION NO. 1 BUT REFERENCE THERETO WAS NOT SPECIFICALLY MADE IN SUBSEQUENT MODIFICATIONS. THE ONLY SPECIFIC CHANGES AS TO OVERHEAD SALARY ITEMS RELATED TO THE INCLUSION OR EXCLUSION FROM OVERHEAD COMPUTATIONS OF EMPLOYEE'S VACATION, HOLIDAY AND SICK LEAVE. SEE MODIFICATIONS NOS. 1, 3 AND 5. SINCE THE CONTRACT, AS AMENDED, AUTHORIZED REIMBURSEMENT TO MAIN OF "TOTAL DOLLAR SALARIES" PAID TO FIELD EMPLOYEES, AND SINCE THE CONTRACT OVERHEAD COMPUTATION PROVISIONS AUTHORIZED FIXED PERCENTAGES OF "TOTAL DOLLAR SALARIES" PAID TO FIELD EMPLOYEES, IT IS OUR VIEW THAT OVERHEAD COSTS WHICH INCLUDED PERCENTAGES OF OVERSEAS PREMIUMS WERE AUTHORIZED BY THE CONTRACT AS AMENDED. TO VIEW THE CONTRACT MODIFICATIONS AS PRECLUDING THE INCLUSION OF OVERSEAS PREMIUMS IN THE COMPUTATION OF THE OVERHEAD BURDEN WOULD, IN EFFECT, DENY FULL REIMBURSEMENT TO MAIN FOR SALARY COSTS INCURRED IN PERFORMING THE CONTRACT. HENCE, THE AMOUNT OF $51,524.47 IS NOT, IN OUR OPINION, REQUIRED TO BE REFUNDED TO AID.

CONCERNING ITEM 4, WE FEEL THAT MAIN WAS AT LEAST NEGLIGENT IN HIRING THIS EMPLOYEE FOR A POSITION WHICH IT KNEW WAS ALREADY OCCUPIED BY A QUALIFIED PERSON IN TURKEY. THIS EMPLOYEE PERFORMED NO SERVICES IN FURTHERANCE OF THE CONTRACT WORK AND THE RECORD REASONABLY ESTABLISHES THAT MAIN ASSUMED THE RISK IN SENDING AN UNNEEDED EMPLOYEE TO TURKEY. WE, THEREFORE, ARE OF THE VIEW THAT THE EXPENSES ($9,963) APPLICABLE TO THIS PERSON'S EMPLOYMENT WERE NOT REIMBURSABLE.

ITEM 5 RESPECTING COSTS ($7,500) REIMBURSED FOR NEW EMPLOYEES'SALARIES PRIOR TO REPORTING FOR DUTY AT MAIN'S HOME OFFICE WERE PROPERLY DISALLOWED. THESE COSTS WERE NOT SALARIES PAID TO EMPLOYEES DIRECTLY ENGAGED IN THE WORK OR FOR ACTUAL HOURS DIRECTLY EXPENDED ON THE PROJECT. SEE ARTICLES IX AND X OF THE CONTRACT WHICH CONTEMPLATED SALARY REIMBURSEMENT OF EMPLOYEES FROM DATE OF DEPARTURE FROM MAIN'S HOME OFFICE UNTIL RETURN TO THAT OFFICE. HENCE, REIMBURSEMENT OF THE AMOUNT OF $7,500 WAS UNAUTHORIZED. SEE 22 COMP. GEN. 425.

THE INCLUSION OF OVERSEAS DIFFERENTIAL ($3,469) IN EMPLOYEES' SALARIES WHILE WORKING AT MAIN'S HOME OFFICE WAS PATENTLY IMPROPER. SEE ARTICLE X (3) OF THE CONTRACT. THIS AMOUNT IDENTIFIED AS ITEM 6 WAS ERRONEOUSLY REIMBURSED TO MAIN.

ITEM 7 COVERS COSTS REIMBURSED MAIN FOR THE LIVING EXPENSES OF AN EMPLOYEE WHILE DETAINED AT THE HOME OFFICE AWAITING TRAVEL ORDERS FROM ETIBANK. WE UNDERSTAND THAT THESE EXPENSES ($2,434.67) RESULTED FROM ETIBANK'S DESIRE TO KEEP THE EMPLOYEE AT THE HOME OFFICE WHERE HE WORKED ON THE CONTRACT PROJECT. WHILE NOT ENTIRELY FREE FROM DOUBT, IT WOULD SEEM THAT THIS EXPENSE WAS INCURRED IN CONNECTION WITH, AND IN FURTHERANCE OF, THE PROJECT WORK. WE, THEREFORE, BELIEVE THAT REPAYMENT OF THIS AMOUNT IS NOT LEGALLY REQUIRED.

