A-62598, OCTOBER 22, 1935, 15 COMP. GEN. 318

A-62598: Oct 22, 1935

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- EVEN IF IT WERE POSSIBLE. DECLARED BY THE CODE AUTHORITY FOR ITS INDUSTRY TO HAVE BEEN IN VIOLATION OF THE APPLICABLE CODE DURING THE PERIOD OF PERFORMANCE OF A CONTRACT. DELIVERIES WERE BEGUN ON JULY 1. THAT CLAIMANT WAS IN VIOLATION OF ITS CODE DURING THE PERIOD OF THE PERFORMANCE OF ITS CONTRACT IN THAT IT FAILED TO PAY ITS CODE CONTRIBUTIONS FOR THE MONTHS OF OCTOBER. CLAIMANT WAS ADVISED OF THE CONTENTS OF THESE REPORTS AND REQUESTED TO EXPLAIN THE ALLEGED DELINQUENCIES. WHEN SAME IS ADJUSTED. THE QUESTION PRESENTED IS WHETHER THE CLAIM OF THE HERCULES LEATHER GOODS COMPANY. WILL BE ALLOWED BY YOUR OFFICE. IN VIEW OF THE FACT THAT THE COMPANY HAS BEEN DECLARED BY THE CODE AUTHORITY FOR ITS INDUSTRY TO HAVE BEEN IN VIOLATION OF THE CODE DURING THE PERIOD OF THE PERFORMANCE OF THE CONTRACT IN RESPECT OF WHICH CLAIM HAS BEEN MADE.

A-62598, OCTOBER 22, 1935, 15 COMP. GEN. 318

CONTRACTORS - RELIEF ACT - CODE AND PRESIDENTIAL REEMPLOYMENT AGREEMENT COMPLIANCE THE ACT OF JUNE 16, 1934, 48 STAT. 974, DOES NOT CONTEMPLATE OR AUTHORIZE EX POST FACTO COMPLIANCE--- EVEN IF IT WERE POSSIBLE--- WITH THE APPLICABLE APPROVED CODE OF FAIR COMPETITION, OR IF NO CODE, WITH THE PRESIDENT'S REEMPLOYMENT AGREEMENT SO AS TO ENTITLE A CONTRACTOR, DECLARED BY THE CODE AUTHORITY FOR ITS INDUSTRY TO HAVE BEEN IN VIOLATION OF THE APPLICABLE CODE DURING THE PERIOD OF PERFORMANCE OF A CONTRACT, TO THE BENEFITS OF SAID ACT.

COMPTROLLER GENERAL MCCARL TO THE SECRETARY OF THE TREASURY, OCTOBER 22, 1935:

THERE HAS BEEN RECEIVED YOUR LETTER OF AUGUST 16, 1935, AS FOLLOWS:

THE HERCULES LEATHER GOODS COMPANY OF NEW YORK, NEW YORK, HAS PRESENTED TO THIS DEPARTMENT, PURSUANT TO PUBLIC ACT 369, APPROVED JUNE 16, 1934, A CLAIM FOR REIMBURSEMENT FOR ADDITIONAL COSTS INCURRED IN PERFORMING ITS CONTRACT WITH THIS DEPARTMENT, NO. TGS-9181, BY REASON OF COMPLIANCE WITH THE PRESIDENT'S REEMPLOYMENT AGREEMENT AND THE LUGGAGE AND FANCY LEATHER GOODS CODE OF FAIR COMPETITION, EFFECTIVE OCTOBER 13, 1933.

DELIVERIES WERE BEGUN ON JULY 1, 1933, AND COMPLETED ON JUNE 30, 1934.

IT APPEARS, HOWEVER, FROM SEVERAL REPORTS OF THE NATIONAL RECOVERY ADMINISTRATION, COPIES ATTACHED, THAT CLAIMANT WAS IN VIOLATION OF ITS CODE DURING THE PERIOD OF THE PERFORMANCE OF ITS CONTRACT IN THAT IT FAILED TO PAY ITS CODE CONTRIBUTIONS FOR THE MONTHS OF OCTOBER, NOVEMBER, AND DECEMBER 1933, AND APRIL, MAY, AND JUNE 1934. ON APRIL 1, 1935, CLAIMANT WAS ADVISED OF THE CONTENTS OF THESE REPORTS AND REQUESTED TO EXPLAIN THE ALLEGED DELINQUENCIES. IT REPLIED BY LETTER DATED APRIL 6, 1935, COPY ATTACHED, THAT "WE AT NO TIME REFUSED TO PAY OUR CODE LEVIES. WE ONLY AWAITED THE OUTCOME * * * OF THE CONTROVERSY THAT EXISTED BETWEEN THE NEW YORK MANUFACTURERS AND THE CODE AUTHORITY, AND WHEN SAME IS ADJUSTED, WE WOULD BE PLEASED TO PAY OUR PROPORTIONATE SHARE NECESSARY FOR THE MAINTENANCE OF SUCH CODE AGENCY.'

