A-65387, MARCH 12, 1936, 15 COMP. GEN. 779

A-65387: Mar 12, 1936

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CONTRACTS - DAMAGES - NONAVAILABILITY OF APPROPRIATIONS AN APPROPRIATION UNDER WHICH A CONSTRUCTION CONTRACT IS MADE IS NOT AVAILABLE FOR PAYMENT OF DAMAGES IN THE FORM OF A CLAIM BY THE CONTRACTOR FOR INCREASED COSTS OF CONSTRUCTION BASED ON AN ALLEGED ERRONEOUS OR UNAUTHORIZED REQUIREMENT OF THE ADMINISTRATIVE OFFICER IN CHARGE OF THE WORK. UNLESS SUCH DAMAGES ARE PROVIDED FOR IN THE APPROPRIATION. WHEREIN WAS DISALLOWED YOUR CLAIM FOR ADDITIONAL COMPENSATION IN THE SUM OF $228. WHICH WAS SUBSEQUENTLY MODIFIED BY CERTAIN CHANGE ORDERS. THE WORK WAS TO BE COMMENCED MARCH 18. WHERE THEY ARE QUALIFIED. THEN IN THE FOLLOWING ORDER: (1) TO CITIZENS OF THE UNITED STATES AND ALIENS WHO HAVE DECLARED THEIR INTENTION OF BECOMING CITIZENS.

A-65387, MARCH 12, 1936, 15 COMP. GEN. 779

CONTRACTS - DAMAGES - NONAVAILABILITY OF APPROPRIATIONS AN APPROPRIATION UNDER WHICH A CONSTRUCTION CONTRACT IS MADE IS NOT AVAILABLE FOR PAYMENT OF DAMAGES IN THE FORM OF A CLAIM BY THE CONTRACTOR FOR INCREASED COSTS OF CONSTRUCTION BASED ON AN ALLEGED ERRONEOUS OR UNAUTHORIZED REQUIREMENT OF THE ADMINISTRATIVE OFFICER IN CHARGE OF THE WORK, UNLESS SUCH DAMAGES ARE PROVIDED FOR IN THE APPROPRIATION, THE MATTER WHETHER THE UNITED STATES MAY BE FOUND LIABLE FOR DAMAGES FOR BREACH OF CONTRACT IN THE COURTS BEING WHOLLY DIFFERENT FROM THE AVAILABILITY OF AN EXISTING APPROPRIATION FOR THE PAYMENT OF DAMAGES.

ACTING COMPTROLLER GENERAL ELLIOTT TO THE PENKER CONSTRUCTION CO., MARCH 12, 1936:

CONSIDERATION HAS BEEN GIVEN YOUR REQUEST FOR REVIEW--- AND THE BRIEFS SUBMITTED IN CONNECTION WITH SAID REQUEST--- OF SETTLEMENT NO. 0419283 (2), DATED OCTOBER 16, 1935, WHEREIN WAS DISALLOWED YOUR CLAIM FOR ADDITIONAL COMPENSATION IN THE SUM OF $228,728.74 BASED UPON THE ALLEGED BREACH BY THE GOVERNMENT OF WAR DEPARTMENT CONTRACT NO. W-6681 QM-94, DATED MARCH 8, 1934, FOR THE CONSTRUCTION OF CERTAIN OFFICERS' QUARTERS IN AREAS A, B, AND C AT PATTERSON FIELD, FAIRFIELD, GREENE COUNTY, OHIO.

THE CONTRACT PROVIDED THAT YOU FURNISH ALL LABOR, EQUIPMENT, AND MATERIALS AND PERFORM ALL WORK REQUIRED FOR THE COMPLETION OF THE BUILDINGS, INCLUDING UTILITIES THERETO, IN STRICT ACCORDANCE WITH THE SPECIFICATIONS, SCHEDULES, AND DRAWINGS REFERRED TO THEREIN, FOR THE CONSIDERATION OF $1,018,300, WHICH WAS SUBSEQUENTLY MODIFIED BY CERTAIN CHANGE ORDERS, THE NET AMOUNT OF WHICH ORDERS INCREASED THE CONTRACT PRICE TO $1,022,881.21. THE WORK WAS TO BE COMMENCED MARCH 18, 1934, AND TO BE COMPLETED ON OR BEFORE JUNE 1, 1935, THE PERIOD OF TIME FOR PERFORMANCE, HOWEVER, TO BE EXCLUSIVE OF ANY TIME THAT MIGHT INTERVENE BETWEEN THE EFFECTIVE DATE OF ORDERS OF THE CONTRACTING OFFICER TO SUSPEND OPERATIONS ON ACCOUNT OF WEATHER CONDITIONS AND THE EFFECTIVE DATE OF ORDERS TO RESUME WORK.

