A-80538, MARCH 22, 1938, 17 COMP. GEN. 767

A-80538: Mar 22, 1938

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UNDER WHICH THE CODES WERE APPROVED AND AGREEMENTS MADE. WERE NULLIFIED BY DECISION OF THE SUPREME COURT OF THE UNITED STATES. IS SUBMITTED TO YOU FOR DETERMINATION. IS VESTED IN THE COMPTROLLER GENERAL. ON THE THEORY THAT ANY INCREASED COSTS THEREAFTER WERE VOLUNTARY? WITH THE ALLIS-CHALMERS MANUFACTURING COMPANY FOR HYDRAULIC TURBINES FOR THE BOULDER CANYON PROJECT AND THE DATE OF COMPLETION WAS AUGUST 26. IS ENCLOSED. AN EARLY DECISION WILL BE APPRECIATED. THE CONTRACTS WHICH WERE ENTERED INTO PRIOR TO AUGUST 10. UNDER WHICH THE CODES WERE APPROVED AND THE PRESIDENT'S REEMPLOYMENT AGREEMENTS WERE MADE. THAT IS TO SAY.

A-80538, MARCH 22, 1938, 17 COMP. GEN. 767

CONTRACTORS - RELIEF - INCREASED COSTS - COMPLIANCE WITH CODES AND REEMPLOYMENT AGREEMENTS - PERIOD TO BE COVERED BY ADMINISTRATIVE FINDINGS ADMINISTRATIVE FINDINGS OF FACT IN CONNECTION WITH CLAIMS UNDER THE ACT OF JUNE 16, 1934 (48 STAT. 974), FOR INCREASED COSTS BY REASON OF COMPLIANCE WITH CODES OF FAIR COMPETITION OR THE PRESIDENT'S REEMPLOYMENT AGREEMENTS, SHOULD NOT INCLUDE INCREASED COSTS FOR ANY PERIOD BEYOND MAY 27, 1935, WHEN THE PROVISIONS OF THE ACT OF JUNE 16, 1933, UNDER WHICH THE CODES WERE APPROVED AND AGREEMENTS MADE, WERE NULLIFIED BY DECISION OF THE SUPREME COURT OF THE UNITED STATES, 295 U.S. 495.

ACTING COMPTROLLER GENERAL ELLIOTT TO THE SECRETARY OF THE INTERIOR, MARCH 22, 1938:

THERE HAS BEEN RECEIVED YOUR LETTER OF FEBRUARY 24, 1938, AS FOLLOWS:

THE FOLLOWING QUESTION, WHICH HAS ARISEN IN CONNECTION WITH THE EXAMINATION OF A CLAIM FILED WITH THIS DEPARTMENT PURSUANT TO THE PROVISIONS OF THE ACT OF JUNE 16, 1934 (48 STAT. 974), IS SUBMITTED TO YOU FOR DETERMINATION, IN VIEW OF THE FACT THAT AUTHORITY FOR THE ADJUSTMENT OF CLAIMS FILED UNDER THIS ACT, IS VESTED IN THE COMPTROLLER GENERAL.

IN AN ADMINISTRATIVE FINDING OF FACT CONTEMPLATED BY SECTION I OF THE ACT NAMED, SHOULD INCREASED COSTS ACCRUING SUBSEQUENT TO THE DECISION OF THE SUPREME COURT OF MAY 27, 1935, IN THE SCHECHTER CASE (295 U.S. 495) BE TAKEN INTO CONSIDERATION OR SHOULD THE FINDING BE LIMITED TO THE INCREASED COSTS ACCRUING UP TO MAY 27, 1935 (DATE OF THE DECISION), ON THE THEORY THAT ANY INCREASED COSTS THEREAFTER WERE VOLUNTARY?

THE CLAIM FILED RELATES TO CONTRACT OF MAY 3, 1933, 12R-3571, WITH THE ALLIS-CHALMERS MANUFACTURING COMPANY FOR HYDRAULIC TURBINES FOR THE BOULDER CANYON PROJECT AND THE DATE OF COMPLETION WAS AUGUST 26, 1936. COPY OF LETTER DATED JANUARY 26, 1938, BY THE CHIEF ENGINEER, BUREAU OF RECLAMATION, WHICH EXPLAINS THE SITUATION IN GREATER DETAIL, IS ENCLOSED. AN EARLY DECISION WILL BE APPRECIATED.

THE CONTRACTS WHICH WERE ENTERED INTO PRIOR TO AUGUST 10, 1933, DID NOT, OF COURSE, CONTAIN STIPULATIONS IN ACCORDANCE WITH THE EXECUTIVE ORDER NO. 6252, DATED AUGUST 19, 1933, FOR CODE COMPLIANCE AND THE ADMINISTRATIVE EXAMINATION AND REPORT SHOULD NOT INCLUDE INCREASED COST FOR ANY PERIOD BEYOND MAY 27, 1935, WHEN THE SCHECHTER DECISION, 295 U.S. 495, NULLIFIED THE PROVISIONS OF THE ACT OF JUNE 16, 1933, UNDER WHICH THE CODES WERE APPROVED AND THE PRESIDENT'S REEMPLOYMENT AGREEMENTS WERE MADE. THAT IS TO SAY, THE FINDING SHOULD BE LIMITED TO THE INCREASED COSTS ACCRUING UP TO MAY 27, 1935, IN THE PERFORMANCE OF CONTRACTS ENTERED INTO PRIOR TO AUGUST 10, 1933, WHERE INCREASED COST HAS BEEN CLAIMED UNDER THE ACT OF JUNE 16, 1934.