ITEM 8 REPRESENTS EXCESSIVE TRAVEL COSTS IN THE AMOUNT OF $2,253.03 REIMBURSED TO MAIN IN THE CASE OF THREE EMPLOYEES WHO TRAVELED TO TURKEY BY STEAMSHIP RATHER THAN BY AIR. TWO OF THESE EMPLOYEES' EMPLOYMENT AGREEMENTS PROVIDED FOR AIR TRAVEL ONLY AND THE THIRD TRAVELED BY STEAMSHIP ON THE CONDITION THAT HIS EXPENSES WOULD NOT EXCEED THOSE BY AIR. MAIN HAD BEEN PREVIOUSLY ADVISED BY ICA THAT REIMBURSEMENT OF COSTS FOR TRAVEL BY STEAMSHIP WOULD BE LIMITED TO THE EXPENSES OF AIR TRAVEL. IN THE ABSENCE OF AUTHORIZING LANGUAGE IN THE CONTRACT, THESE EXCESSIVE COST REIMBURSEMENTS FOR STEAMSHIP TRAVEL ARE FOR RECOVERY AS CONTRACT OVERPAYMENTS.

THE AMOUNT OF $914.28 (ITEM 9), REPRESENTING VACATION LEAVE GRANTED TO SEVEN OF MAIN'S EMPLOYEES, TOGETHER WITH THE OVERHEAD THEREON, WAS EXCESSIVE AND REIMBURSEMENT THEREOF WAS NOT AUTHORIZED BY THE CONTRACT. UNDER CLAUSE NO. 5 OF TURKEY FIELD OFFICE EMPLOYEES' AGREEMENTS, EMPLOYEES WERE ALLOWED TWO WEEK'S VACATION PAY ONLY AFTER THEY SERVED A CONTINUOUS 12 MONTHS PERIOD IN TURKEY. THESE SEVEN EMPLOYEES WERE GRANTED VACATION LEAVE IN EXCESS OF THE BALANCE DUE THEM UNDER THE AGREEMENT. WHILE THE VACATION LEAVE PROVIDED BY THE TERMINATION AGREEMENT IN EACH CASE EXCEEDED THE BALANCE OF VACATION LEAVE TO WHICH THEY WERE ENTITLED UNDER ARTICLE X (8) OF THE CONTRACT AS AMENDED, THE AGREEMENTS WERE NOT APPROVED, AS REQUIRED, EITHER BY ICA OR THE UNITED STATES MISSION TO TURKEY. THEREFORE, THIS AMOUNT WAS NOT PROPERLY FOR REIMBURSEMENT TO MAIN.

ITEM 10 REPRESENTS AN ADJUSTMENT MADE BY THE AID AUDITORS TO ADJUST THE PROVISIONAL OVERHEAD TO ACTUAL OVERHEAD FOR THE PERIOD JANUARY 1, 1956, THROUGH MARCH 31, 1958, IN THE AMOUNT OF $31,168.20. THIS ADJUSTMENT WAS REQUIRED IN ORDER TO ASSURE THAT REIMBURSEMENT OF OVERHEAD WAS LIMITED TO ACTUAL COSTS. THIS RETROACTIVE ADJUSTMENT OF THE OVERHEAD RATES WAS IN ACCORDANCE WITH MODIFICATION NO. 3 TO THE CONTRACT AND OUR DECISION AT 35 COMP. GEN. 434.

TURNING TO THE ARGUMENTS ADVANCED BY YOU IN SUPPORT OF YOUR POSITION THAT THE GOVERNMENT CLAIM FOR REFUND IS LEGALLY DEFICIENT, WE HAVE CAREFULLY CONSIDERED THE BRIEF AND SUPPLEMENTARY PAPERS FILED BY YOU BUT WE ARE UNABLE TO AGREE THAT THE GOVERNMENT'S CLAIM IS WITHOUT LEGAL MERIT.