ARTICLE 19 OF THE CONTRACT PROVIDED, IN PART, AS FOLLOWS:

(A) LABOR PREFERENCES.--- PREFERENCE SHALL BE GIVEN, WHERE THEY ARE QUALIFIED, TO EXSERVICE MEN WITH DEPENDENTS, AND THEN IN THE FOLLOWING ORDER: (1) TO CITIZENS OF THE UNITED STATES AND ALIENS WHO HAVE DECLARED THEIR INTENTION OF BECOMING CITIZENS, WHO ARE BONA FIDE RESIDENTS OF THE POLITICAL SUBDIVISIONS AND/OR COUNTY IN WHICH THE WORK IS TO BE PERFORMED, AND (2) TO CITIZENS OF THE UNITED STATES AND ALIENS WHO HAVE DECLARED THEIR INTENTION OF BECOMING CITIZENS, WHO ARE BONA FIDE RESIDENTS OF THE STATE, TERRITORY, OR DISTRICT IN WHICH THE WORK IS TO BE PERFORMED: PROVIDED, THAT THESE PREFERENCES SHALL APPLY ONLY WHERE SUCH LABOR IS AVAILABLE AND QUALIFIED TO PERFORM THE WORK TO WHICH THE EMPLOYMENT RELATES.

(B) EMPLOYMENT SERVICES.--- TO THE FULLEST EXTENT POSSIBLE, LABOR REQUIRED FOR THE PROJECT AND APPROPRIATE TO BE SECURED THROUGH EMPLOYMENT SERVICES, SHALL BE CHOSEN FROM THE LISTS OF QUALIFIED WORKERS SUBMITTED BY LOCAL EMPLOYMENT AGENCIES DESIGNATED BY THE UNITED STATES EMPLOYMENT SERVICE: PROVIDED, HOWEVER, THAT ORGANIZED LABOR, SKILLED AND UNSKILLED, SHALL NOT BE REQUIRED TO REGISTER AT SUCH LOCAL EMPLOYMENT AGENCIES BUT SHALL BE SECURED IN THE CUSTOMARY WAYS THROUGH RECOGNIZED UNION LOCALS. IN THE EVENT, HOWEVER, THAT QUALIFIED WORKERS ARE NOT FURNISHED BY THE UNION LOCALS WITHIN 48 HOURS (SUNDAYS AND HOLIDAYS EXCLUDED) AFTER REQUEST IS FILED BY THE EMPLOYER, SUCH LABOR MAY BE CHOSEN FROM LISTS OF QUALIFIED WORKERS SUBMITTED BY LOCAL AGENCIES DESIGNATED BY THE UNITED STATES EMPLOYMENT SERVICE. IN THE SELECTION OF WORKERS FROM LISTS PREPARED BY SUCH EMPLOYMENT AGENCIES AND LOCAL UNIONS, THE LABOR PREFERENCES PROVIDED IN SECTION (A) OF THIS ARTICLE SHALL BE OBSERVED.

YOU CONTEND THAT THE GOVERNMENT BREACHED THE CONTRACT IN THAT THE QUARTERMASTER GENERAL PLACED AN ERRONEOUS INTERPRETATION UPON THE ABOVE QUOTED PROVISIONS OF THE CONTRACT, BY REASON OF WHICH YOU WERE REQUIRED BY THE CONSTRUCTING QUARTERMASTER, ACTING UNDER INSTRUCTIONS FROM THE QUARTERMASTER GENERAL, TO OBTAIN YOUR LABOR FROM A SMALLER AREA GEOGRAPHICALLY THAN WHAT YOU CONTEND WAS PERMITTED UNDER THE ABOVE QUOTED PROVISIONS OF THE CONTRACT, AND THAT YOU WERE THEREBY COMPELLED TO TAKE INFERIOR LABOR CAUSING YOU TO USE MORE MEN FOR A LONGER TIME, THUS INCREASING THE COST OF LABOR AND DELAYING THE PROGRESS OF THE WORK SO THAT THE ALLEGED ADDITIONAL COST TO YOU WAS NOT LIMITED TO THE ORIGINAL WAGES PAID TO LESS EFFICIENT WORKMEN, BUT INCLUDED, ALSO, THE COST OF ADDITIONAL SUPERVISION AND THE COST OF FURNISHING TEMPORARY HEAT IN THE BUILDINGS BECAUSE THE WORK HAD TO BE CARRIED THROUGH THE END OF WINTER, AND WITH ADDITIONS FOR INSURANCE AND CENTRAL OFFICE OVERHEAD. YOU SUMMARIZE WHAT YOU CONTEND TO BE THE LABOR PREFERENCES UNDER THE SAID ARTICLE 19 AS FOLLOWS:

1. BONA FIDE RESIDENTS OF THE COUNTY (GREENE COUNTY) IN WHICH THE WORK IS TO BE PERFORMED ARE TO RECEIVE FIRST PREFERENCE.