THE QUESTION PRESENTED IS WHETHER THE CLAIM OF THE HERCULES LEATHER GOODS COMPANY, IF ESTABLISHED, WILL BE ALLOWED BY YOUR OFFICE, IN VIEW OF THE FACT THAT THE COMPANY HAS BEEN DECLARED BY THE CODE AUTHORITY FOR ITS INDUSTRY TO HAVE BEEN IN VIOLATION OF THE CODE DURING THE PERIOD OF THE PERFORMANCE OF THE CONTRACT IN RESPECT OF WHICH CLAIM HAS BEEN MADE.

WHILE YOUR DECISION OF APRIL 24, 1935 (A-54011, A-59433), SEEMS TO HOLD THAT A VIOLATION OCCURRING AT SUCH A TIME CONSTITUTES A SUFFICIENT GROUND FOR REJECTING THE CLAIM, IT IS NOT CLEAR WHETHER THE EXPRESSED WILLINGNESS OF THE HERCULES LEATHER GOODS COMPANY TO PAY ITS CODE CONTRIBUTIONS UPON THE DETERMINATION OF THE ABOVE-MENTIONED CONTROVERSY IS SUFFICIENT TO WARRANT A DIFFERENT HOLDING BY YOU IN THE INSTANT CASE.

SINCE THE AUTHORITY TO ADJUST AND SETTLE CLAIMS ARISING UNDER THE ACT IS VESTED IN YOU, YOUR ADVICE IN THE MATTER IS RESPECTFULLY REQUESTED AT THIS TIME IN ORDER TO AVOID THE UNNECESSARY EXAMINATION OF THE CLAIM IN QUESTION IN THE EVENT OF AN ADVERSE RULING BY YOU.

THE ACT OF JUNE 16, 1934 (48 STAT. 974), MAKES IT ONE OF THE CONDITIONS PRECEDENT TO ANY BENEFITS THEREUNDER THAT THE CONTRACTOR, IN THE PERFORMANCE AFTER AUGUST 10, 1933, OF A CONTRACT WITH THE UNITED STATES ENTERED INTO PRIOR TO SAID DATE, MUST HAVE COMPLIED WITH THE APPLICABLE APPROVED CODE OF FAIR COMPETITION OR IF NO CODE, THEN WITH THE PRESIDENT'S REEMPLOYMENT AGREEMENT. AS THE HERCULES LEATHER GOODS CO. OF NEW YORK FAILED TO COMPLY WITH THE APPLICABLE APPROVED CODE, AS DETERMINED BY ITS CODE AUTHORITY, SUCH COMPANY IS NOT ENTITLED TO ANY BENEFITS UNDER THE ACT OF JUNE 16, 1934, AND EVEN IF IT WERE NOW POSSIBLE TO PERFORM THE ACTS NECESSARY TO COMPLY WITH A CODE WHICH NO LONGER EXISTS, SUCH ACTS WOULD OBVIOUSLY BE IN AN ATTEMPT TO BRING THE COMPANY WITHIN THE TERMS OF THE ACT OF JUNE 16, 1934, IN THE HOPE OF SECURING A LARGER AMOUNT FROM THE GOVERNMENT THAN IT WOULD COST THE COMPANY TO COMPLY WITH SUCH CODE. THE LAW DOES NOT CONTEMPLATE OR AUTHORIZE EX POST FACTO COMPLIANCE--- EVEN IF IT WERE POSSIBLE--- WITH RESPECT TO THE ACT OF JUNE 16, 1934.

ACCORDINGLY, YOU ARE ADVISED THAT UPON THE BASIS OF THE PRESENT RECORD, THE HERCULES LEATHER GOODS CO. IS NOT ENTITLED TO ANY BENEFITS UNDER THE ACT OF JUNE 16, 1934.