A-96535, SEPTEMBER 21, 1938, 18 COMP. GEN. 240

A-96535: Sep 21, 1938

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CONTRACTS - PAYMENTS IN ADDITION TO CONTRACT PRICE - ADEQUATE CONSIDERATION THEREFOR NOT SHOWN PAYMENT IS NOT AUTHORIZED FOR TELEPHONE TOLLS ALLEGEDLY INCURRED FOR CALLS FOR INFORMATION IN CONNECTION WITH FACTUAL DATA CREDIT REPORTS REPRESENTING THE VERY SERVICE REQUIRED TO BE PERFORMED AT A STATED CONTRACT PRICE UNDER A CONTRACT WITH THE IDENTICAL CREDIT REPORTING AGENCY TO WHOM REIMBURSEMENT OF THE TELEPHONE TOLLS IS BEING PROPOSED. 1938: THERE IS BEFORE THIS OFFICE FOR AUDIT BEFORE PAYMENT FEDERAL HOUSING ADMINISTRATION VOUCHER NO. 29184 IN FAVOR OF THE NATIONAL CONSUMER CREDIT REPORTING CORPORATION. FOR TELEPHONE TOLLS ALLEGED TO HAVE BEEN INCURRED FOR CALLS TO VARIOUS POINTS IN KANSAS.

A-96535, SEPTEMBER 21, 1938, 18 COMP. GEN. 240

CONTRACTS - PAYMENTS IN ADDITION TO CONTRACT PRICE - ADEQUATE CONSIDERATION THEREFOR NOT SHOWN PAYMENT IS NOT AUTHORIZED FOR TELEPHONE TOLLS ALLEGEDLY INCURRED FOR CALLS FOR INFORMATION IN CONNECTION WITH FACTUAL DATA CREDIT REPORTS REPRESENTING THE VERY SERVICE REQUIRED TO BE PERFORMED AT A STATED CONTRACT PRICE UNDER A CONTRACT WITH THE IDENTICAL CREDIT REPORTING AGENCY TO WHOM REIMBURSEMENT OF THE TELEPHONE TOLLS IS BEING PROPOSED, THERE NOT BEING SHOWN ANY CONSIDERATION FOR PAYMENT TO THE CONTRACTOR OF ANY AMOUNT IN ADDITION TO THE CONTRACT PRICE AND THERE BEING NO AUTHORITY FOR MODIFICATION OF A CONTRACT PREJUDICIAL TO THE INTERESTS OF THE UNITED STATES WITHOUT ADEQUATE CONSIDERATION THEREFOR.

ACTING COMPTROLLER GENERAL ELLIOTT TO THE ADMINISTRATOR, FEDERAL HOUSING ADMINISTRATION, SEPTEMBER 21, 1938:

THERE IS BEFORE THIS OFFICE FOR AUDIT BEFORE PAYMENT FEDERAL HOUSING ADMINISTRATION VOUCHER NO. 29184 IN FAVOR OF THE NATIONAL CONSUMER CREDIT REPORTING CORPORATION, 381 FOURTH AVENUE, NEW YORK, N.Y., IN THE AMOUNT OF $53.56, FOR TELEPHONE TOLLS ALLEGED TO HAVE BEEN INCURRED FOR CALLS TO VARIOUS POINTS IN KANSAS, MISSOURI, AND NEBRASKA IN CONNECTION WITH THE FURNISHING OF FACTUAL DATA REPORTS BY THE CLAIMANT'S TOPEKA, KANSAS, OFFICE UNDER CONTRACTS FH-220 AND FH-453, DATED JULY 10, 1936, AND AUGUST 7, 1937, RESPECTIVELY.

ATTACHED TO THE VOUCHER WHEN ORIGINALLY SUBMITTED ON SCHEDULE NO. 4697 OF YOUR ADMINISTRATION WAS AN ADMINISTRATIVE STATEMENT AS FOLLOWS:

IN CONNECTION WITH ATTACHED VOUCHER NO. 29184, THE FOLLOWING EXPLANATION IS OFFERED BY STATE DIRECTOR OF THIS ADMINISTRATION FOR KANSAS: "IN THESE PARTICULAR CASES INFORMATION RELATIVE TO SAME DID NOT SEEM TO SUFFICE THE REQUIREMENTS OF THE MORTGAGE RISK SECTION INASMUCH AS THE ADDITIONAL INFORMATION WHICH WE HAD NOT RECEIVED WAS HOLDING UP THE PROCESSING OF THE CASES, WE FELT THAT IN ORDER TO SPEED UP THIS SERVICE IT WAS NECESSARY FOR THE ABOVE AGENCIES TO SECURE WHAT ADDITIONAL INFORMATION WE DESIRED.'