2. BONA FIDE RESIDENTS OF THE STATE (OHIO) IN WHICH THE WORK IS TO BE PERFORMED ARE TO RECEIVE PREFERENCE AFTER PREFERENCE ONE IS EXHAUSTED.

YOU STATE THAT YOU ARE A UNION CONTRACTOR AND FURTHER CONTEND THAT AS A UNION CONTRACTOR IT WAS YOUR DUTY UNDER SAID ARTICLE 19, TO GIVE PREFERENCE TO UNION MEN, CITING IN SUPPORT THEREOF AN OPINION OF OCTOBER 25, 1933, OF THE ATTORNEY GENERAL TO THE FEDERAL EMERGENCY ADMINISTRATOR OF PUBLIC WORKS, AND YOU CONTEND, ALSO, THAT AS A UNION CONTRACTOR, THE LABOR PREFERENCES APPLICABLE TO YOU UNDER SAID ARTICLE 19 WERE AS FOLLOWS:

1. BONA FIDE UNION RESIDENTS OF GREENE COUNTY, OHIO, TO RECEIVE FIRST PREFERENCE.

2. BONA FIDE UNION RESIDENTS OF THE STATE OF OHIO TO RECEIVE PREFERENCE AFTER PREFERENCE ONE IS EXHAUSTED.

BRIEFLY, IT IS ALLEGED BY YOU THAT THERE WAS AN INSUFFICIENT SUPPLY OF UNION LABOR IN GREENE COUNTY OF THE CLASSES OF LABOR REQUIRED FOR THE WORK AND THAT YOU, THEREFORE, UNDER YOUR INTERPRETATION OF SAID ARTICLE 19, AFTER EXHAUSTING THE QUALIFIED LABOR IN GREENE COUNTY, UNDERTOOK TO DRAW UPON THE STATE OF OHIO AT LARGE FOR YOUR LABOR, EMPLOYING MEN FROM THE LARGER CENTERS OF THE STATE, BUT THAT THE OFFICE OF THE QUARTERMASTER GENERAL INSTRUCTED THE CONSTRUCTING QUARTERMASTER THAT YOU WERE REQUIRED, UNDER SAID ARTICLE 19, AFTER EXHAUSTING THE QUALIFIED LABOR AVAILABLE IN GREENE COUNTY, TO DRAW YOUR LABOR FROM CONTIGUOUS COUNTIES. IN THIS CONNECTION IT APPEARS FROM THE REPORT OF AUGUST 3, 1935, FROM THE OFFICE OF THE QUARTERMASTER GENERAL, SIGNED BY THE CONTRACTING OFFICER, THAT---

4. THIS OFFICE INSTRUCTED THE CONSTRUCTING QUARTERMASTER TO REQUIRE THE CONTRACTOR TO ABIDE BY THE FOLLOWING INTERPRETATIONS WHICH IT PLACED UPON ARTICLES 19 (A) AND 19 (B) OF THE CONTRACT;

A. PARAGRAPH 2 OF LETTER DATED AUGUST 20, 1934, WHICH READS AS FOLLOWS. (SEE EXHIBIT 2-A.):

"IT IS THE OPINION OF THIS OFFICE THAT PATTERSON AND WRIGHT FIELDS, BY REASON OF LOCATION, APPROXIMATELY EQUI-DISTANT FROM THREE SOURCES OF LABOR, I.E. XENIA, DAYTON, AND SPRINGFIELD, WOULD FALL WITHIN THE RULE PROMULGATED BY THE FEDERAL EMERGENCY ADMINISTRATION OF PUBLIC WORKS THAT LABOR MAY BE OBTAINED FROM SOURCES WITHIN AN AREA WHERE LABOR IS CUSTOMARILY INTERCHANGEABLE. THE WORDS,"CUSTOMARILY INTERCHANGEABLE" HAVE BEEN INTERPRETED TO MEAN LABOR WHO CUSTOMARILY WORK DAY BY DAY IN THE VICINITY OF THE PROJECT AND WHO RETURNED TO THEIR PERMANENT RESIDENCES AT NIGHT. THEREFORE, IN THE PRESENT CASE, IT MAY BE CUSTOMARY FOR RESIDENTS OF EITHER OF THE THREE CITIES TO BE EMPLOYED AT TIMES IN LOCALITIES ADJACENT TO EITHER OF THE OTHER TWO CITIES.'

