A-26593, APRIL 16, 1929, 8 COMP. GEN. 671

A-26593: Apr 16, 1929

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CONTRACTS - INCREASED AND DECREASED COSTS - WAGE SCALE ADJUSTMENTS WHERE THERE IS AN INCREASE IN THE WAGE SCALE IN THE MINING OF COAL. IF THE CLAIM IS OTHERWISE PROPER. WHERE THERE IS A DECREASE IN THE WAGE SCALE IN THE MINING OF COAL. RESULT IN LOSS OF DISCOUNTS IN MANY INSTANCES AND WOULD TO THAT EXTENT HAVE AN UNFAVORABLE EFFECT ON THE TRANSACTION OF GOVERNMENT BUSINESS.'. WHERE CLAIM IS MADE FOR AN AMOUNT GREATER THAN SHOWN IN THE CONTRACT. THE DISBURSING OFFICER WILL. IF THE CLAIM IS OTHERWISE PROPER. WILL LEAVE THE CONTRACTOR TO CLAIM FROM THE GENERAL ACCOUNTING OFFICE ANY EXCESS AMOUNT TO WHICH HE CONSIDERS HIMSELF ENTITLED. B. WHERE CLAIM IS MADE FOR AN AMOUNT LESS THAN CONTRACT PRICE.

A-26593, APRIL 16, 1929, 8 COMP. GEN. 671

CONTRACTS - INCREASED AND DECREASED COSTS - WAGE SCALE ADJUSTMENTS WHERE THERE IS AN INCREASE IN THE WAGE SCALE IN THE MINING OF COAL, AND THE CONTRACT, SUCH AS THE STANDARD GOVERNMENT FORM OF CONTRACT FOR THE PURCHASE OF COAL, PROVIDES FOR AN INCREASE IN THE CONTRACT PRICE DUE TO THE INCREASE IN WAGES, THE DISBURSING OFFICER MAY, IF THE CLAIM IS OTHERWISE PROPER, MAKE PAYMENT AT THE CONTRACT PRICE TAKING ADVANTAGE OF ANY DISCOUNT OFFERED, LEAVING THE CONTRACTOR TO FILE CLAIM IN THE GENERAL ACCOUNTING OFFICE FOR ANY EXCESS AMOUNT TO WHICH HE CONSIDERS HIMSELF ENTITLED. WHERE THERE IS A DECREASE IN THE WAGE SCALE IN THE MINING OF COAL, AND THE CONTRACT, SUCH AS THE STANDARD GOVERNMENT FORM OF CONTRACT FOR THE PURCHASE OF COAL, PROVIDES FOR A DECREASE IN THE CONTRACT PRICE DUE TO THE DECREASE IN WAGES, THE DISBURSING OFFICER MAY PAY SUCH AMOUNT LESS THAN THE CONTRACT PRICE AS APPEARS CLEARLY DUE UNDER THE DECREASED COST OF PRODUCTION SHOWN, TAKING ADVANTAGE OF ANY OFFERED DISCOUNTS, LEAVING THE CONTRACTOR TO FILE CLAIM IN THE GENERAL ACCOUNTING OFFICE FOR ANY ADDITIONAL AMOUNT TO WHICH HE CONSIDERS HIMSELF ENTITLED. 8 COMP. GEN. 512 AMPLIFIED.

COMPTROLLER GENERAL MCCARL TO THE SECRETARY OF WAR, APRIL 16, 1929:

THERE HAS BEEN RECEIVED IN REFERENCE TO LETTER DATED FEBRUARY 12, 1929, OF THIS OFFICE TO E. DWORAK, MAJOR, FINANCE DEPARTMENT, UNITED STATES ARMY, CONCERNING THE AUDIT AND SETTLEMENT OF HIS ACCOUNTS CONTAINING PAYMENTS MADE UNDER PARAGRAPH 3 OF THE "QUARTERMASTER CORPS PURCHASE CONDITIONS" INCORPORATED IN CONTRACTS FOR THE PURCHASE OF COAL, YOUR LETTER OF MARCH 19, 1929, TO THE EFFECT INSTRUCTIONS HAD BEEN ISSUED THAT HEREAFTER THE VOUCHERS SHOULD CONTAIN A CERTIFICATE AS TO WHETHER THERE HAS OR HAS NOT BEEN A REDUCTION IN THE COST OF PRODUCTION OF THE COAL DELIVERED DUE TO CHANGES IN THE WAGE SCALE, AND REQUESTING DECISION WHETHER ALL VOUCHERS SHOWING A PRICE OTHER THAN THAT STATED IN THE CONTRACT SHOULD BE SUBMITTED TO THIS OFFICE FOR DIRECT SETTLEMENT. YOU REPORT IF SUCH PROCEDURE "BE PUT INTO OPERATION THAT THE DELAY IN PAYMENT INCIDENT THERETO WOULD, NECESSARILY, RESULT IN LOSS OF DISCOUNTS IN MANY INSTANCES AND WOULD TO THAT EXTENT HAVE AN UNFAVORABLE EFFECT ON THE TRANSACTION OF GOVERNMENT BUSINESS.'