THE VOUCHER WAS RETURNED WITHOUT CERTIFICATION FOR THE STATED REASON THAT INASMUCH AS CONTRACTS FH-220 AND FH-453 PROVIDED FOR FURNISHING FACTUAL DATA REPORTS AT $1 EACH, TELEPHONE TOLLS INCURRED IN DEVELOPING REPORTS SHOULD BE PAID BY THE CONTRACTOR, AND WAS RESUBMITTED ACCOMPANIED BY A LETTER FROM THE STATE DIRECTOR FOR KANSAS, DATED APRIL 21, 1938, AS FOLLOWS:

TO SPEED UP THE PROCESSING, IT WAS NECESSARY TO ALLOW THE CREDIT COMPANY TO GET ADDITIONAL INFORMATION FOR THE MORTGAGE RISK DEPARTMENT THROUGH TELEPHONE CALLS, AS IN THE STATE OF KANSAS IN SOME OF THE OUTLYING TOWNS, IT IS VERY HARD TO GET DETAILED INFORMATION THROUGH THE CREDIT COMPANY'S REPORTERS, AND THERE HAS BEEN CONSIDERABLE DELAY FOR THIS REASON.

SO IN THESE PARTICULAR BILLS, THE CREDIT COMPANY WAS AUTHORIZED BY THIS AGENCY TO GET THE INFORMATION BY TELEPHONE, AND WE FEEL THAT IT WAS ABSOLUTELY NECESSARY TO BE ABLE TO GIVE THE MORTGAGEES A PROMPT DECISION ON THEIR APPLICATIONS.

HOWEVER, THE VOUCHER WAS AGAIN RETURNED WITHOUT CERTIFICATION FOR THE REASON THAT IF THE REPORTS FURNISHED DID NOT CONTAIN THE REQUIRED INFORMATION ANY ADDITIONAL EXPENSE NECESSARY TO ACQUIRE SUCH INFORMATION WAS A PROPER OBLIGATION OF THE CONTRACTOR.

THEREAFTER THE VOUCHER WAS SUBMITTED FOR FURTHER CONSIDERATION BY LETTER OF THE ASSISTANT COMPTROLLER OF YOUR ADMINISTRATION DATED JULY 1, 1938, IN PART AS FOLLOWS:

IN THIS CONNECTION YOU ARE ADVISED THAT THE ABOVE CITED VOUCHER COVERS CHARGES FOR TELEPHONE CALLS TO VARIOUS LOCALITIES IN THE STATE OF KANSAS, INITIATED IN ORDER TO SECURE CREDIT INFORMATION ON CERTAIN INDIVIDUALS WHO HAD FILED APPLICATIONS FOR INSURED LOANS UNDER THE PROVISIONS OF TITLE II OF THE NATIONAL HOUSING ACT. CONTRACTS FH-239 AND FH-453, ENTERED INTO WITH NATIONAL CONSUMER CREDIT REPORTING CORPORATION, DO NOT REQUIRE THE CONTRACTOR TO FURNISH REPORTS IN A SPECIFIED NUMBER OF DAYS.

IN REGARD TO THE REPORTS INVOLVED, CONSIDERABLE PRESSURE WAS BEING BROUGHT TO BEAR BY SEVERAL MORTGAGEES TO SPEED UP THE PROCESSING OF THE CASES. IT WAS, THEREFORE, ADMINISTRATIVELY DETERMINED BY THE STATE DIRECTOR FOR KANSAS, TO BE IN THE BEST INTEREST OF THE GOVERNMENT TO SECURE THE REQUIRED REPORTS THROUGH TELEPHONIC COMMUNICATION RATHER THAN TO ORDER SAME THROUGH REGULAR CORRESPONDENCE CHANNELS, THEREBY ELIMINATING UNNECESSARY DELAY. AFTER A THOROUGH INVESTIGATION IT HAS DEVELOPED THAT THE STATEMENTS CONTAINED IN LETTER A-634, DATED APRIL 21, 1938, FROM HOMER C. BASTIAN, STATE DIRECTOR, AND ALSO IN ADMINISTRATIVE STATEMENT, BOTH ATTACHED TO THE VOUCHER, TO THE EFFECT THAT THE TELEPHONE TOLLS WERE INCURRED TO SECURE ADDITIONAL INFORMATION IS INCORRECT. THE DATA FURNISHED BY TELEPHONE WERE THE ORIGINAL REPORTS AND WERE LATER CONFIRMED BY WRITTEN REPORTS.