IT IS YOUR VIEW THAT THE GOVERNMENT IS NOT ENTITLED TO REFUND BECAUSE THE BASIC CONTRACT VESTED ALL POWER TO APPROVE CONTRACT REIMBURSEMENTS IN ETIBANK AND BECAUSE THE GOVERNMENT WAS NOT A PARTY TO THE CONTRACT. ALSO, IT IS CONTENDED THAT THE CERTIFICATIONS ON THE SUPPLIER'S CERTIFICATE THAT MAIN WAS "ENTITLED UNDER THE CONTRACT TO THE PAYMENT OF THE SUM CLAIMED" DO NOT AFFORD A BASIS FOR THE CLAIM. IT IS FURTHER ARGUED THAT THE PRINCIPLES OF RESTITUTION DO NOT JUSTIFY THE CLAIM; THAT THE GOVERNMENT IS NOW ESTOPPED BY LACHES FROM CLAIMING REFUND; THAT IF MAIN IS COMPELLED TO MAKE THE REFUND IT WILL BE ENTITLED TO SEEK INDEMNIFICATION FROM ETIBANK; AND THAT THE QUESTION REIMBURSEMENTS DETAILED ABOVE WERE PROPER AND REASONABLE IN ALL RESPECTS.

CONCERNING THE FINALITY OF APPROVAL OF REIMBURSEMENTS BY ETIBANK, THERE IS FOR CONSIDERATION THE INTRODUCTORY LANGUAGE OF ARTICLE IX OF THE CONTRACT. "1 - IN ADDITION TO THE PAYMENT OF THE FIXED-FEE AS SPECIFIED HEREIN, THE ENGINEER (MAIN) WILL BE REIMBURSED FOR SUCH OF HIS ACTUAL EXPENDITURES IN THE PERFORMANCE OF WORK AS MAY BE APPROVED OR RATIFIED BY THE OWNER (ETIBANK) * * *:"

THE GOVERNMENT WAS NOT CONNECTED WITH THE SARIYAR PROJECT UNTIL MODIFICATION NO. 1 WAS EXECUTED ON DECEMBER 15, 1950. PRIOR TO THE EXECUTION OF THIS MODIFICATION, THE GOVERNMENT MADE A COMPLETE REVIEW OF THE BASIC CONTRACT AND SUGGESTED CHANGES THEREIN WHICH WERE ADOPTED. ADDITIONALLY, THE GOVERNMENT REVIEWED MAIN'S BOOKS AND MADE REDETERMINATIONS WITH RESPECT TO OVERHEAD RATES WHICH WOULD BE PAID TO MAIN UNDER THE CONTRACT. MODIFICATION NO. 1 PROVIDED THAT ALL PAYMENTS TO MAIN FOR DOLLAR REIMBURSABLE EXPENDITURES OR THE DOLLAR FEE WOULD BE MADE IN UNITED STATES CURRENCY OR IN TURKISH LIRA CONVERTIBLE INTO UNITED STATES CURRENCY UNDER A GUARANTEE OF CONVERTIBILITY ISSUED BY ICA; THAT MAIN WOULD BE ABLE TO MAKE MONTHLY WITHDRAWALS FROM THE LETTER OF CREDIT UPON PRESENTATION TO THE BANK OF DOCUMENTATION IN ACCORDANCE WITH ICA REGULATIONS. BY MODIFICATION NO. 2 MAIN WAS REQUIRED TO CLEAR FUNDS FOR PURCHASES WITH ICA'S SUCCESSOR AGENCY, FOREIGN OPERATIONS ADMINISTRATION (FOA), PROMPTLY AS THE NEEDS AROSE. MODIFICATION NO. 3 REQUIRED MAIN TO CLEAR ALL PERSONNEL WITH FOA, INCLUDING SALARIES AND ALL TRANSPORTATION COSTS. ALSO, A PROVISION WAS INCORPORATED INTO THE CONTRACT FOR REVIEW OF MAIN'S BOOK BY FOA TO PERMIT REVISION OF THE OVERHEAD RATES. WHILE THE LANGUAGE OF ARTICLE IX, QUOTED ABOVE, WAS NOT CHANGED, IT SHOULD BE NOTED THAT ETIBANK'S APPROVAL WENT TO "ACTUAL EXPENDITURES IN THE PERFORMANCE OF THE WORK.' THAT IS TO SAY, ETIBANK'S APPROVAL WAS FINAL SO LONG AS THE REIMBURSEMENTS WERE WITHIN THE FOUR CORNERS OF THE CONTRACT. BUT SUCH PROVISION, IN THE LIGHT OF THE CONTRACT MODIFICATIONS, DID NOT AUTHORIZE REIMBURSEMENT OF COSTS WHICH WERE BEYOND THE SCOPE OF THE CONTRACT. THE AUTHORITY VESTED IN ETIBANK TO APPROVE THOSE ACTUAL EXPENDITURES INCURRED BY MAIN IN CONNECTION WITH THE PERFORMANCE OF THE CONTRACT AS REIMBURSABLE ITEMS OF COST WAS NOT AN UNLIMITED AUTHORITY. AND WHEN ETIBANK'S APPROVAL WAS CONTRARY TO THE MANDATE OF THE CONTRACT, IT WAS THE DUTY OF THE ADMINISTERING AGENCY TO QUESTION SUCH APPROVAL. THE FACT THAT THE EXPENDITURES WERE APPROVED FOR REIMBURSEMENT BY ETIBANK DID NOT SHIFT FROM MAIN TO THE GOVERNMENT THE CONSEQUENCES OF MAIN'S ACTIONS WHICH RESULTED IN THE GOVERNMENT HAVING TO BEAR A FINANCIAL BURDEN NOT CONTEMPLATED BY THE CONTRACT. THE CASES CITED BY YOU CONCERNING THE FINALITY OF APPROVALS BY ONE AGENCY OVER OBJECTION BY ANOTHER AGENCY ARE INAPPLICABLE SINCE THE AGENCY CHARGED WITH THE SUPERVISION OF THE CONTRACT HAS DETERMINED THAT CERTAIN APPROVALS OF REIMBURSEMENTS BY ITS CONTRACTING OFFICER (ETIBANK) WERE OUTSIDE OF THE SCOPE OF THE CONTRACT. THIS IS A FUNCTION INHERENT IN ANY AGENCY WHICH DELEGATES ITS PRIMARY CONTRACTING RESPONSIBILITY TO ANOTHER AUTHORITY TO QUESTION THAT AUTHORITY'S DETERMINATIONS OF REIMBURSABILITY OF CONTRACT COSTS. ALSO, THE CASES CITED BY YOU DO NOT STAND FOR THE PROPOSITION THAT A CONTRACTING OFFICER OR OTHER OFFICIAL DESIGNATED TO APPROVE EXPENDITURES UNDER A COST-TYPE CONTRACT MAY, BY THE MERE APPROVAL OF AN ITEM, OBLIGATE THE GOVERNMENT TO PAY AN EXPENSE WHICH, UNDER THE TERMS OF THE CONTRACT, IS NOT REQUIRED TO BE BORNE BY THE GOVERNMENT.

