A-43786, AUGUST 6, 1932, 12 COMP. GEN. 192

A-43786: Aug 6, 1932

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THE CASH ALLOWANCES ARE NOT REQUIRED TO BE REDUCED TEN PERCENTUM UNDER SECTION 320 OF THE ACT OF JUNE 30. ANY CHANGES UNDER SAID CONTRACTS OR SAVINGS IN SUCH CASH ALLOWANCES ARE SUBJECT TO SAID SECTION. AS FOLLOWS: REFERENCE IS MADE TO SECTION 320 OF PUBLIC ACT NO. 212 AS SIGNED BY THE PRESIDENT UNDER DATE OF JUNE 30. ARE HEREBY AMENDED TO PROVIDE FOR A REDUCTION OF 10 PERCENTUM OF THE LIMIT OF COST AS FIXED IN SUCH AUTHORIZATION. AS TO SUCH PROJECTS WHERE A CONTRACT HAS BEEN MADE AT A COST LESS THAN THAT UPON WHICH THE AUTHORIZATION WAS BASED. BOTH OF WHICH WERE ENTERED INTO PRIOR TO JULY 1. THERE ARE SUPPLEMENTARY CONTRACTS TO BE ENTERED INTO BETWEEN THE GENERAL CONTRACTORS FOR THESE CONSTRUCTIONS AND SUBCONTRACTORS.

A-43786, AUGUST 6, 1932, 12 COMP. GEN. 192

ECONOMY ACT - CONTRACTS - REDUCTIONS WHERE CONTRACTS FOR CONSTRUCTION WORK HAD BEEN LET PRIOR TO JUNE 30, 1932, BASED ON EXISTING AUTHORIZATIONS, AND CONTAINING STIPULATIONS FOR CASH ALLOWANCES, THE CASH ALLOWANCES ARE NOT REQUIRED TO BE REDUCED TEN PERCENTUM UNDER SECTION 320 OF THE ACT OF JUNE 30, 1932, 47 STAT. 412, BUT ANY CHANGES UNDER SAID CONTRACTS OR SAVINGS IN SUCH CASH ALLOWANCES ARE SUBJECT TO SAID SECTION.

COMPTROLLER GENERAL MCCARL TO THE SECRETARY OF STATE, AUGUST 6, 1932:

THERE HAS BEEN RECEIVED YOUR LETTER OF AUGUST 1, 1932, AS FOLLOWS:

REFERENCE IS MADE TO SECTION 320 OF PUBLIC ACT NO. 212 AS SIGNED BY THE PRESIDENT UNDER DATE OF JUNE 30, 1932, WHICH READS AS FOLLOWS:

"AUTHORIZATIONS HERETOFORE GRANTED BY LAW FOR THE CONSTRUCTION OF PUBLIC BUILDINGS AND PUBLIC IMPROVEMENTS, WHETHER AN APPROPRIATION THEREFORE HAS OR HAS NOT BEEN MADE, ARE HEREBY AMENDED TO PROVIDE FOR A REDUCTION OF 10 PERCENTUM OF THE LIMIT OF COST AS FIXED IN SUCH AUTHORIZATION, AS TO PROJECTS WHERE NO CONTRACT FOR THE CONSTRUCTION HAS BEEN MADE. AS TO SUCH PROJECTS WHERE A CONTRACT HAS BEEN MADE AT A COST LESS THAN THAT UPON WHICH THE AUTHORIZATION WAS BASED, SUCH COST SHALL NOT, UNLESS AUTHORIZED BY THE PRESIDENT, BE INCREASED BY ANY CHANGES OR ADDITIONS NOT ESSENTIAL FOR THE COMPLETION OF THE PROJECT AS ORIGINALLY PLANNED.'

I WOULD APPRECIATE BEING INFORMED WHETHER THE ABOVE LEGISLATION REFERS ONLY TO GENERAL CONTRACTS BETWEEN THE GOVERNMENT AND A GENERAL CONTRACTOR WHICH MAY BE ENTERED INTO AFTER JULY 1, 1932.

ARISING OUT OF TWO GENERAL CONTRACTS FOR CONSTRUCTION OF BUILDINGS IN OTTAWA, CANADA, AND PARIS, FRANCE, BOTH OF WHICH WERE ENTERED INTO PRIOR TO JULY 1, 1932, THERE ARE SUPPLEMENTARY CONTRACTS TO BE ENTERED INTO BETWEEN THE GENERAL CONTRACTORS FOR THESE CONSTRUCTIONS AND SUBCONTRACTORS, AND FOR THESE, CASH ALLOWANCES ARE PROVIDED, THE AMOUNTS FOR WHICH WERE INCLUDED IN THE TOTAL FIXED SUMS OF SUCH GENERAL CONTRACTS. THE EXPENDITURES OF THESE CASH ALLOWANCES, IN ACCORDANCE WITH PARAGRAPH 23 AND PARAGRAPH 29 IN THE SPECIFICATIONS FOR OTTAWA AND PARIS, RESPECTIVELY, REQUIRE THE WRITTEN APPROVAL OF THE CONTRACTING OFFICER. THE PURPOSE OF THIS REQUIREMENT IS MERELY TO MAKE CERTAIN THAT FOR THE WORK COVERED BY THE EXPENDITURE BIDS ARE ASKED AND THE LOWEST BID ACCEPTED IN ACCORDANCE WITH THE USUAL GOVERNMENT PRACTICE.

