A-94442, MAY 11, 1938, 17 COMP. GEN. 929

A-94442: May 11, 1938

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ADJUSTMENT OF THE CONTRACT PRICE MAY NOT NOW BE MADE NOTWITHSTANDING THE CONTRACTOR MAY HAVE INCREASED WAGE RATES OF MINE EMPLOYEES. OR PROOF AS TO WHAT THE PREDOMINANT CLASS WAS. THE CONTRACT FURTHER PROVIDED THAT THE PRICES SPECIFIED THEREIN WERE BASED UPON THE WAGE SCALE IN EFFECT WITH MINE EMPLOYEES ON THE DATE OF OPENING OF BIDS AND THAT ANY CHANGES IN THE SAID WAGE SCALE SHOULD INCREASE OR DECREASE THE CONTRACT PRICE OF COAL. APPROVED GENERALLY FOR THE MINING DISTRICT IN WHICH THE MINE HEREIN NAMED IS LOCATED. ACCORDING TO WHETHER THE WAGE RATE IS INCREASED OR DECREASED. BY AN AMOUNT WHICH IS THE PRODUCT OF THE F.O.B. IF THE CHANGE IS AN INCREASE IN THE WAGE RATE FOR THE STATED CLASS OF EMPLOYEES.

A-94442, MAY 11, 1938, 17 COMP. GEN. 929

CONTRACTS - INCREASED COSTS - WAGES - COAL CONTRACTS BIDDER'S DESIGNATION OF SEVERAL CLASSES OF EMPLOYEES INSTEAD OF PREDOMINANT OCCUPATIONAL CLASS - SUBSEQUENT SELECTION OR PROOF AS TO THE PREDOMINANT CLASS WHERE COAL PURCHASE CONDITIONS AND CONTRACT PROVIDED FOR A PERCENTAGE CONTRACT PRICE ADJUSTMENT IN CASE OF WAGE CHARGES AFTER THE OPENING OF BIDS, BASED ON THE PREDOMINANT OCCUPATIONAL CLASS OF LABOR RECEIVING THE SAME WAGE RATE SPECIFIED BY THE CONTRACTOR, AND THE CONTRACTOR'S BID NEVERTHELESS SPECIFIED SEVERAL CLASSES OF EMPLOYEES RECEIVING SEVERAL DIFFERENT WAGE RATES, ADJUSTMENT OF THE CONTRACT PRICE MAY NOT NOW BE MADE NOTWITHSTANDING THE CONTRACTOR MAY HAVE INCREASED WAGE RATES OF MINE EMPLOYEES, AS THE CONTRACT DOES NOT AUTHORIZE--- AFTER A CHANGE IN THE WAGE RATES AT THE MINE--- THE SELECTION OF A PREDOMINANT CLASS, OR PROOF AS TO WHAT THE PREDOMINANT CLASS WAS.

ACTING COMPTROLLER GENERAL ELLIOTT TO THE MOFFAT COAL CO., MAY 11, 1938:

BY LETTER OF FEBRUARY 28, 1838, YOU REQUESTED REVIEW OF SETTLEMENT OF THIS OFFICE DATED FEBRUARY 17, 1938, WHICH DISALLOWED YOUR CLAIM FOR $190.40, REPRESENTING INCREASED LABOR COST OF THE PRODUCTION OF 2,716.10 NET TONS OF COAL DELIVERED TO THE WAR DEPARTMENT DURING THE PERIOD APRIL 1 TO JUNE 30, 1937, UNDER CONTRACT NO. W-503-QM-16464, DATED AUGUST 26, 1936.

