B-109758, OCTOBER 8, 1952, 32 COMP. GEN. 174

B-109758: Oct 8, 1952

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A SUBCONTRACTOR'S AGREEMENT TO FURNISH SUPPLIES OR SERVICES TO PRIME CONTRACTORS OF THE GOVERNMENT DOES NOT RESULT IN SUCH A PRIVITY OF CONTRACT AS IS NECESSARY TO SUPPORT A CLAIM BY A SUBCONTRACTOR DIRECTLY AGAINST THE GOVERNMENT. AN ATTORNEY WHO SUCCESSFULLY DEFENDED AN OVERTIME COMPENSATION SUIT BROUGHT BY EMPLOYEES AGAINST A COST -PLUS-A-FIXED-FEE CONTRACTOR IS NOT ENTITLED TO A DIRECT PAYMENT FROM THE GOVERNMENT FOR HIS SERVICES. 1952: FURTHER REFERENCE IS MADE TO YOUR LETTER OF APRIL 23. WHEREIN THERE WAS DISALLOWED YOUR CLAIM IN THE AMOUNT OF $325 FOR LEGAL FEES ALLEGED TO BE DUE UNDER CONTRACT NO. YOU SUBMITTED A BILL FOR $325 TO THE GOVERNMENT AS YOUR FEE WHICH WAS DISALLOWED BY THE SETTLEMENT OF APRIL 11.

B-109758, OCTOBER 8, 1952, 32 COMP. GEN. 174

CONTRACTS - PRIVITY - SUBCONTRACTORS, SUPPLIERS, ETC. A SUBCONTRACTOR'S AGREEMENT TO FURNISH SUPPLIES OR SERVICES TO PRIME CONTRACTORS OF THE GOVERNMENT DOES NOT RESULT IN SUCH A PRIVITY OF CONTRACT AS IS NECESSARY TO SUPPORT A CLAIM BY A SUBCONTRACTOR DIRECTLY AGAINST THE GOVERNMENT, AND THEREFORE, AN ATTORNEY WHO SUCCESSFULLY DEFENDED AN OVERTIME COMPENSATION SUIT BROUGHT BY EMPLOYEES AGAINST A COST -PLUS-A-FIXED-FEE CONTRACTOR IS NOT ENTITLED TO A DIRECT PAYMENT FROM THE GOVERNMENT FOR HIS SERVICES, EVEN THOUGH THE GOVERNMENT AUTHORIZED THE CONTRACTOR TO EMPLOY LEGAL COUNSEL AND CORRESPONDED WITH THE ATTORNEY DURING THE PROCEEDINGS.

COMPTROLLER GENERAL WARREN TO BERNARD B. SMITH, OCTOBER 8, 1952:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF APRIL 23, 1952, REQUESTING REVIEW OF SETTLEMENT DATED APRIL 11, 1952, WHEREIN THERE WAS DISALLOWED YOUR CLAIM IN THE AMOUNT OF $325 FOR LEGAL FEES ALLEGED TO BE DUE UNDER CONTRACT NO. W-958-ENG-1, DATED NOVEMBER 29, 1940.

IT APPEARS THAT CERTAIN EMPLOYEES OF SHREVE LAMB AND HARMON-1FAY, SPOFFORD AND THORNDIKE, THE CONTRACTORS WHO AGREED TO PERFORM ARCHITECTURAL AND ENGINEERING SERVICE FOR THE WAR DEPARTMENT--- NOW DEPARTMENT OF THE ARMY--- UNDER THE SUBJECT COST-PLUS-A-FIXED-FEE CONTRACT, FILED SUIT AGAINST THE SAID CONTRACTORS FOR OVER-TIME WAGES ALLEGEDLY DUE FOR SERVICES RENDERED IN CONNECTION WITH THEIR EMPLOYMENT. IT APPEARS FURTHER THAT YOU REPRESENTED SHREVE, LAMB AND HARMON-1FAY, SPOFFORD AND THORNDIKE, AND SUCCESSFULLY DEFENDED THE SUIT AGAINST THE CONTRACTORS. THEREAFTER, YOU SUBMITTED A BILL FOR $325 TO THE GOVERNMENT AS YOUR FEE WHICH WAS DISALLOWED BY THE SETTLEMENT OF APRIL 11, 1952, FOR THE REASONS SET FORTH THEREIN.

YOUR REQUEST FOR REVIEW OF THE SETTLEMENT APPEARS TO BE BASED ON THE CONTENTION THAT THE GOVERNMENT OBLIGATED ITSELF FOR THE PAYMENT OF THE FEES SINCE YOU HANDLED THE CASE AT THE EXPRESS REQUEST OF THE CORPS OF ENGINEERS, WAR DEPARTMENT; THAT YOUR AGREEMENT WITH VARIOUS OFFICERS OF THE SAID CORPS OF ENGINEERS WAS THAT YOU WOULD BE PAID THE REASONABLE LEGAL FEES FOR DEFENSE OF THE SUIT; AND THAT ALL PROCEEDINGS TAKEN BY YOU WERE AT THE DIRECTION AND REQUEST OF THE GOVERNMENT.

IN SUPPORT OF YOUR CONTENTION YOU HAVE FURNISHED PHOTOSTATIC COPIES OF THREE LETTERS WRITTEN BY THE DIVISION ENGINEER OF THE WAR DEPARTMENT. THE FIRST LETTER, WHICH IS DATED JANUARY 27, 1947, WAS ADDRESSED TO THE PRIME CONTRACTOR AND AUTHORIZED THAT FIRM TO HIRE PRIVATE COUNSEL FOR DEFENSE OF THE LAW SUIT INVOLVED. IN VIEW THEREOF AND IN THE ABSENCE OF EVIDENCE TO THE CONTRARY, IT MUST BE ASSUMED THAT THE BASIC AGREEMENT COVERING THE FURNISHING OF YOUR SERVICES WAS ENTERED INTO WITH THE PRIME CONTRACTOR RATHER THAN WITH THE GOVERNMENT. THE FACT THAT THE OTHER TWO LETTERS, WHICH WERE NOT WRITTEN UNTIL ALMOST TWO YEARS LATER OR AFTER A LARGE PART OF THE LEGAL SERVICES INVOLVED HAD BEEN RENDERED, WERE ADDRESSED TO YOU AND CONCERNED THE SUBJECT LAW SUIT IS NOT SUFFICIENT TO NEGATIVE SUCH ASSUMPTION. AGREEMENTS TO FURNISH SUPPLIES OR SERVICES TO PRIME CONTRACTORS OF THE GOVERNMENT AS A RULE DO NOT RESULT IN SUCH PRIVITY OF CONTRACT AS IS NECESSARY TO SUPPORT A CLAIM BY THE SUBCONTRACTORS DIRECTLY AGAINST THE UNITED STATES. SEE JOSEPH PETRIN, ET AL. V. UNITED STATES, 90 C.1CLS. 670; AND MERRITT V. UNITED STATES, 267 U.S. 338. SUCH CLAIMS ARE PRIMARILY FOR CONSIDERATION BY THE PRIME CONTRACTORS WHO IN TURN MAY FILE THEIR CLAIMS AGAINST THE GOVERNMENT UNDER THEIR PRIME CONTRACTS.

ACCORDINGLY, ON THE PRESENT RECORD THERE DOES NOT APPEAR ANY LEGAL BASIS ON WHICH YOUR CLAIM PROPERLY MAY BE CONSIDERED HERE AND THE SETTLEMENT OF APRIL 11, 1952, IS SUSTAINED.