A-94160, MAY 5, 1938, 17 COMP. GEN. 917

A-94160: May 5, 1938

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THERE IS NO AUTHORITY FOR PAYMENT OF ANY AMOUNT IN ADDITION TO THE CONTRACT PRICE WHICH HAS ALREADY BEEN PAID. NOTWITHSTANDING THE CONTRACTOR MAY HAVE INCREASED WAGE RATES OF MINE EMPLOYEES. FOR DECISION WHETHER YOU ARE AUTHORIZED TO MAKE PAYMENT OF $105.61 ON THE VOUCHER STATED IN FAVOR OF THE BELLINGHAM COAL MINES UNDER WAR DEPARTMENT CONTRACT NO. THE COAL REQUIRED UNDER THE CONTRACT APPEARS TO HAVE BEEN DELIVERED TO THE SAID THREE ARMY FORTS IN ACCORDANCE WITH THE CONTRACT TERMS. CONTRACTOR URGES THAT IT IS ENTITLED TO AN ADDITIONAL PAYMENT OF $0.17384 PER TON. THE INCREASE IN THE PRICE AUTHORIZED BY THE CONTRACT WAS TO BE CALCULATED ON THE BASIS OF SIX-TENTHS OF THE PERCENTAGE OF THE ESTABLISHED INCREASE.

A-94160, MAY 5, 1938, 17 COMP. GEN. 917

CONTRACTS - INCREASED COSTS - WAGES - COAL CONTRACTS - BIDDER'S DESIGNATION OF SEVERAL CLASSES OF EMPLOYEES INSTEAD OF PREDOMINANT OCCUPATIONAL CLASS, AND CLAIMS SETTLEMENT PROCEDURE WHERE COAL PURCHASE SPECIFICATIONS AND CONTRACT PROVIDED FOR A PERCENTAGE CONTRACT PRICE ADJUSTMENT IN CASE OF WAGE CHANGES AFTER THE OPENING OF BIDS, BASED ON THE PREDOMINANT OCCUPATIONAL CLASS OF LABOR RECEIVING THE SAME WAGE RATE SPECIFIED BY THE CONTRACTOR, AND CONTRACTOR'S BID NEVERTHELESS SPECIFIED FOUR CLASSES OF EMPLOYEES RECEIVING TWO DIFFERENT WAGE RATES, THERE IS NO AUTHORITY FOR PAYMENT OF ANY AMOUNT IN ADDITION TO THE CONTRACT PRICE WHICH HAS ALREADY BEEN PAID, NOTWITHSTANDING THE CONTRACTOR MAY HAVE INCREASED WAGE RATES OF MINE EMPLOYEES, NOR MAY VOUCHERS SUCH AS HERE INVOLVED WHICH REPRESENT CLAIMS FOR DIRECT SETTLEMENT BY THIS OFFICE BE SETTLED BY A DISBURSING OFFICER.

ACTING COMPTROLLER GENERAL ELLIOTT TO LT. COL. E. T. COMEGYS, UNITED STATES ARMY, MAY 5, 1938:

THERE HAS BEEN RECEIVED BY EIGHTEENTH ENDORSEMENT, DATED APRIL 9, 1938, YOUR REQUEST (FOURTH ENDORSEMENT) OF NOVEMBER 12, 1937, FOR DECISION WHETHER YOU ARE AUTHORIZED TO MAKE PAYMENT OF $105.61 ON THE VOUCHER STATED IN FAVOR OF THE BELLINGHAM COAL MINES UNDER WAR DEPARTMENT CONTRACT NO. W-928-QM-24400, DATED AUGUST 7, 1936, FOR STIPULATED TONNAGE OF LUMP BITUMINOUS COAL TO BE FURNISHED F.O.B. DESTINATIONS, TO FORT LAWTON, FORT WORDEN, AND FORT FLAGLER, WASH., BY JUNE 30, 1937, AT THE GOVERNMENT'S CONVENIENCE.

THE COAL REQUIRED UNDER THE CONTRACT APPEARS TO HAVE BEEN DELIVERED TO THE SAID THREE ARMY FORTS IN ACCORDANCE WITH THE CONTRACT TERMS. THE CONTRACTOR HAS BEEN PAID THE STIPULATED CONTRACT TONNAGE PRICES FOR THE COAL FURNISHED UNDER THE CONTRACT. HOWEVER, CONTRACTOR URGES THAT IT IS ENTITLED TO AN ADDITIONAL PAYMENT OF $0.17384 PER TON, AMOUNTING TO $105.61, ON SHIPMENTS OF 607.47 TONS OF THE COAL TO FORT LAWTON, WASH., DELIVERED IN MAY AND JUNE 1937, ON ORDERS THEREFOR NUMBERED 10 AND 11,REPRESENTING INCREASED PRODUCTION COSTS OF SUCH COAL RESULTING FROM CHANGES IN THE WAGE SCHEDULE RATES OF THE MINE EMPLOYEES, EFFECTIVE JUNE 4, 1937.