UNDER THE TERMS OF THE CONTRACT YOU AGREED TO DELIVER TO THE QUARTERMASTER, FORT FRANCIS E. WARREN, WYO., F.O.B. MINES, APPROXIMATELY 5,500 NET TONS OF COAL FROM EACH OF TWO MINES, THE MOFFAT MINE AND THE HARRIS MINE, AT PRICES OF $1.078 AND $0.9702 PER TON, RESPECTIVELY. THE CONTRACT FURTHER PROVIDED THAT THE PRICES SPECIFIED THEREIN WERE BASED UPON THE WAGE SCALE IN EFFECT WITH MINE EMPLOYEES ON THE DATE OF OPENING OF BIDS AND THAT ANY CHANGES IN THE SAID WAGE SCALE SHOULD INCREASE OR DECREASE THE CONTRACT PRICE OF COAL, AS FOLLOWS:

IN THE EVENT OF A CHANGE IN THE WAGE RATE FOR THE HEREIN SPECIFIED PREDOMINANT OCCUPATIONAL CLASS OF MINE EMPLOYEES, APPROVED GENERALLY FOR THE MINING DISTRICT IN WHICH THE MINE HEREIN NAMED IS LOCATED, THE CONTRACT PRICE SHALL BE INCREASED OR DECREASED ON ANY TONNAGE SHIPPED FROM THE MINE AFTER DATE OF SUCH INCREASE OR DECREASE IN THE WAGE RATE, ACCORDING TO WHETHER THE WAGE RATE IS INCREASED OR DECREASED, BY AN AMOUNT WHICH IS THE PRODUCT OF THE F.O.B. MINE PRICE TIMES 0.6 TIMES THE PERCENT CHANGE IN THE WAGE RATE EXPRESSED AS A DECIMAL (THE PERCENT INCREASE OR DECREASE IN THE WAGE RATE SHALL BE COMPUTED TO THE NEAREST TENTH PERCENT AND THE INCREASE OR DECREASE IN THE CONTRACT PRICE SHALL BE COMPUTED TO THE NEAREST TENTH OF A CENT). IF THE CHANGE IS AN INCREASE IN THE WAGE RATE FOR THE STATED CLASS OF EMPLOYEES, THE RIGHT IS RESERVED TO THE CONTRACTING OFFICER TO DISALLOW ANY INCREASE IN THE CONTRACT PRICE IF IN HIS OPINION THE INCREASE IN THE WAGE RATE AS REPORTED BY THE CONTRACTOR WAS NOT APPROVED GENERALLY BY THE OPERATORS OF MINES IN THE MINING DISTRICT IN WHICH THE MINE NAMED IS LOCATED, AND THE CONTRACTING OFFICER'S DECISION SHALL BE FINAL AND CONCLUSIVE ON THE PARTIES HERETO SUBJECT ONLY TO APPEAL, WITHIN 60 DAYS, BY THE CONTRACTOR TO THE HEAD OF THE DEPARTMENT CONCERNED, WHOSE DECISION ON SUCH APPEAL SHALL BE FINAL AND CONCLUSIVE ON THE PARTIES HERETO. SUCH DETERMINED INCREASE OR DECREASE IN THE CONTRACT PRICE SHALL BE FINAL AND CONCLUSIVE, AND NO ADDITIONAL CLAIM BY THE CONTRACTOR WILL BE CONSIDERED COVERING ANY CHANGES IN WAGE RATES OF OTHER CLASSES OF MINE LABOR EMPLOYED ON A PER TON, OR A MONTHLY, OR AN HOURLY, OR ANY OTHER BASIS, OR OR FACTORS ENTERING INTO THE COST OF PRODUCING COAL AT THE MINE NAMED.

THE SPECIAL PURCHASE CONDITIONS UNDER WHICH YOUR BID WAS SUBMITTED, PROVIDED:

A. 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:

(1) THE BIDDER MUST SPECIFY ON THE APPROPRIATE BIDDING FORM 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 PAYROLL A PREDOMINANT AMOUNT OF MONEY IS REGULARLY PAID FOR PRODUCING COAL. THE CLASS SELECTED SHALL NOT BE FOR SUPERVISORY OR CLERICAL EMPLOYEES.

(2) THE PREDOMINANT WAGE RATE CLASS OF EMPLOYEES 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.

YOU STATED IN YOUR BID THAT THE PREDOMINANT OCCUPATIONAL CLASS OF MINE EMPLOYEES FOR USE IN CALCULATING A CHANGE IN THE CONTRACT PRICE DUE TO CHANGE IN THE WAGE RATE THEREFOR WAS: "MINERS, CUTTERS, LOADERS, DRILLERS, SHOT FIRERS, AND ALL OTHER UNDERGROUND LABOR. ALL TIPPLE, POWER HOUSE, AND OTHER OUTSIDE LABOR EXCLUSIVE OF CLERICAL FORCE.'