YOU SUGGEST THAT THE FOLLOWING PROCEDURE BE APPROVED IN MAKING PAYMENTS WHERE THERE HAS BEEN AN INCREASE OR DECREASE IN THE CONTRACT PRICE OF COAL DUE TO THE CHANGE IN THE WAGE SCALE:

A. WHERE CLAIM IS MADE FOR AN AMOUNT GREATER THAN SHOWN IN THE CONTRACT, DUE TO ALLEGED INCREASES IN COST OF PRODUCTION, THE DISBURSING OFFICER WILL, IF THE CLAIM IS OTHERWISE PROPER, MAKE PAYMENT AT THE CONTRACT PRICE TAKING ADVANTAGE OF ANY DISCOUNTS OFFERED, AND WILL LEAVE THE CONTRACTOR TO CLAIM FROM THE GENERAL ACCOUNTING OFFICE ANY EXCESS AMOUNT TO WHICH HE CONSIDERS HIMSELF ENTITLED.

B. WHERE CLAIM IS MADE FOR AN AMOUNT LESS THAN CONTRACT PRICE, THE DISBURSING OFFICER WILL PAY THE AMOUNT CLAIMED, IF THE CLAIM IS OTHERWISE PROPER, OR SUCH LESSER AMOUNT AS THE DISBURSING OFFICER MAY CONSIDER DUE UNDER THE DECREASED COST OF PRODUCTION SHOWN, TAKING ADVANTAGE IN EITHER CASE OF ANY OFFERED DISCOUNTS, AND WILL LEAVE THE CONTRACTOR TO CLAIM FROM THE GENERAL ACCOUNTING OFFICE ANY EXCESS AMOUNT TO WHICH HE CONSIDERS HIMSELF ENTITLED. THE OLD FORMS OF CONTRACTS CONTAINING THE "QUARTERMASTER CORPS PURCHASE CONDITIONS" REFERRED TO IN THE LETTER OF FEBRUARY 12, 1929, OF THIS OFFICE, HAS BEEN SUPERSEDED FOR FUTURE CONTRACTS BY A STANDARD FORM OF CONTRACT FOR THE PURCHASE OF COAL WHICH HAS BEEN APPROVED BY THE PRESIDENT FOR USE THROUGHOUT THE GOVERNMENT SERVICES. THERE IS INCLOSED HEREWITH FOR YOUR INFORMATION A COPY OF DECISION DATED APRIL 1, 1929, A-26341, 8 COMP. GEN. 512, OF THIS OFFICE, WHEREIN THERE WAS CONTRASTED THE REQUIREMENTS UNDER THE OLD FORM OF CONTRACT AND UNDER PARAGRAPH 3 OF THE STANDARD FORM OF GOVERNMENT CONTRACT FOR THE PURCHASE OF COAL, AND YOUR ATTENTION IS PARTICULARLY INVITED TO THE PARAGRAPH IN SAID LETTER, AS FOLLOWS:

IT APPEARS IN THIS PARTICULAR CASE THAT CONTRACTOR HAS SUBMITTED AN AFFIDAVIT SHOWING THE NEW WAGE SCALE AGREEMENT BETWEEN THE MINERS AND THE COAL COMPANY, TOGETHER WITH A "COMPARISON OF THE OLD SCALE OF WAGES AND THE NEW SCALE OF WAGES" AS APPLIED TO THE "MINE" FROM WHICH THE CONTRACT COAL WAS SECURED. IT IS UNDERSTOOD THAT THE BUREAU OF MINES, DEPARTMENT OF COMMERCE, HAS EMPLOYEES IN THE VARIOUS COAL FIELDS, AND THAT THE CORRECTNESS OF THE AFFIDAVIT MAY BE CHECKED BY REFERENCE OF SAME TO THE EMPLOYEE OF THE BUREAU OF MINES LOCATED IN THE DISTRICT WHERE THE COAL WAS SECURED. IN PROPER CASES, WHERE THERE IS ANY REASON TO DOUBT THE CORRECTNESS OF THE AFFIDAVIT, A GOVERNMENT EMPLOYEE MAY BE DETAILED TO EXAMINE THE BOOKS OF THE CONTRACTOR TO DETERMINE WHETHER THE AFFIDAVIT IS CORRECT SUCH PROCEDURE SHOULD BE FOLLOWED IN DETERMINING ANY DECREASE IN THE PRICE OF COAL UNDER THE STANDARD FORM OF CONTRACT AND THE VOUCHERS ON WHICH PAYMENT HAS BEEN MADE FOR THE COAL SHOULD BE SUPPORTED BY THE AFFIDAVIT OF THE CONTRACTOR AND A REPORT, WHERE PRACTICABLE, FROM THE BUREAU OF MINES EMPLOYEE AS TO THE CORRECTNESS OF THE AFFIDAVIT. WHERE THE AMOUNT INVOLVED IS CONSIDERABLE AND APPROPRIATIONS THEREFOR WOULD PERMIT, AN INDEPENDENT EXAMINATION SHOULD BE MADE OF THE CONTRACTOR'S BOOKS BY AN EMPLOYEE OF THE GOVERNMENT WHEN THE CONTRACT PRICE IS REDUCED DUE TO A DECREASE IN THE WAGE SCALE. IT IS UNDERSTOOD, OF COURSE, THAT IN EVENT OF CHANGE IN THE CONTRACT PRICE BECAUSE OF CHANGE IN THE WAGE SCALE, NO PAYMENT IN EVENT OF A DECREASE IN CONTRACT PRICE MAY BE MADE UNTIL THE NEW CONTRACT PRICE HAS BEEN DETERMINED AND THE VOUCHERS ON WHICH SUCH PAYMENTS ARE MADE ARE SUPPORTED AS HEREIN STATED.

IF DEEMED ADMINISTRATIVELY DESIRABLE, THERE APPEAR NO OBJECTIONS TO THE ADOPTION OF THE PROCEDURE SUGGESTED BY YOU, BUT IT IS IMPORTANT FOR THE PROMPT AND ORDERLY RENDITION AND SETTLEMENT OF ACCOUNTS AND CLAIMS ARISING UNDER THE CONTRACTS THAT ANY VOUCHERS SHOWING INCREASES IN THE PRICE OF COAL DUE TO INCREASE IN WAGE SCALE TRANSMITTED FOR DIRECT SETTLEMENT BE SUPPORTED BY THE AFFIDAVIT OF THE SUPERINTENDENT OR CORRESPONDING OFFICERS OF THE MINES FROM WHICH THE COAL WAS PRODUCED AND REPORT OF A CERTIFIED PUBLIC ACCOUNTANT SHOWING THE COST OF MINING THE COAL BEFORE THE INCREASE IN THE WAGE SCALE, THE AMOUNT OF THE INCREASE IN THE WAGE SCALE AFTER THE DATE OF OPENING OF BIDS, AND AMOUNT OF SUCH INCREASE APPLICABLE TO THE COAL DELIVERED UNDER THE CONTRACT AFTER DATE OF SUCH INCREASE. IT IS EQUALLY IMPORTANT THAT ALL TRANSMITTED VOUCHERS WHERE THE CONTRACT PRICE IS REDUCED ON ACCOUNT OF THE DECREASE IN THE WAGE SCALE AND WHEREON ARE CLAIMED DIFFERENCES BETWEEN THE AMOUNT PAID BY THE FINANCE OFFICER AND THE AMOUNT ALLEGED BY THE CONTRACTOR TO BE THE PROPER REDUCED PRICE SHOULD BE SUPPORTED IN ACCORDANCE WITH THE FOREGOING EXTRACT FROM THE DECISION DATED APRIL 1, 1929.