WE DO NOT AGREE THAT A LACK OF PRIVITY OF CONTRACT PRECLUDES THE CORRECTION ACTION UNDERTAKEN BY AID. IT IS EVIDENT THAT THE CONTRACT WAS FINANCED FROM FUNDS MADE AVAILABLE TO AID AND ITS PREDECESSOR AGENCIES TO ASSIST IN THE ECONOMIC DEVELOPMENT OF NATO COUNTRIES. THAT THE GOVERNMENT, THROUGH ICA, FOA, AND AID, WAS AN INDISPENSABLE PARTY TO THE CONTRACT IS EVIDENT FROM THE CONTRACT MODIFICATIONS THEMSELVES, THE REQUIREMENT FOR GOVERNMENT AUDIT, OVERHEAD COST REDETERMINATIONS, AND THE FACT THAT THE CONTRACT REPRESENTED AN OPERATION UNDER THE ECONOMIC ASSISTANCE PROGRAM AUTHORIZED AND FUNDED BY THE CONGRESS.

TURNING TO THE SUPPLIER'S CERTIFICATE, IT IS OBVIOUS THAT THE CERTIFICATION WAS INTENDED TO ESTABLISH A SEPARATE OBLIGATION OF MAIN TO THE GOVERNMENT IN THE EVENT OF ERROR OR MISTAKE. EVEN IF A CERTIFICATION WAS MADE IN GOOD FAITH, SUCH FACT IS IMMATERIAL SINCE THE GOVERNMENT MAY ALWAYS RECOVER MONEYS IMPROPERLY PAID. FANSTEEL METALLURGICAL CORPORATION V. UNITED STATES, 172 F.SUPP. 268, 270.

WE HAVE CONSIDERED THE OTHER ARGUMENTS ADVANCED BUT WE SEE NO LEGAL BASIS FOR OBJECTING TO THE COLLECTION ACTION UNDERTAKEN BY AID. NEITHER DO WE FEEL THAT THE GOVERNMENT'S CLAIM IS BARRED BY LACHES OR THAT IT IS NOW ESTOPPED TO ASSERT ITS CLAIM. SEE THE FANSTEEL CASE, SUPRA.

ACCORDINGLY, WE FIND NO LEGAL BASIS TO RELIEVE MAIN FROM ITS OBLIGATION TO REFUND THE SUM OF $143,402.01 AS CLAIMED BY AID AND AS HEREIN ADJUSTED.