B. PARAGRAPH 1, 1ST INDORSEMENT DATED NOVEMBER 15, 1934, WHICH READS AS FOLLOWS. (SEE EXHIBIT 4-B):

"THE INTERPRETATION BY THE PENKER CONSTRUCTION COMPANY OF THE PROVISIONS OF ARTICLE 19 OF P.W.A. CONTRACT FORM NO. 51 IS IN ERROR. A UNION CONTRACTOR DESIRING TO USE ONLY UNION LABOR MUST APPLY TO THE LOCAL UNION HAVING JURISDICTION OVER THE AREA IN WHICH THE PROJECT IS LOCATED. IN THE EVENT, HOWEVER, THAT QUALIFIED WORKERS ARE NOT FURNISHED BY THE UNION LOCALS WITHIN 48 HOURS (SUNDAYS AND HOLIDAYS EXCLUDED) AFTER REQUEST IS FILED BY THE EMPLOYER, SUCH LABOR MAY BE CHOSEN FROM LISTS OF QUALIFIED WORKERS SUBMITTED BY LOCAL AGENCIES DESIGNATED BY THE UNITED STATES EMPLOYMENT SERVICE. IN THE SELECTION OF WORKERS FROM LISTS PREPARED BY SUCH EMPLOYMENT AGENCIES AND LOCAL UNIONS, THE LABOR PREFERENCES PROVIDED IN SECTION (A) OF ARTICLE 19 SHALL BE OBSERVED.'

C. PARAGRAPH 3, 1ST INDORSEMENT DATED NOVEMBER 15, 1934, WHICH READS AS FOLLOWS. (SEE EXHIBIT 4-B):

"ALL CONTRACTORS EMPLOYED ON P.W.A. PROJECTS AT PATTERSON FIELD HAVE TWO SOURCES OF LABOR, TO WIT: THE UNION LOCALS HAVING JURISDICTION OF THE AREA IN WHICH PATTERSON FIELD IS LOCATED, AND THE LOCAL AGENCY OF THE UNITED STATES REEMPLOYMENT SERVICE. EACH PERSON EMPLOYED ON THE WORK AS A LABORER OR MECHANIC SHOULD BE IN POSITION TO SHOW THAT HE HAS BEEN REFERRED TO THE JOB BY EITHER OF THE TWO AUTHORIZED SOURCES OF LABOR. THE SOURCE OF LABOR FURNISHING THE EMPLOYEE IS RESPONSIBLE FOR THE RESIDENTIAL QUALIFICATIONS OF THE APPLICANT FOR WORK AND NO RESIDENT OF THE STATE WHO IS NOT A RESIDENT OF GREEN COUNTY OR TERRITORY IMMEDIATELY CONTIGUOUS THERETO WHERE LABOR IS CUSTOMARILY INTERCHANGEABLE IS ENTITLED TO EMPLOYMENT IF QUALIFIED LABOR WHETHER MEMBERS OF ORGANIZED LABOR OR NOT, WHO ARE RESIDENTS OF GREENE COUNTY OR TERRITORY CONTIGUOUS THERETO ARE UNEMPLOYED (THE TERM,"WHERE LABOR IS CUSTOMARILY INTERCHANGEABLE" HAS BEEN INTERPRETED TO MEAN LABOR THAT PROCEEDS FROM AND RETURNS TO HIS PERMANENT RESIDENCE EACH DAY).'

5. NOT TAKING INTO CONSIDERATION THE SUBJECT OF VETERAN PREFERENCE, THE SUMMATION OF THE ABOVE INSTRUCTIONS IS THAT THE CONTRACTOR DESIRING TO EMPLOY UNION LABOR WAS REQUIRED TO SECURE ITS EMPLOYEES FOR WORK ON ITS PROJECT AT PATTERSON FIELD, FAIRFIELD, OHIO, IN THE FOLLOWING ORDER:

1. THROUGH THE UNION LOCAL WHICH WILL FURNISH UNION WORKMEN WHO ARE RESIDENTS OF GREENE COUNTY AND THEN MEMBERS OF THE UNION LOCAL RESIDING IN THE AREA WHERE LABOR IS "CUSTOMARILY INTERCHANGEABLE," WHICH INCLUDES THE CITIES OF DAYTON, SPRINGFIELD, AND XENIA.