IT APPEARS THERE WAS AN INCREASE IN THE WAGE SCALE OF MINE EMPLOYEES ON APRIL 1, 1937, AND THAT THEREAFTER YOUR DELIVERED 2,716.10 NET TONS OF COAL UNDER THE CONTRACT AND FILED CLAIM FOR $190.40, REPRESENTING THE INCREASED LABOR COST OF PRODUCTION OF THE COAL ON THE BASIS OF THE FORMULA SET FORTH IN THE CONTRACT AS APPLIED TO THE VARIOUS CLASSES OF EMPLOYEES YOU NAMED IN THE BID AS BEING THE "PREDOMINANT OCCUPATIONAL CLASS" OF MINE EMPLOYEES RECEIVING THE SAME WAGE RATE. THE SETTLEMENT OF THIS OFFICE DATED FEBRUARY 17, 1938, DISALLOWED YOUR CLAIM FOR THE REASON THAT IN FILING YOUR BID YOU FAILED TO SPECIFY THE PREDOMINANT OCCUPATIONAL CLASS OF MINE EMPLOYEES AS REQUIRED BUT, ON THE CONTRARY, LISTED NUMEROUS CLASSES OF MINE EMPLOYEES.

THE SPECIAL PURCHASE CONDITIONS, QUOTED ABOVE, SPECIFICALLY AND CLEARLY MADE IT A CONDITION PRECEDENT TO AN ADJUSTMENT OF THE CONTRACT PRICE THAT THE BIDDER SPECIFY IN THE BID, IN SUCH MANNER THAT IT MIGHT BE CLEARLY IDENTIFIED IN THE WAGE AGREEMENT,"THAT PARTICULAR OCCUPATIONAL CLASS OF MINE EMPLOYEES RECEIVING THE SAME WAGE RATE THAT HAS A PREDOMINANT EFFECT ON THE COST OF PRODUCING" THE COAL TO BE FURNISHED. YOU FAILED TO SO SPECIFY THE PREDOMINANT CLASS BUT INSTEAD NAMED SEVERAL CLASSES OF EMPLOYEES RECEIVING SEVERAL DIFFERENT WAGE RATES. THE CONTRACT MAKES NO PROVISION FOR AN ADJUSTMENT OF THE PRICES STIPULATED THEREIN UNDER SUCH CIRCUMSTANCES AND, ACCORDINGLY, NO ADJUSTMENT IS AUTHORIZED OR LEGALLY MAY BE MADE.

IN YOUR LETTER OF FEBRUARY 28, 1938, REQUESTING RECONSIDERATION OF THE MATTER, YOU STATE IT HAS BEEN DETERMINED THAT THE PREDOMINANT OCCUPATIONAL CLASS OF MINE EMPLOYEES WAS "MINERS EMPLOYED ON A DAY OR HOURLY RATE ON MECHANICAL LOADING AND CONVEYOR DEVICES.' YOU HAVE ACCORDINGLY REVISED YOUR CLAIM TO A TOTAL OF $202 BY APPLYING THE CONTRACT FORMULA TO THE INCREASE AS TO THIS CLASS OF EMPLOYEES. THE CONTRACT AUTHORIZES AN INCREASE IN THE PRICE OF COAL ONLY ON THE BASIS OF AN INCREASE IN THE WAGE RATE OF A PREDOMINANT CLASS PREVIOUSLY SPECIFIED IN THE BID. YOU FAILED TO SPECIFY IN THE BID THE PARTICULAR PREDOMINANT CLASS AND, ACCORDINGLY, AN ADJUSTMENT OF THE CONTRACT PRICE MAY NOT NOW BE MADE, INASMUCH AS THE CONTRACT DOES NOT AUTHORIZE--- AFTER A CHANGE IN THE WAGE RATES AT THE MINE--- THE SELECTION OF A PREDOMINANT CLASS, OR PROOF AS TO WHAT THE PREDOMINANT CLASS WAS.

ACCORDINGLY, THE SETTLEMENT OF FEBRUARY 17, 1938, MUST BE, AND IS SUSTAINED.