THE SPECIFICATIONS, A PART OF THE CONTRACT, PROVIDED FOR A DELETION OF PARAGRAPH 3 "WAGE CALES" OF THE STANDARD PURCHASE CONDITIONS FOR COAL (FORM NO. 43) RELATIVE TO AN ADJUSTMENT OF THE STIPULATED CONTRACT PRICE IN THE EVENT OF CHANGES IN THE COST OF PRODUCTION DUE TO SUBSEQUENT CHANGES IN THE WAGE SCALES OF MINE EMPLOYEES, AND IN LIEU THEREOF THAT CERTAIN OTHER PROVISIONS BE SUBSTITUTED AS THEREIN SET FORTH. UNDER SUCH SUBSTITUTED PROVISIONS OF THE CONTRACT, WITH RESPECT TO CHANGES IN THE WAGE RATES AS SPECIFIED IN THE CONTRACTOR'S BID FOR THE PREDOMINANT OCCUPATIONAL CLASS OF MINE EMPLOYEES, THE INCREASE IN THE PRICE AUTHORIZED BY THE CONTRACT WAS TO BE CALCULATED ON THE BASIS OF SIX-TENTHS OF THE PERCENTAGE OF THE ESTABLISHED INCREASE.

THE "SPECIAL INSTRUCTIONS TO BIDDERS," A PART OF THE CONTRACT, PROVIDED:

2. THE REFERRED TO METHOD PROVIDES FOR AN ADJUSTMENT OF THE CONTRACT PRICE FOR A CHANGE IN WAGE RATES WITH MINE EMPLOYEES; IT IS BASED ON THE FOLLOWING REQUIREMENTS AND CONDITIONS:

(A) THE BIDDER MUST SPECIFY ON BIDDING FORM (PART C) THAT PARTICULAR OCCUPATIONAL CLASS OF MINE EMPLOYEES RECEIVING THE SAME WAGE RATE THAT HAS A PREDOMINANT EFFECT ON THE COST OF PRODUCING COAL AT THE MINE NAMED BY HIM; I.E., THAT PARTICULAR OCCUPATIONAL CLASS OF EMPLOYEES RECEIVING THE SAME WAGE RATE TO WHICH ON THE PAY ROLL A PREDOMINANT AMOUNT OF MONEY IS REGULARLY PAID FOR PRODUCING COAL. THE CLASS SELECTED SHALL NOT BE FOR SUPERVISORY OR CLERICAL EMPLOYEES.

(B) THE PREDOMINANT WAGE RATE CLASS OF EMPLOYEE SO SPECIFIED MUST BE DESCRIBED IN SUCH A MANNER THAT IT MAY BE CLEARLY IDENTIFIED IN THE WAGE AGREEMENT BETWEEN THE OPERATOR OF THE MINE AND THE MINE EMPLOYEES IN EFFECT ON THE DATE OF OPENING OF BIDS.

(C) IN EVENT OF A CHANGE IN THE WAGE RATE FOR THE PREDOMINANT OCCUPATIONAL CLASS OF LABOR SPECIFIED BY THE BIDDER, THE F.O.B. MINE PRICE IS MULTIPLIED BY A PERCENTAGE FACTOR OF 60 PERCENT, AND THE PRODUCT THEREOF IS MULTIPLIED BY THE PERCENT CHANGE IN THE WAGE RATE, AND THE RESULTANT OBTAINED IS THE AMOUNT THAT THE CONTRACT PRICE WILL BE INCREASED OR DECREASED ON ACCOUNT OF AN INCREASE OR DECREASE IN THE WAGE RATE.

(D) IT IS TO BE NOTED THAT THIS METHOD IS BASED ON THE F.O.B. MINE PRICE. IF THE INVITATION CALLS FOR BIDS FOR COAL ON ANY OTHER THAN THE F.O.B. MINE BASIS (THE BID PRICE INCLUDING FREIGHT RATE AND/OR COST OF TRUCKING), THE BIDDER MUST STATE ALSO IN HIS BID THE F.O.B. PRICE AT THE MINE NAMED.

3. FOLLOWING IS AN EXAMPLE OF APPLYING THE ABOVE STATED METHOD:

THE F.O.B. MINE PRICE STATED IN THE CONTRACT IS $2.00 PER TON.

THE PREDOMINANT OCCUPATIONAL CLASS OF MINE EMPLOYEES SPECIFIED BY THE CONTRACTOR IS "DRIVERS, BRAKEMEN, SPRAGGERS, SNAPPERS, COAL DRILLERS, TRACKMEN, WIREMEN, BONDERS, TIMBERMEN, BOTTOM ERS.' (THIS GROUP CLASSIFICATION MAY APPLY TO CERTAIN DISTRICTS ONLY.)

THE WAGE RATE IN EFFECT ON THE DATE OF OPENING OF BIDS IS $0.729 PER HOUR.

THE NEW WAGE RATE IS $0.802 PER HOUR.

THE INCREASE IN WAGE RATE IS 10.0 PERCENT.

