B-120535, JUL. 19, 1955

B-120535: Jul 19, 1955

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TO MOYER BROTHERS: REFERENCE IS MADE TO YOUR VARIOUS CLAIMS WHICH AROSE IN CONNECTION WITH THE PERFORMANCE OF CONTRACTS NOS. THE CLAIMS WILL BE CONSIDERED IN THE ORDER PRESENTED IN YOUR ATTORNEY'S SUMMARY AND BRIEF WHICH WAS ADDRESSED TO HONORABLE JAMES E. WERE FORWARDED TO THE HOUSING AND HOME FINANCE AGENCY FOR FURTHER CONSIDERATION AND IN HIS REPORTS TO THIS OFFICE THE COMMISSIONER OF THAT AGENCY STATES THAT THE BRIEFS PRESENT NO ADDITIONAL FACTS OR INFORMATION WHICH WOULD SERVE TO ALTER THE FINDINGS PREVIOUSLY MADE BY THE DULY AUTHORIZED ADMINISTRATIVE OFFICIALS. THE AMOUNTS CLAIMED WERE STATED TO HAVE BEEN BASED ON THE SAME PERCENTAGES AS USED FOR FIXED OVERHEAD AND FIXED FEE ON THE ORIGINAL NOTICES TO PROCEED.

B-120535, JUL. 19, 1955

TO MOYER BROTHERS:

REFERENCE IS MADE TO YOUR VARIOUS CLAIMS WHICH AROSE IN CONNECTION WITH THE PERFORMANCE OF CONTRACTS NOS. HA/R-VIII/VPH-9 AND HA/R-II/ VPH-21, ENTERED INTO BY THE FEDERAL PUBLIC HOUSING AUTHORITY. THE CLAIMS WILL BE CONSIDERED IN THE ORDER PRESENTED IN YOUR ATTORNEY'S SUMMARY AND BRIEF WHICH WAS ADDRESSED TO HONORABLE JAMES E. VAN ZANDT UNDER DATE OF JUNE 21, 1954. THE BRIEF AND A SUPPLEMENT THERETO DATED MARCH 31, 1955, WERE FORWARDED TO THE HOUSING AND HOME FINANCE AGENCY FOR FURTHER CONSIDERATION AND IN HIS REPORTS TO THIS OFFICE THE COMMISSIONER OF THAT AGENCY STATES THAT THE BRIEFS PRESENT NO ADDITIONAL FACTS OR INFORMATION WHICH WOULD SERVE TO ALTER THE FINDINGS PREVIOUSLY MADE BY THE DULY AUTHORIZED ADMINISTRATIVE OFFICIALS.

CONTRACT NO. HA/R-II/VPH-21

1.

ADDITIONAL OVERHEAD AND FEE

THE RECORD DISCLOSES THAT ON OR ABOUT JULY 28, 1947, YOU SUBMITTED CLAIMS IN THE TOTAL AMOUNT OF $80,578.28 FOR ADDITIONAL OVERHEAD AND FIXED FEE ON THE AMOUNT OF THE OVER-RUN ON FOUR OF THE PROJECTS COVERED BY CONTRACT NO. HA/R-II/VPH-21. THE AMOUNTS CLAIMED WERE STATED TO HAVE BEEN BASED ON THE SAME PERCENTAGES AS USED FOR FIXED OVERHEAD AND FIXED FEE ON THE ORIGINAL NOTICES TO PROCEED. ON FEBRUARY 19, 1948, THE CONTRACTING OFFICER ADVISED YOU THAT YOUR CLAIMS WERE REJECTED BECAUSE HE CONSIDERED THE ALLEGED ADDITIONAL WORK AS BEING WITHIN THE SCOPE OF THE CONTRACT. YOU APPEALED THIS RULING TO THE AUTHORIZED REPRESENTATIVE OF THE HEAD OF THE DEPARTMENT WHO, ON AUGUST 5, 1949, ADVISED YOU THAT YOUR CLAIMS FOR OVERHEAD AND FIXED FEE WERE DENIED. YOU NOW ADMIT THAT THE AMOUNT OF THIS CLAIM WAS BASED ON ARBITRARY DETERMINATIONS BUT SUBMIT THAT, UNDER THE TERMS OF THE CONTRACT, YOU ARE ENTITLED TO A "MORAL ADJUSTMENT OF THIS CLAIM," ON THE BASIS THAT IT STIPULATES VARIOUS ITEMS WHICH YOU STATE WERE NOT WITHIN THE ORIGINAL CONTEMPLATION OF THE CONTRACT OR REPRESENTED SUBSTANTIAL CHANGES IN THE CONTRACT.

PERTINENT PROVISIONS OF THE CONTRACT ARE AS FOLLOWS:

ARTICLE 2, ESTIMATED COST, OF THE CONTRACT.