CONTRACTS FH-220 AND FH-453 PROVIDE FOR THE FURNISHING OF FACTUAL DATA REPORTS ON INDIVIDUALS WHO ARE MORTGAGORS IN MORTGAGES ON WHICH APPLICATION HAS BEEN MADE FOR INSURANCE UNDER THE PROVISIONS OF TITLE II OF THE NATIONAL HOUSING ACT, AS MAY BE REQUIRED BY INSURING OFFICES OF THE FEDERAL HOUSING ADMINISTRATION. SUCH REPORTS ARE TO COVER INFORMATION CALLED FOR ON THE STANDARDIZED REPORT FORMS ATTACHED TO THE RESPECTIVE CONTRACTS. IN VIEW OF THE COMPREHENSIVE NATURE OF THE DATA REQUIRED AND THE REPORTED DIFFICULTY IN OBTAINING DETAILED INFORMATION THROUGH THE CREDIT COMPANY'S REPORTERS, IT IS NOT UNDERSTOOD HOW THE GOVERNMENT WAS EXPECTED TO RECEIVE ANY BENEFIT FROM ORIGINAL REPORTS BASED, AS IN THE MAJORITY OF INSTANCES HERE INVOLVED, UPON A SINGLE LONG DISTANCE TELEPHONE CALL.

HOWEVER, WHETHER THE TOLL CHARGES FOR WHICH REIMBURSEMENT IS CLAIMED WERE INCURRED IN OBTAINING ADDITIONAL INFORMATION AS STATED BY THE STATE DIRECTOR OR ORIGINAL REPORTS AS STATED BY THE ASSISTANT COMPTROLLER, IT DOES NOT APPEAR THAT SUCH CHARGES WOULD HAVE BEEN INCURRED HAD THE CONTRACTOR'S REPORTERS RESPONDED PROMPTLY AND IN PROPER DETAIL TO THE REQUESTS OF YOUR ADMINISTRATION FOR FACTUAL DATA REPORTS. WHILE NO TIME WAS SPECIFIED IN THE CONTRACTS FOR THE FURNISHING OF REPORTS, THE INVITATION FOR BIDS IN EACH CASE PROVIDED THAT TO DETERMINE THE LOWEST RESPONSIBLE BIDDER, CONSIDERATION WOULD BE GIVEN TO THE FACILITIES FOR PROMPTLY FURNISHING REPORTS IN THE TERRITORY, SECTION OR SECTIONS COVERED BY THE BID. IN ANY EVENT, NO TIME FOR PERFORMANCE BEING SPECIFIED IN THE CONTRACTS, THE CONTRACTOR WAS BOUND TO FURNISH THE REPORTS WITHIN A REASONABLE TIME, HAVING REGARD TO THE SUBJECT MATTER OF THE CONTRACT.

THE PROVISIONS OF THE CONTRACTS REQUIRED THE FURNISHING OF A COMPLETE REPORT FOR THE PRICE OF $1 AND NO ADMINISTRATIVE OFFICER OF THE GOVERNMENT WAS AUTHORIZED TO MODIFY THE CONTRACTS PREJUDICIAL TO THE INTERESTS OF THE UNITED STATES WITHOUT ADEQUATE CONSIDERATION THEREFOR. SEE 15 COMP. GEN. 25 AND CASES CITED THEREIN. THE FACTS REPORTED DISCLOSE NO CONSIDERATION FOR PAYMENT TO THE CONTRACTOR OF ANY AMOUNT IN ADDITION TO THE CONTRACT PRICE IN CONNECTION WITH THE FURNISHING OF FACTUAL DATA REPORTS.

FURTHERMORE, EVEN IF THE CIRCUMSTANCES WERE SUCH AS TO JUSTIFY ADDITIONAL PAYMENTS, THE TELEPHONE TOLL CHARGES FOR WHICH REIMBURSEMENT IS CLAIMED ARE UNSUPPORTED BY TOLL TICKETS OR OTHER EVIDENCE AS TO THE CORRECTNESS THEREOF.

THEREFORE, UPON THE PRESENT RECORD NO PAYMENT IS AUTHORIZED ON THE VOUCHER HERE IN QUESTION, AND SAID VOUCHER WILL BE RETAINED IN THE FILES OF THIS OFFICE.