BEFORE AUTHORIZING ANY SUCH SUPPLEMENTARY SUBCONTRACTS, I WOULD APPRECIATE A DECISION FROM YOU AS TO WHETHER THIS WORK IS AFFECTED BY THE LEGISLATION QUOTED ABOVE.

CONTRACT NO. SFA-221 DATED JULY 1, 1931, WITH HEGEMAN-HARRIS CO. (INC.), FOR THE CONSTRUCTION OF AN AMERICAN GOVERNMENT OFFICE BUILDING AT THE NORTHWEST CORNER OF AVENUE GABRIEL AND RUE BOISSY D-ANGLAIS, PARIS, FRANCE, AND CONTRACT SFA-240, DATED NOVEMBER 10, 1931, WITH GEORGE A. FULLER CO. FOR THE CONSTRUCTION OF AN AMERICAN GOVERNMENT OFFICE BUILDING ON THE SOUTHERLY SIDE OF WELLINGTON STREET, OTTAWA, CANADA, WERE BOTH PRIOR TO THE APPROVAL, JUNE 30, 1932, OF PUBLIC NO. 212, 47 STAT. 382, CONTAINING SECTION 320, WHICH YOU HAVE QUOTED IN YOUR LETTER OF AUGUST 1, 1932, AND BOTH CONTRACTS APPEAR TO HAVE BEEN THE RESULT OF AUTHORIZATIONS CONTAINED IN THE ACT OF MAY 7, 1926, 44 STAT. 403, 405. THEREFORE, THERE IS APPLICABLE TO THESE PROJECTS THE SECOND SENTENCE, ONLY, OF THE SAID SECTION 320, BUT SAID SENTENCE IS APPLICABLE TO THE SO-CALLED "CASH ALLOWANCES" TO WHICH YOU HAVE INVITED ATTENTION, AS WELL AS TO THE PARTS OF THE APPROPRIATIONS INVOLVED NOT COVERED BY THE CONTRACTS. THE PROVISIONS IN THE SPECIFICATIONS FOR THESE TWO PROJECTS ARE IN SIMILAR TERMS WITH RESPECT TO SUCH ALLOWANCES AND, FOR PRESENT PURPOSES, THERE MAY BE QUOTED PARAGRAPH 23 OF THE SPECIFICATIONS FOR THE OTTAWA BUILDING, AS FOLLOWS:

FOR ANY TRADE, IN CASE OF WORK NECESSITATING SPECIALISTS AND/OR SPECIAL MATERIAL, CERTAIN CASH ALLOWANCES ARE CALLED FOR IN THE SPECIFICATIONS BY THE ARCHITECTS TO COVER THE EXPENSE SO INCURRED ONLY AFTER FORMAL WRITTEN APPROVAL OF THE CONTRACTING OFFICER. THEREFORE, IN THE ESTIMATE SUBMITTED BY THE CONTRACTOR, HE SHALL INCLUDE SAID CASH ALLOWANCES. THE CONTRACTOR SHALL ACCEPT THE RESPONSIBILITY FOR THE PERFECT EXECUTION OF SAID WORKS. THE CONTRACTOR DECLARES THAT THE CONTRACT SUM INCLUDES ALL SUMS FOR EXPENSES AND PROFIT ON ACCOUNT OF CASH ALLOWANCES AND NO SUM TO COVER EXPENSES OR PROFIT OTHER THAN THOSE INCLUDED IN THE CONTRACT SUM SHALL BE ALLOWED. IN CASE SAID CASH ALLOWANCES TO COVER SPECIAL WORK BE HIGHER THAN THE AMOUNT NECESSARY FOR THE EXECUTION OF THE WORK INCLUDED UNDER SUCH ALLOWANCES, IT IS UNDERSTOOD THAT THE DIFFERENCE WILL BE CREDITED TO THE CONTRACTING OFFICER.

THERE WERE RESERVED TO THE UNITED STATES WITH RESPECT TO THESE CASH ALLOWANCES ANY SAVINGS BETWEEN THE AMOUNT OF THE RESPECTIVE ALLOWANCES AND THE COST OF THE SERVICES OF THE SPECIALISTS AND/OR THE COST OF SPECIAL MATERIAL. SUCH SAVINGS, IF ANY, IN THE CASH ALLOWANCES AS WELL AS SAVINGS IN THE RESPECTIVE CONTRACT PRICES MAY NOT BE USED FOR CHANGES OR ADDITIONS AFTER JUNE 30, 1932, NOT ESSENTIAL TO THE COMPLETION OF THE PROJECT AS ORIGINALLY PLANNED UNLESS AUTHORIZED BY THE PRESIDENT.