"* * * IT IS EXPRESSLY UNDERSTOOD, HOWEVER, THAT NEITHER THE GOVERNMENT NOR THE CONTRACTOR GUARANTEES THE CORRECTNESS OF THESE ESTIMATES. * * *"

ARTICLE 3, CONSIDERATION, OF THE CONTRACT.

"/A) THE REGIONAL DIRECTOR * * * SHALL STATE IN THE NOTICE TO PROCEED AN ESTIMATED CONSTRUCTION COST (WHICH SHALL BE THE SAME AS THE ESTIMATED CONSTRUCTION COST PLUS OVERHEAD FOR THE PROPER CATEGORY OF CONSTRUCTION SCHEDULED BELOW TIMES THE NUMBER OF FINISHED DWELLING UNITS ASSIGNED THE CONTRACTOR, EXCLUSIVE OF THE CONTRACTOR'S FEE). THE CONTRACTOR'S FIXED FEE WILL ALSO BE STATED AND SHALL BE DETERMINED BY APPLYING THE FEE STATED BELOW FOR THE PROPER CATEGORY OF CONSTRUCTION TIMES THE NUMBER OF FINISHED DWELLING UNITS ASSIGNED THE CONTRACTOR * * *.'

"/B) * * * THE GOVERNMENT AGREES TO PAY THE CONTRACTOR THE TOTAL APPROVED COST OF PERFORMING THE WORK, PLUS A FIXED FEE IN THE AMOUNT PROVIDED IN THE NOTICE TO PROCEED, PLUS THE FIXED AMOUNT FOR OVERHEAD EXPENSES AS PROVIDED IN SUBSECTION (C) OF THIS ARTICLE AND PARAGRAPH 6 (B) OF THE GENERAL CONDITIONS * * *. THE CONTRACTOR AGREES THAT THE ESTIMATED CONSTRUCTION COST IS BASED UPON FINAL WORKING DRAWINGS OR UPON PRELIMINARY DRAWINGS SUFFICIENT TO INDICATE THE SIZE, LOCATION AND NATURE OF THE PROJECT OR PROJECTS AND THE CONDITIONS OF WORK TO PERMIT THE DETERMINATION OF THE CONTRACTOR'S FIXED FEE. THE CONTRACTOR AGREES THAT NO CLAIM OR DEMAND SHALL BE MADE AGAINST THE GOVERNMENT FOR INCREASE IN THE FIXED FEE BASED ON ANY FURTHER DETAILED DRAWINGS OR CHANGES IN DRAWINGS UNLESS SUCH CHANGES ARE INCIDENT TO INCREASING THE NUMBER OF DWELLING UNITS OF THE PROJECT OR PROJECTS. THERE SHALL BE NO ADJUSTMENT OF THE FIXED FEE NOR ANY CLAIM THEREFOR BASED ON ANY ERRORS OR OMISSIONS IN COMPUTING THE ESTIMATED COST OF WORK * * *.'

"/C) THE CONTRACTOR AGREES THAT THE CONTRACTOR'S OVERHEAD SHOULD APPROXIMATE THE AMOUNTS OF OVERHEAD PER FINISHED DWELLING UNIT AS SET FORTH IN ARTICLE 3 TO THE PROPER CATEGORY OF FINISHED DWELLING UNITS ASSIGNED THE CONTRACTOR AND AGREES TO MAKE NO CLAIM AGAINST THE GOVERNMENT OR SUBMIT ANY VOUCHER FOR REIMBURSEMENT OF OVERHEAD EXPENSES BEYOND THOSE AMOUNTS PER FINISHED DWELLING UNITS ASSIGNED THE CONTRACTOR.'

SECTION 13. ADJUSTMENT OF FEE, OF THE GENERAL CONDITIONS

"THE CONTRACTING OFFICER MAY, AT ANY TIME, BY A WRITTEN ORDER, MAKE CHANGES IN THE DRAWINGS OF SPECIFICATIONS FOR THE WORK, ISSUE ADDITIONAL INSTRUCTIONS, REQUIRE ADDITIONAL WORK, OR DIRECT THE OMISSION OF PORTIONS OF THE WORK COVERED BY THE CONTRACT. SUBJECT TO ARTICLE 3 OF THE CONTRACT, IF SUCH ACTION CAUSES A MATERIAL INCREASE OR DECREASE IN THE AMOUNT OR THE CHARACTER OF THE WORK TO BE DONE UNDER THE CONTRACT, AN ADJUSTMENT OF THE AMOUNT OF THE CONTRACTOR'S FEE SHALL BE MADE AND THE CONTRACT SHALL BE MODIFIED IN WRITING ACCORDINGLY * * *"

SECTION 38. DISPUTES, OF THE GENERAL CONDITIONS.

