A-23641, JULY 21, 1928, 8 COMP. GEN. 25

A-23641: Jul 21, 1928

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CONTRACTS - SOVEREIGN CAPACITY - WORKMEN'S COMPENSATION INSURANCE - ARLINGTON MEMORIAL BRIDGE COMMISSION THE UNITED STATES AS A CONTRACTOR IS NOT LIABLE IN DAMAGES OR OTHERWISE FOR ITS ACTS IN ITS SOVEREIGN CAPACITY. THAT IS. IT IS SETTLED THAT A CONTRACT MAY NOT BE MODIFIED PREJUDICIAL TO THE UNITED STATES WITHOUT ADEQUATE CONSIDERATION THEREFOR. IS A GENERAL STATUTE APPLICABLE TO ALL PERSONS DOING BUSINESS IN THE DISTRICT OF COLUMBIA INCLUDED WITHIN ITS TERMS AND IT CAN NOT BE CONSIDERED A "CHANGE" WITHIN THE MEANING OF ARTICLE 3 OF THE CONTRACT. IT IS EQUALLY WELL SETTLED THAT THE CHARACTER OF THE UNITED STATES AS SOVEREIGN AND AS CONTRACTOR ARE SEPARATE AND DISTINCT AND THAT THE UNITED STATES.

A-23641, JULY 21, 1928, 8 COMP. GEN. 25

CONTRACTS - SOVEREIGN CAPACITY - WORKMEN'S COMPENSATION INSURANCE - ARLINGTON MEMORIAL BRIDGE COMMISSION THE UNITED STATES AS A CONTRACTOR IS NOT LIABLE IN DAMAGES OR OTHERWISE FOR ITS ACTS IN ITS SOVEREIGN CAPACITY, AND A GOVERNMENT CONTRACT FOR WORK IN THE DISTRICT OF COLUMBIA MAY NOT BE AMENDED SO AS TO IMPOSE ON THE UNITED STATES THE COST OF WORKMEN'S COMPENSATION INSURANCE OCCASIONED THE CONTRACTOR PERFORMING THE WORK BY REASON OF THE ACT OF MAY 17, 1928, 45 STAT. 600.

COMPTROLLER GENERAL MCCARL TO COL. U. S. GRANT, 3D, UNITED STATES ARMY, EXECUTIVE AND DISBURSING OFFICER, ARLINGTON MEMORIAL BRIDGE COMMISSION, JULY 21, 1928:

THERE HAS BEEN RECEIVED YOUR LETTER OF JULY 7, 1928, INCLOSING COPY OF LETTER DATED JUNE 30, 1928, FROM THE HUNKIN-CONKEY CONSTRUCTION CO. RELATIVE TO ITS CONTRACT A.M.B. 16, DATED JANUARY 17, 1928, WITH THE ARLINGTON MEMORIAL BRIDGE COMMISSION FOR THE CONSTRUCTION OF THE SUPERSTRUCTURE OF THE ARLINGTON MEMORIAL BRIDGE, EXCLUSIVE OF THE BASCULE DRAW SPAN, AND WHEREIN THE CONTRACTOR ALLEGES THAT THE ACT OF MAY 17, 1928, 45 STAT. 600, EXTENDING, EFFECTIVE JULY 1, 1928, THE PROVISIONS OF THE "LONGSHOREMEN'S AND HARBOR WORKERS' COMPENSATION ACT" OF MARCH 4, 1927, 44 STAT. 1424, 1446, TO THE DISTRICT OF COLUMBIA WOULD INCREASE ITS EXPENDITURE APPROXIMATELY $25,000 ON ACCOUNT OF WORKMEN'S COMPENSATION INSURANCE. YOU REQUEST DECISION WHETHER THE CONTRACT MAY BE AMENDED SO AS TO ALLOW THE CONTRACTOR ANY INCREASED COST OCCASIONED THEREBY, THAT IS, A SUM IN ADDITION TO THE COMPENSATION OF $1,576,686 STIPULATED IN THE CONTRACT AS A FIXED SUM FOR THE DOING OF THE WORK.

