A-59433, JANUARY 30, 1935, 14 COMP. GEN. 583

A-59433: Jan 30, 1935

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THE ADMINISTRATIVE OFFICE MUST MAKE SUCH AN EXAMINATION OF THE MATTER AS WILL ENABLE IT TO MAKE THE FINDING OF FACT REQUIRED BY THE STATUTE AND TO VERIFY THE FACTS IN THE CLAIM TO THE EXTENT THAT THEY ARE MATERIAL TO THE RELIEF SOUGHT. AS FOLLOWS: REFERENCE IS MADE TO PUBLIC. ENTITLED "AN ACT TO PROVIDE RELIEF TO GOVERNMENT CONTRACTORS WHOSE COSTS OF PERFORMANCE WERE INCREASED AS A RESULT OF COMPLIANCE WITH THE ACT APPROVED JUNE 16. THERE HAVE BEEN FILED WITH THE VETERANS' ADMINISTRATION. THESE CLAIMS ARE. THE VETERANS' ADMINISTRATION IS NOT IN POSITION. YOUR ADVICE IN THE PREMISES AT AN EARLY DATE WILL BE APPRECIATED. IN NO EVENT SHALL ANY ALLOWANCE BE MADE WHICH WOULD RESULT IN A PROFIT TO THE CLAIMANT EXCEEDING 7 PERCENTUM ON THE COST OF PERFORMANCE OF THE CONTRACT IN RESPECT OF WHICH THE CLAIM IS MADE.

A-59433, JANUARY 30, 1935, 14 COMP. GEN. 583

CONTRACTS - EQUITABLE RELIEF - ADMINISTRATIVE REPORT BEFORE THE COMPTROLLER GENERAL OF THE UNITED STATES MAY CONSIDER A CLAIM BY A CONTRACTOR FOR EQUITABLE RELIEF PURSUANT TO THE ACT OF JUNE 16, 1934, 48 STAT. 974, THE ADMINISTRATIVE OFFICE MUST MAKE SUCH AN EXAMINATION OF THE MATTER AS WILL ENABLE IT TO MAKE THE FINDING OF FACT REQUIRED BY THE STATUTE AND TO VERIFY THE FACTS IN THE CLAIM TO THE EXTENT THAT THEY ARE MATERIAL TO THE RELIEF SOUGHT, AFTER WHICH THE CLAIM MAY BE TRANSMITTED TO THE GENERAL ACCOUNTING OFFICE, ACCOMPANIED BY SUCH ADMINISTRATIVE FINDING OF FACT AND RECOMMENDATION.

COMPTROLLER GENERAL MCCARL TO THE ADMINISTRATOR OF VETERANS' AFFAIRS, JANUARY 30, 1935:

THERE HAS BEEN RECEIVED YOUR LETTER OF DECEMBER 21, 1934, AS FOLLOWS:

REFERENCE IS MADE TO PUBLIC, NO. 369--- 73D CONGRESS, APPROVED JUNE 16, 1934, ENTITLED "AN ACT TO PROVIDE RELIEF TO GOVERNMENT CONTRACTORS WHOSE COSTS OF PERFORMANCE WERE INCREASED AS A RESULT OF COMPLIANCE WITH THE ACT APPROVED JUNE 16, 1933, AND FOR OTHER PURPOSES.'

THE ABOVE-CITED ACT AUTHORIZES AND DIRECTS THE COMPTROLLER GENERAL OF THE UNITED STATES TO ADJUST AND SETTLE ON A FAIR AND EQUITABLE BASIS CLAIMS OF PERSONS WHO ENTERED INTO A CONTRACT OR CONTRACTS WITH THE UNITED STATES PRIOR TO AUGUST 10, 1933, INCLUDING SUBCONTRACTORS AND MATERIALMEN PERFORMING WORK OR FURNISHING MATERIAL OR NECESSARY FUEL DIRECT TO THE CONTRACTOR UNDER SUCH CONTRACTS, FOR ADDITIONAL COSTS INCURRED BY REASON OF COMPLIANCE ON AND AFTER AUGUST 10, 1933, WITH A CODE OR CODES OF FAIR COMPETITION APPROVED BY THE PRESIDENT UNDER SECTION 3 OF THE ACT APPROVED JUNE 16, 1933, KNOWN AS THE "NATIONAL INDUSTRIAL RECOVERY ACT," OR BY REASON OF COMPLIANCE WITH AN AGREEMENT WITH THE PRESIDENT EXECUTED UNDER SECTION 4 (A) OF SAID ACT IN THE PERFORMANCE AFTER AUGUST 10, 1933, OF THE CONTRACT OR ANY PART THEREOF, AND PROVIDES THAT "AFTER THE CLAIM HAS BEEN EXAMINED BY THE HEAD OF THE DEPARTMENT OR INDEPENDENT ESTABLISHMENT CONCERNED, OR SUCH PERSON OR PERSONS AS HE SHALL DESIGNATE, THE CLAIM SHALL BE TRANSMITTED TO THE COMPTROLLER GENERAL OF THE UNITED STATES, ACCOMPANIED WITH AN ADMINISTRATIVE FINDING OF FACT AND RECOMMENDATION WITH RESPECT TO THE CLAIM.'