"ALL DISPUTES CONCERNING QUESTIONS OF FACT ARISING UNDER THE CONTRACT SHALL BE DECIDED BY THE CONTRACTING OFFICER SUBJECT TO WRITTEN APPEAL WITHIN 30 DAYS BY THE CONTRACTOR TO THE HEAD OF THE DEPARTMENT CONCERNED OR HIS DULY AUTHORIZED REPRESENTATIVE, * * *.'

IT IS REPORTED THAT THE ESTIMATED COST, THE FIXED OVERHEAD AND THE FIXED FEE WERE CORRECTLY COMPUTED FROM THE SCHEDULES AND IN ACCORDANCE WITH THE PROVISIONS OF ARTICLES 2 AND 3 OF THE CONTRACT, QUOTED ABOVE. IT WILL BE NOTED THAT NEITHER THE GOVERNMENT NOR THE CONTRACTOR GUARANTEED THE CORRECTNESS OF THE ESTIMATED COST. FURTHERMORE, YOU AGREED THAT THERE WOULD BE NO ADJUSTMENT OF THE FIXED FEE NOR ANY CLAIM THEREFOR BASED ON ANY ERRORS OR OMISSIONS IN COMPUTING THE ESTIMATED COST OF THE WORK AND YOU FURTHER AGREED TO MAKE NO CLAIM AGAINST THE GOVERNMENT OR SUBMIT ANY VOUCHER FOR REIMBURSEMENT OF OVERHEAD EXPENSES BEYOND THOSE AMOUNT PER FINISHED DWELLING UNITS ASSIGNED TO YOU. CONSIDERING THE ABOVE PROVISIONS OF THE CONTRACT AND SINCE IT WAS DETERMINED BY THE REPRESENTATIVE OF THE HEAD OF THE DEPARTMENT THAT THE VARIOUS ITEMS FORMING THE BASIS OF THE CLAIM DID NOT CAUSE A MATERIAL INCREASE IN THE AMOUNT OR CHARACTER OF THE WORK TO BE DONE ON THE CONTRACT OR THAT THE ITEMS WERE NOT INCIDENT TO INCREASING THE NUMBER OF DWELLING UNITS OF THE PROJECT OR PROJECTS, THAT OFFICIAL HAD NO ALTERNATIVE BUT TO REJECT YOUR APPEAL. MOREOVER, INSOFAR AS MATTERS OF FACT ARE CONCERNED, THE DECISION OF THE HEAD OF THE DEPARTMENT UNDER THE "DISPUTES" CLAUSE OF THE CONTRACT (SECTION 38 OF THE GENERAL CONDITIONS) IS FINAL AND CONCLUSIVE ON THIS OFFICE AND THE COURTS UNLESS THE DECISION COULD BE SAID TO BE FRAUDULENT, CAPRICIOUS OR ARBITRARY, OR SO GROSSLY ERRONEOUS AS NECESSARILY TO IMPLY BAD FAITH, OR IS NOT SUPPORTED BY SUBSTANTIAL EVIDENCE. SEE PUBLIC LAW 356, APPROVED MAY 11, 1954, 68 STAT. 81.

2.

RENTAL OF STORAGE YARDS AND SHEDS AND OFFICE SPACE

IN SUBMITTING THIS CLAIM, AMOUNTING TO $12,235, YOU ADMIT THAT THERE IS NO WRITTEN AGREEMENT, LEASE OR OTHER DOCUMENT COVERING THE OCCUPANCY OF THE AREAS INVOLVED. IN THIS CONNECTION, IT IS REPORTED ADMINISTRATIVELY THAT STATEMENTS OF INDIVIDUALS ALLEGED TO HAVE OCCUPIED THE OFFICE SPACE ARE CONFLICTING BUT THE INDICATION IS THAT THE USE WHICH WAS MADE OF ALL SPACES INVOLVED WAS MORE ADVANTAGEOUS TO YOU THAN TO THE GOVERNMENT AND THAT ANY SPACES THAT WERE USED WERE NOT AS GREAT AS CLAIMED. FURTHER, IT IS REPORTED THAT YOUR CLAIMS WITH RESPECT TO QUANTITIES AND TIME OF RECEIPT OF MATERIALS WERE NOT SUBSTANTIATED BY WAYBILLS RECEIVING THE INSPECTION REPORTS AND OTHER RECORDS MADE CURRENTLY SO AS TO JUSTIFY AN ALLOWANCE FOR STORAGE CHARGES. IN THIS CONNECTION, IT APPEARS THAT AFTER COMPLETION OF THE PROJECTS YOU PURCHASED THE RESIDUE OF THE GOVERNMENT- OWNED SURPLUS MATERIALS BASED ON A BID SUBMITTED BY YOU WHICH REPORTEDLY IMPLIED THAT STORAGE CHARGES WOULD BE MADE ONLY IF THE MATERIALS WERE SOLD TO OTHERS AND WERE NOT PROMPTLY REMOVED FROM YOUR YARD. FOR THE ABOVE AND OTHER REASONS MORE FULLY SET FORTH IN THE DETERMINATION OF THE AUTHORIZED REPRESENTATIVE OF THE HEAD OF THE DEPARTMENT, DATED AUGUST 5, 1949, YOUR CLAIM FOR THIS ITEM WAS DENIED BY THAT OFFICIAL AND PROPERLY MAY NOT BE ALLOWED BY THIS OFFICE.