"2. WHEN IT HAD EXHAUSTED THE EMPLOYEES ENUMERATED IN (1), THEN IT WAS TO APPLY TO THE FEDERAL REEMPLOYMENT SERVICE TO FURNISH IT WITH LABOR (WHETHER MEMBERS OF ORGANIZED LABOR OR NOT) RESIDING IN THE COUNTY (I.E., GREENE COUNTY) IN WHICH THE PROJECT IS LOCATED.'

IT IS NOT NECESSARY TO CONSIDER THE BROADER SOURCE OF LABOR FROM THE STATE AT LARGE, AS THE CONTRACTOR NEVER DEPLETED THE SUPPLY OF LABOR FROM THE SOURCES LISTED IN (1) AND (2).

6. IN ISSUING THE ABOVE INSTRUCTIONS THIS OFFICE WAS GUIDED BY SECTION 10 OF BULLETIN NO. 51 PROMULGATED BY THE FEDERAL EMERGENCY ADMINISTRATION OF PUBLIC WORKS, WHICH READS AS FOLLOWS:

"EMPLOYERS MAY USE ORGANIZED OR UNORGANIZED LABOR. UNORGANIZED LABOR SHALL BE OBTAINED FROM LOCAL EMPLOYMENT AGENCIES DESIGNATED BY THE UNITED STATES EMPLOYMENT SERVICE, WHILE ORGANIZED LABOR MUST BE SOUGHT IN THE FIRST INSTANCE FROM UNION LOCALS. * * *"

ALSO SECTION 1, ARTICLE II OF CIRCULAR NO. 1,"THE PURPOSES, POLICIES, FUNCTIONING, AND ORGANIZATION OF THE EMERGENCY ADMINISTRATION--- THE RULES PRESCRIBED BY THE PRESIDENT," WHICH READS AS FOLLOWS:

"SECTION 1. LABOR POLICY.

"/1) OPPORTUNITIES FOR EMPLOYMENT ON PROJECTS AUTHORIZED UNDER THE EMERGENCY ADMINISTRATION OF PUBLIC WORKS SHALL BE EQUITABLY DISTRIBUTED AMONG THE QUALIFIED WORKERS WHO ARE UNEMPLOYED, NOT AMONG THOSE WHO MERELY WISH TO CHANGE ONE GOOD JOB FOR ANOTHER.

"/2) THESE WORK OPPORTUNITIES SHALL BE DISTRIBUTED, GEOGRAPHICALLY, AS WIDELY AND AS EQUITABLY AS MAY BE PRACTICAL.

"/3) QUALIFIED WORKERS, WHO UNDER THE LAW, ARE ENTITLED TO PREFERENCE SHALL SECURE SUCH PREFERENCE.

"/4) THE WASTEFUL COST AND PERSONAL DISAPPOINTMENTS DUE TO EXCESSIVE INCREASE OF LABOR IN THE VICINITY OF THE WORK PROJECTS SHALL BE AVOIDED.

IT APPEARS THAT THE ABOVE QUOTED POLICIES OF THE PRESIDENT MUST BE CONSTRUED AS (1) AUTHORIZING WORK PROJECTS TO BE UNDERTAKEN IN VARIOUS LOCALITIES IN ORDER THAT LABOR RESIDING IN THOSE LOCALITIES WOULD BE GIVEN OPPORTUNITY FOR WORK, AND TO CONFINE THE PREFERENCE IN EMPLOYMENT ON SAID PROJECTS FIRST TO THE COUNTY IN WHICH SAID PROJECTS ARE LOCATED AND THEN, AS THIS LABOR SUPPLY DIMINISHES, TO ADJACENT INCREASED AREA MEASURED FROM THE SITE OF THE WORK AND NOT TO IMPORT LABOR FROM TERRITORY DISTANT FROM THE REGION UNDER CONSIDERATION FOR THE AUTHORIZED WORK PROJECT.

IT WAS URGED BY YOU THAT THE GOVERNMENT HAD NO RIGHT UNDER SAID ARTICLE 19 TO REQUIRE YOU, AFTER EXHAUSTING THE QUALIFIED LABOR IN GREENE COUNTY, TO EMPLOY YOUR LABOR FROM THE ADJACENT COUNTIES BEFORE RESORTING TO THE EMPLOYMENT OF LABOR FROM THE STATE AT LARGE, BUT THAT YOU HAD A RIGHT TO EMPLOY IT FROM THE STATE AT LARGE AFTER EXHAUSTING THE SUPPLY OF THE COUNTY SO LONG AS YOU OBTAINED YOUR LABOR THROUGH RECOGNIZED UNION LOCALS.