THERE HAVE BEEN FILED WITH THE VETERANS' ADMINISTRATION, UNDER THE PROVISIONS OF SAID ACT, NUMEROUS CLAIMS ARISING OUT OF CONTRACTS ENTERED INTO PRIOR TO AUGUST 10, 1933, AND THE QUESTION ARISES AS TO WHAT CHARACTER OF EXAMINATION AND EXTENT THEREOF THE VETERANS' ADMINISTRATION SHALL MAKE OF THE CLAIMS BEFORE TRANSMITTING THEM TO THE COMPTROLLER GENERAL. THESE CLAIMS ARE, AS INDICATED BY THE ENCLOSED COPY OF CLAIM FROM THE CAROLINA COTTON AND WOOLEN MILLS COMPANY, MOST COMPLICATED IN THAT THEY INVOLVE INCREASED COSTS FOR OVERHEAD, MILL OPERATIONS, MATERIAL, LABOR, ETC., BY REASON OF OPERATION UNDER THE NATIONAL RECOVERY ACT, AND THE VETERANS' ADMINISTRATION IS NOT IN POSITION, WITHOUT MAKING EXTENSIVE AND COSTLY INVESTIGATIONS, TO PREPARE AN ADMINISTRATIVE FINDING OF FACT IF IT BE INTENDED THAT SUCH FINDING SHALL BE IN THE NATURE OF A DEFINITE STATEMENT AS TO THE CORRECTNESS OF THE BASIS OF THE CLAIMS.

YOUR ADVICE IN THE PREMISES AT AN EARLY DATE WILL BE APPRECIATED. PLEASE RETURN THE COPY OF CLAIM OF THE CAROLINA COTTON AND WOOLEN MILLS COMPANY.

WHILE THE ACT OF JUNE 16, 1934, 48 STAT. 974, AUTHORIZES AND DIRECTS THE COMPTROLLER GENERAL TO ADJUST AND SETTLE ON A FAIR AND EQUITABLE BASIS THE CLAIMS OF CONTRACTORS UNDER CONTRACTS COMING WITHIN ITS TERMS, IT FIRST REQUIRES THAT THE CLAIMS BE FILED WITH THE DEPARTMENT OR ESTABLISHMENT CONCERNED AND FURTHER PROVIDES:

* * * AFTER THE CLAIM HAS BEEN EXAMINED BY THE HEAD OF THE DEPARTMENT OR INDEPENDENT ESTABLISHMENT CONCERNED, OR SUCH PERSON OR PERSONS AS HE SHALL DESIGNATE, THE CLAIM SHALL BE TRANSMITTED TO THE COMPTROLLER GENERAL OF THE UNITED STATES, ACCOMPANIED WITH AN ADMINISTRATIVE FINDING OF FACT AND RECOMMENDATION WITH RESPECT TO THE CLAIM.

SEC. 3. IN NO EVENT SHALL ANY ALLOWANCE BE MADE WHICH WOULD RESULT IN A PROFIT TO THE CLAIMANT EXCEEDING 7 PERCENTUM ON THE COST OF PERFORMANCE OF THE CONTRACT IN RESPECT OF WHICH THE CLAIM IS MADE. THE HEAD OF THE DEPARTMENT OR ESTABLISHMENT CONCERNED, SUBJECT TO THE APPROVAL OF THE COMPTROLLER GENERAL, SHALL HAVE THE AUTHORITY, FROM TIME TO TIME, TO DETERMINE THE ACTUAL COST AND PROFIT THEREON.

NOTE, ALSO, SECTIONS 5 AND 6 OF THE ACT.

ACCORDINGLY, IT IS FOR THE ADMINISTRATIVE OFFICE TO VERIFY IN EACH CASE THE FACTS CLAIMED, TO THE EXTENT THEY ARE MATERIAL, AND TO TRANSMIT THE CLAIM TO THIS OFFICE "ACCOMPANIED WITH" SUCH ADMINISTRATIVE FINDING OF FACT AND A RECOMMENDATION WITH RESPECT TO THE CLAIM. A MERE APPROVAL OR DISAPPROVAL OF THE CLAIM WITHOUT A DEFINITE FINDING OF FACTS WILL NOT MEET THIS REQUIREMENT. IT WILL BE NECESSARY, THEREFORE, FOR THE ADMINISTRATIVE OFFICE TO MAKE SUCH EXAMINATION OF THE MATTER AS WILL ENABLE IT TO MAKE THE FINDING OF FACTS REQUIRED BY THE STATUTE. AS ILLUSTRATIVE OF THE ADMINISTRATIVE ACTION REQUIRED, THERE IS ENCLOSED FOR YOUR INFORMATION COPY OF DECISION OF THIS DATE TO THE POSTMASTER GENERAL REGARDING A CLAIM SUBMITTED THROUGH THAT DEPARTMENT.