THE INCREASE IN THE CONTRACT PRICE, USING THE FOLLOWING INDICATED FORMULA AND BY COMPUTATION S:

$2.00 TIMES 0.6 TIMES 0.100 EQUALS 12.0 CENTS PER TON

THIS ADJUSTMENT IN THE CONTRACT PRICE IS A COMPENSATING ONE FOR OFFSETTING CHANGES IN THE COST PER TON OF PRODUCING COAL AT THE MINE UNDER THE NEW WAGE SCALE COVERING ALL MINE EMPLOYEES AS COMPARED TO THE COST OF PRODUCING COAL UNDER THE WAGE SCALE WHICH WAS IN EFFECT ON THE DATE OF OPENING OF BIDS.

UNDER THE CONTRACT PROVISIONS, IT IS ONLY WHEN THERE WAS A CHANGE IN THE WAGE SCALE RATES OF THE "PREDOMINANT OCCUPATIONAL CLASS" OF LABOR SPECIFIED BY THE BIDDER, SUBSEQUENT TO THE DATE OF OPENING THE BIDS ON JULY 23, 1936, THAT THE STIPULATED TONNAGE PRICE OF $5.15 PER TON FOR THE INVOLVED SHIPMENTS OF COAL WAS TO BE ADJUSTED IN ACCORDANCE WITH THE CONTRACT TERMS. 17 COMP. GEN. 621, A-92372, MARCH 17, 1938, AND A 93062, MARCH 21, 1938.

THE RECORD IN THE INSTANT MATTER DISCLOSES THAT THE CONTRACTOR SUBMITTED IN ITS BID THE FOLLOWING INFORMATION RESPECTING THE "PREDOMINANT OCCUPATIONAL CLASS OF MINE EMPLOYEES," TO WIT:

THE PREDOMINANT OCCUPATIONAL CLASS OF MINE EMPLOYEES FOR USE IN CALCULATING CHANGE IN THE CONTRACT PRICE DUE TO A CHANGE IN THE WAGE RATE THEREFOR: MINERS ON TONNAGE BASIS, $1.02 PER TON; COMPANY MINERS, $5.90 FOR 7 HOURS; TRACKMEN, $5.90 FOR 7 HOURS; AND TIMBERMEN, $5.90 FOR 7 HOURS.

THUS, IT WOULD APPEAR THAT INSTEAD OF SPECIFYING IN ITS BID THE "PREDOMINANT OCCUPATIONAL LASS" OF MINE EMPLOYEES, THE CONTRACTOR SPECIFIED FOUR CLASSES OF EMPLOYEES AT TWO DIFFERENT WAGE RATES. THERE APPEARS TO HAVE BEEN NO AUTHORITY FOR THE CONTRACTOR TO SPECIFY IN ITS BID AS THE ,PREDOMINANT OCCUPATIONAL CLASS" THE FOUR CLASSES OF MINE EMPLOYEES RECEIVING DIFFERENT WAGE RATES, BECAUSE THE INSTRUCTIONS TO BIDDERS AND ACCOMPANYING SPECIFICATIONS AND SCHEDULES CLEARLY PROVIDED FOR SPECIFYING ONLY "THAT PARTICULAR OCCUPATIONAL CLASS OF MINE EMPLOYEES RECEIVING THE SAME WAGE RATE.'

UNDER THE FACTS AND CIRCUMSTANCES SHOWN AND THE TERMS OF THE CONTRACT, THERE APPEARS NO AUTHORITY FOR AN ADJUSTMENT OF THE STIPULATED CONTRACT TONNAGE PRICE OF $5.15 FOR THE 607.47 TONS OF COAL FURNISHED TO FORT LAWTON UNDER THE CONTRACT, INASMUCH AS THE CONTRACTOR IN ITS BID SPECIFIED FOUR CLASSES OF EMPLOYEES RECEIVING DIFFERENT WAGE RATES, INSTEAD OF ONE "PARTICULAR OCCUPATIONAL CLASS OF MINE EMPLOYEES RECEIVING THE SAME WAGE RATE.'

THEREFORE, ON THE PRESENT RECORD, THE CONTRACTOR DOES NOT APPEAR TO BE ENTITLED TO ANY INCREASE OVER THE PRICE OF $5.15 PER TON STIPULATED IN THE CONTRACT FOR THE 607.47 TONS FURNISHED THEREUNDER TO FORT LAWTON.

IN THIS CONNECTION IT MAY BE SAID THAT VOUCHERS SUCH AS THE ONE SUBMITTED REPRESENT CLAIMS FOR DIRECT SETTLEMENT BY THIS OFFICE, WHICH A DISBURSING OFFICER IS NOT AUTHORIZED TO SETTLE, AND ADMINISTRATIVE ACTION SHOULD BE ACCORDINGLY HEREAFTER. SEE A-92077, DATED MARCH 19, 1938. THE SUBMITTED PREAUDIT VOUCHER AND ATTACHED PAPERS WILL BE RETAINED IN THE FILES OF THIS OFFICE.