IT FURTHER APPEARS THAT UNDER DATE OF NOVEMBER 21, 1934, YOU WROTE THE CONSTRUCTING QUARTERMASTER THAT IN ACCORDANCE WITH THE QUARTERMASTER GENERAL'S DECISION OF NOVEMBER 15, 1934 (WHICH IS REFERRED TO IN THE HEREINABOVE QUOTED PART OF THE REPORT OF AUGUST 3, 1935, OF THE QUARTERMASTER GENERAL) YOU HAD DISCONTINUED THE EMPLOYMENT OF 22 PLASTERERS WHO WERE NOT RESIDENTS OF THE IMMEDIATE VICINITY, BUT THAT YOU DID NOT ACCEPT THE DECISION AND, THEREFORE, REQUESTED THAT THE MATTER BE SUBMITTED TO THE BOARD OF LABOR REVIEW AS PROVIDED IN ARTICLE 15 OF THE CONTRACT. THAT LETTER WAS FORWARDED BY THE QUARTERMASTER GENERAL TO THE SECRETARY OF THE BOARD OF LABOR REVIEW OF THE FEDERAL EMERGENCY ADMINISTRATION OF PUBLIC WORKS BY LETTER OF DECEMBER 1, 1934, WHO IN TURN FORWARDED IT TO THE ADMINISTRATOR OF PUBLIC WORKS, AND BY LETTER OF JANUARY 8, 1935, THE CHIEF, FEDERAL PROJECTS SECTION, PROJECTS DIVISION, OF THE FEDERAL EMERGENCY ADMINISTRATION OF PUBLIC WORKS, FOR THE ADMINISTRATOR, INFORMED THE OFFICE OF THE QUARTERMASTER GENERAL THAT HE CONCURRED IN THE LATTER'S INTERPRETATION OF THE CONTRACT. THE INTERPRETATION PLACED UPON SAID ARTICLE 19 BY THE QUARTERMASTER GENERAL APPEARS TO HAVE BEEN IN ACCORD WITH THE VIEWS OF THE PUBLIC WORKS ADMINISTRATION AT THE TIME THE WORK WAS PERFORMED, BUT THE LATTER APPEARS SUBSEQUENTLY TO HAVE TAKEN A VIEW SUBSTANTIALLY IN ACCORD WITH YOURS--- THAT IS, TO THE EFFECT THAT AFTER EXHAUSTING THE QUALIFIED LABOR IN GREENE COUNTY YOU MIGHT RESORT TO THE STATE AT LARGE FOR YOUR LABOR.

THE CLAIM WAS SUBMITTED HERE FOR DIRECT SETTLEMENT BY THE CHIEF OF FINANCE, WAR DEPARTMENT, BY SIXTH ENDORSEMENT DATED SEPTEMBER 3, 1935. ADMINISTRATIVE REPORT APPEARS, HOWEVER, AS TO THE CORRECTNESS OF THE AMOUNT OF THE CLAIM OR OF ANY OF THE NUMEROUS ITEMS OF WHICH IT IS COMPRISED, IT OTHERWISE APPEARING FROM THE RECORD THAT THE ADMINISTRATIVE OFFICE WITHHELD ANY EXAMINATION OF THE ITEMS OF THE CLAIM OR REPORT AS TO THE CORRECTNESS THEREOF PENDING A DETERMINATION BY THIS OFFICE AS TO WHETHER THE INTERPRETATION PLACED BY THE OFFICE OF THE QUARTERMASTER GENERAL ON SAID ARTICLE 19 WAS CORRECT AND AS TO WHETHER, IF THE FACTS ARE AS ALLEGED, THIS OFFICE WOULD AUTHORIZE ANY ALLOWANCE ON THE CLAIM.