IT IS SETTLED THAT A CONTRACT MAY NOT BE MODIFIED PREJUDICIAL TO THE UNITED STATES WITHOUT ADEQUATE CONSIDERATION THEREFOR. SEE PREIS AND CO. V. UNITED STATES, 58 CT.CLS. 81. THE ACT OF MAY 17, 1928, IS A GENERAL STATUTE APPLICABLE TO ALL PERSONS DOING BUSINESS IN THE DISTRICT OF COLUMBIA INCLUDED WITHIN ITS TERMS AND IT CAN NOT BE CONSIDERED A "CHANGE" WITHIN THE MEANING OF ARTICLE 3 OF THE CONTRACT. IT IS EQUALLY WELL SETTLED THAT THE CHARACTER OF THE UNITED STATES AS SOVEREIGN AND AS CONTRACTOR ARE SEPARATE AND DISTINCT AND THAT THE UNITED STATES, AS A CONTRACTOR, IS NOT RESPONSIBLE IN DAMAGES BECAUSE OF ITS ACTS IN ITS SOVEREIGN CAPACITY. THE MATTER WAS CONSIDERED BY THE SUPREME COURT OF THE UNITED STATES IN HOROWITZ V. UNITED STATES, 267 U.S. 458, AND BY THE CIRCUIT COURT OF APPEALS IN MAXWELL V. UNITED STATES, 3 FED.REP. (2D) 906. THE COURT SAID IN THE FIRST-NAMED CASE, IN SUPPORT OF ITS CONCLUSION TO THE EFFECT THE UNITED STATES AS A CONTRACTOR WAS NOT RESPONSIBLE FOR ITS ACTS IN ITS SOVEREIGN CAPACITY, THAT:

IT HAS LONG BEEN HELD BY THE COURT OF CLAIMS THAT THE UNITED STATES WHEN SUED AS A CONTRACTOR CANNOT BE HELD LIABLE FOR AN OBSTRUCTION TO THE PERFORMANCE OF THE PARTICULAR CONTRACT RESULTING FROM ITS PUBLIC AND GENERAL ACTS AS A SOVEREIGN. DEMING V. UNITED STATES, 1 CT.CL. 190, 191; JONES V. UNITED STATES, 1 CT.CLS. 383, 384; WILSON V. UNITED STATES, 11 CT.CLS. 513, 520. IN THE JONES CASE, SUPRA, THE COURT SAID: "THE TWO CHARACTERS WHICH THE GOVERNMENT POSSESSES AS A CONTRACTOR AND AS A SOVEREIGN CANNOT BE THUS FUSED; NOR CAN THE UNITED STATES WHILE SUED IN THE ONE CHARACTER BE MADE LIABLE IN DAMAGES FOR THEIR ACTS DONE IN THE OTHER. WHATEVER ACTS THE GOVERNMENT MAY DO, BE THEY LEGISLATIVE OR EXECUTIVE, SO LONG AS THEY BE PUBLIC AND GENERAL, CANNOT BE DEEMED SPECIALLY TO ALTER, MODIFY, OBSTRUCT, OR VIOLATE THE PARTICULAR CONTRACTS, INTO WHICH IT ENTERS WITH PRIVATE PERSONS. * * * IN THIS COURT, THE UNITED STATES APPEAR SIMPLY AS CONTRACTORS; AND THEY ARE TO BE HELD LIABLE ONLY WITHIN THE SAME LIMITS THAT ANY OTHER DEFENDANT WOULD BE IN ANY OTHER COURT. THOUGH THEIR SOVEREIGN ACTS PERFORMED FOR THE GENERAL GOOD MAY WORK INJURY TO SOME PRIVATE CONTRACTORS, SUCH PARTIES GAIN NOTHING BY HAVING THE UNITED STATES AS THEIR DEFENDANTS.'

THERE IS NOTHING IN EITHER THE CONTRACT OF JANUARY 17, 1928, OR IN THE ACT OF MAY 17, 1928, TO ALTER THE RULE STATED BY THE COURT OF CLAIMS AND SUBSEQUENTLY APPROVED BY THE SUPREME COURT OF THE UNITED STATES THAT THE GOVERNMENT WAS NOT LIABLE AS A CONTRACTOR FOR ITS ACTS IN ITS SOVEREIGN CAPACITY AND, THEREFORE, THERE BEING NO LIABILITY ON THE GOVERNMENT AS A CONTRACTOR FOR THE ENACTMENT OF THE ACT OF MAY 17, 1928, THERE IS NEITHER EQUITABLE NOR LEGAL LIABILITY ON THE UNITED STATES AS A CONTRACTOR TO PAY ANY INCREASED WORKMEN'S COMPENSATION INSURANCE WHICH THE HUNKIN-CONKEY CONSTRUCTION CO. MAY BE REQUIRED TO PAY IN CONNECTION WITH THIS WORK ON THE ARLINGTON MEMORIAL BRIDGE.

ACCORDINGLY, YOU ARE ADVISED THAT YOU ARE NOT AUTHORIZED TO MODIFY THE CONTRACT OF JANUARY 17, 1928, SO AS TO IMPOSE ON THE UNITED STATES ANY PART OF THE INCREASED COST OCCASIONED THE CONTRACTOR BY REASON OF THE ACT OF MAY 17, 1928.