THE CLAIM WAS DISALLOWED, WITHOUT DECIDING WHETHER YOUR CONTENTIONS AS TO THE PROPER CONSTRUCTION OF SAID ARTICLE 19 OF THE CONTRACT ARE OR ARE NOT CORRECT, BECAUSE--- ASIDE FROM THE FACT THAT THERE WAS NO ADMINISTRATIVE REPORT OR FINDING AS TO THE CORRECTNESS OF THE AMOUNT OF THE CLAIM OR ANY OF THE ITEMS THEREOF--- (1) THE CLAIM APPEARED TO BE A CLAIM FOR DAMAGES OR INCREASED COSTS BASED ON AN ALLEGED ERRONEOUS OR UNAUTHORIZED REQUIREMENT OF THE ADMINISTRATIVE OFFICER IN CHARGE OF THE WORK, WHICH DAMAGES OR INCREASED COSTS, IF ANY, ARE NOT FOR PAYMENT UNDER THE APPROPRIATION; (2) THE DAMAGES ALLEGED APPEARED TO BE REMOTE AND SPECULATIVE; AND (3) SINCE YOU ELECTED TO PERFORM THE CONTRACT IN ACCORDANCE WITH THE CONSTRUCTION PLACED THEREON BY THE QUARTERMASTER GENERAL AND CONCURRED IN BY THE ADMINISTRATOR OF PUBLIC WORKS, INSTEAD OF OBTAINING YOUR LABOR IN ACCORDANCE WITH YOUR OWN CONSTRUCTION OF SAID PROVISIONS AND INVOKING JUDICIAL PROCESS, IF NECESSARY, TO PREVENT ANY INTERFERENCE WITH THE ACTION IN SUCH RESPECT, YOU COULD NOT BE ALLOWED DAMAGES WHICH MIGHT HAVE RESULTED FROM SUCH VOLUNTARY ACTION ON YOUR PART IN COMPLYING WITH WHAT YOU ALLEGE WAS AN UNAUTHORIZED REQUEST OR INSTRUCTION OF THE CONSTRUCTING QUARTERMASTER OR THE QUARTERMASTER GENERAL.

WITH REFERENCE TO THE MATTER OF WHETHER THE APPROPRIATION UNDER WHICH THE CONTRACT WAS MADE IS AVAILABLE FOR THE PAYMENT OF THE CLAIM, IF OTHERWISE PROPER FOR ALLOWANCE, YOU URGE THAT IN CASE OF A BREACH OF A CONTRACT BY THE GOVERNMENT THE LIABILITY OF THE GOVERNMENT IS NOT LIMITED TO A CLAIM BY A CONTRACTOR FOR EXTRAS OR THE LIKE BUT THAT HE MAY RECOVER, ALSO, DAMAGES ON ACCOUNT OF A BREACH OF CONTRACT--- THAT THE GOVERNMENT IS LIABLE FOR DAMAGE RESULTING FROM ITS OWN BREACH OF CONTRACT AND THAT THE EXTENT OF AN APPROPRIATION HAS NOTHING TO DO WITH THE GOVERNMENT'S LIABILITY IN THIS RESPECT AND WHERE A CONTRACTOR RECOVERS A JUDGMENT AGAINST THE GOVERNMENT, THE CONGRESS AS A MATTER OF COURSE THEN APPROPRIATES THE MONEY TO PAY THE JUDGMENT.

SECTION 3678, REVISED STATUTES, PROVIDES:

ALL SUMS APPROPRIATED FOR THE VARIOUS BRANCHES OF EXPENDITURE IN THE PUBLIC SERVICE SHALL BE APPLIED SOLELY TO THE OBJECTS FOR WHICH THEY ARE RESPECTIVELY MADE, AND FOR NO OTHERS.

WHICH PRECLUDES THE USE OF APPROPRIATED MONEYS FOR THE PAYMENT OF CLAIMS FOR DAMAGES, UNLESS SUCH DAMAGES ARE PROVIDED FOR IN THE APPROPRIATION.

THE MATTER OF WHETHER THE UNITED STATES MAY BE LIABLE FOR DAMAGES FOR A BREACH OF A CONTRACT IS WHOLLY DIFFERENT FROM THE MATTER OF WHETHER AN APPROPRIATION MAY BE AVAILABLE FOR THE PAYMENT OF DAMAGES. IN THE CASE OF A SUIT AGAINST THE GOVERNMENT FOR DAMAGES FOR A BREACH OF CONTRACT AND THE RENDITION OF A JUDGMENT AGAINST THE GOVERNMENT, THE COURT IS NOT CONCERNED WITH THE NONAVAILABILITY OF THE APPROPRIATION FOR THE WORK TO MEET SUCH DAMAGE CLAIMS. SUCH JUDGMENTS ARE NOT PAID FROM CURRENT APPROPRIATIONS BUT ONLY FROM AN APPROPRIATION WHEN AND IF MADE THEREFOR BY THE CONGRESS AFTER THE JUDGMENT IS REPORTED TO IT. THE COURT MERELY CONCLUDES FROM THE PROOF THAT THE CLAIM IS JUST AND SHOULD BE PAID. SEE 7 COMP. GEN. 645.

YOU FURTHER REQUEST THAT IF THE APPROPRIATION BE NOT AVAILABLE FOR PAYMENT OF THE CLAIM, THE MATTER BE CONSIDERED UNDER THE BROAD POWERS OF THE ACT OF 1928, MEANING, PRESUMABLY, THE ACT OF APRIL 10, 1928, 45 STAT. 413, WHICH PROVIDES:

THAT WHEN THERE IS FILED IN THE GENERAL ACCOUNTING OFFICE A CLAIM OR DEMAND AGAINST THE UNITED STATES THAT MAY NOT LAWFULLY BE ADJUSTED BY THE USE OF AN APPROPRIATION THERETOFORE MADE, BUT WHICH CLAIM OR DEMAND IN THE JUDGMENT OF THE COMPTROLLER GENERAL OF THE UNITED STATES CONTAINS SUCH ELEMENTS OF LEGAL LIABILITY OR EQUITY AS TO BE DESERVING OF THE CONSIDERATION OF THE CONGRESS, HE SHALL SUBMIT THE SAME TO THE CONGRESS BY A SPECIAL REPORT CONTAINING THE MATERIAL FACTS AND HIS RECOMMENDATION THEREON.

CAREFUL CONSIDERATION HAS BEEN GIVEN THIS PHASE OF THE MATTER, BUT I DO NOT FIND THAT YOUR CLAIM, ON THE RECORD AS IT APPEARS, HAS SUCH ELEMENTS OF LEGAL LIABILITY OR EQUITY AS TO WARRANT ITS BEING REPORTED TO THE CONGRESS FOR CONSIDERATION UNDER THE ACT OF APRIL 10, 1928, SUPRA, AS REQUESTED BY YOU.

WITH REFERENCE TO THE THIRD REASON ASSIGNED FOR DISALLOWANCE OF YOUR CLAIM, TO THE EFFECT THAT REGARDLESS OF WHAT MAY BE THE CORRECT CONSTRUCTION OF THE PROVISIONS OF SAID ARTICLE 19, SINCE YOU ELECTED TO PERFORM THE CONTRACT IN ACCORDANCE WITH THE CONSTRUCTION PLACED THEREON BY THE QUARTERMASTER GENERAL AND CONCURRED IN BY THE ADMINISTRATOR OF PUBLIC WORKS, INSTEAD OF OBTAINING YOUR LABOR IN ACCORDANCE WITH YOUR OWN CONSTRUCTION OF SAID PROVISIONS AND INVOKING JUDICIAL PROCESS TO PREVENT ANY INTERFERENCE WITH THE ACTION IN SUCH RESPECT, YOU COULD NOT BE ALLOWED DAMAGES WHICH MIGHT HAVE RESULTED FROM SUCH VOLUNTARY ACTION ON YOUR PART IN COMPLYING WITH WHAT YOU ALLEGE WAS AN UNAUTHORIZED REQUEST OR INSTRUCTION OF THE CONSTRUCTING QUARTERMASTER OR THE QUARTERMASTER GENERAL, YOU URGE (1) THAT YOU WERE REQUIRED TO COMPLY WITH THE ADMINISTRATIVE CONSTRUCTION PLACED ON SAID ARTICLE 19 AND THAT YOUR COMPLIANCE THEREWITH WAS NOT VOLUNTARY, CITING IN SUPPORT THEREOF, AMONG OTHERS, THE CASE OF FREUND ET AL. V. UNITED STATES, 260 U.S. 60, AND (2) THAT YOU HAD NO REMEDY IN EQUITY IN A MATTER OF THIS KIND. IN VIEW, HOWEVER, OF THE FACT THAT THE CLAIM, EVEN WERE IT OTHERWISE FOR ALLOWANCE, IS NOT FOR PAYMENT UNDER THE APPROPRIATION HERETOFORE MADE AND THAT IT IS NOT FELT THE CLAIM CONTAINS SUCH ELEMENTS OF LEGAL LIABILITY OR EQUITY AS TO WARRANT ITS BEING REPORTED TO THE CONGRESS FOR CONSIDERATION UNDER SAID ACT OF APRIL 10, 1928, IT APPEARS UNNECESSARY TO FURTHER CONSIDER THIS PHASE OF THE MATTER.

ACCORDINGLY, THE DISALLOWANCE OF THE CLAIM IS SUSTAINED AND YOUR REQUEST THAT IT BE REPORTED TO THE CONGRESS FOR CONSIDERATION UNDER THE ACT OF APRIL 10, 1928, IS DENIED.