CONTRACT NO. HA/R-VIII/VPH-9

1.

ADDITIONAL OVERHEAD AND FEE

THIS CLAIM, ORIGINALLY ASSERTED FOR $105,135.19, IS BASED ON THE SAME CONTENTIONS MADE BY YOU WITH RESPECT TO CLAIM NO. 1 UNDER CONTRACT NO. HA/R-II/VPH-21, DISCUSSED ABOVE. BRIEFLY, IT IS A CLAIM FOR AN ADDITIONAL FIXED OVERHEAD AND FEE ON ALL OF THE WEST VIRGINIA PROJECTS COVERED BY THE CONTRACT INVOLVED BECAUSE THE FINAL CONSTRUCTION COSTS EXCEEDED THE ESTIMATED CONSTRUCTION COSTS SET FORTH IN THE NOTICE TO PROCEED.

THE RECORD SHOWS THAT, AFTER THE CONTRACTING OFFICER DENIED YOUR CLAIM, YOU FAILED TO APPEAL SUCH ACTION TO THE HEAD OF THE DEPARTMENT AS PROVIDED BY SECTION 38 OF THE GENERAL CONDITIONS UNTIL LONG AFTER THE 30-DAY PERIOD FOR SUBMITTING SUCH AN APPEAL HAD EXPIRED. ACCORDINGLY, AS POINTED OUT BY THE HEAD OF THE DEPARTMENT IN HIS FINDING OF AUGUST 20, 1948, YOU FAILED TO PERFECT AN APPEAL FROM THE CONTRACTING OFFICER'S FINDINGS UNDER THE "DISPUTES" PROVISION OF THE CONTRACT AND SUCH FINDINGS BECAME FINAL AND CONCLUSIVE. AS STATED BY THE SUPREME COURT IN THE CASE OF UNITED STATES V. CALLAHAN WALKER CO., 317 U.S. 56, 61 THE ADMINISTRATIVE PROCEDURE PRESCRIBED BY SUCH A PROVISION CONSTITUTES "THE ONLY AVENUE FOR RELIEF.' EVEN IF YOUR APPEAL HAD BEEN PERFECTED, THE HEAD OF THE DEPARTMENT APPARENTLY WOULD HAVE DENIED THIS CLAIM, SINCE HE HAS FOUND THAT THE WORK FOR WHICH THE ADDITIONAL OVERHEAD AND FEE IS CLAIMED FELL WITHIN THE CONTEMPLATION OF THE CONTRACT; THAT IT WAS NOT A MATERIAL INCREASE IN THE AMOUNT OR THE CHARACTER OF THE WORK TO BE DONE UNDER THE CONTRACT; AND THAT IT WAS NOT INCIDENT TO INCREASING THE NUMBER OF DWELLING UNITS OF THE PROJECT OR PROJECTS (SEE ARTICLE 3 (B) OF THE CONTRACT). IT FOLLOWS THAT THERE IS NO LEGAL OR OTHER BASIS FOR THE ALLOWANCE OF THIS CLAIM.

2.

CLAIM FOR INCREASE IN ADJUSTMENT OF FIXED FEE AND OVERHEAD ON

TERMINATED UNITS.

THE RECORD SHOWS THAT THE PROJECT INVOLVED WAS ORIGINALLY COMPRISED OF 96 DWELLING UNITS WHICH WERE IN VARIOUS STAGES OF COMPLETION WHEN YOU WERE ORDERED TO SUSPEND WORK ON 18 OF THEM. SUBSEQUENTLY, 78 UNITS WERE COMPLETED FOR WHICH YOU RECEIVED THE FULL FIXED OVERHEAD AND FIXED FEE AND, FOR THE AVERAGE OF 35 PERCENT COMPLETION OF THE 18 UNITS, AN EQUIVALENT OF 6.295 FINISHED UNITS WAS ADDED FOR WHICH YOU WERE PAID THE PROPORTIONATE FIXED OVERHEAD AND FIXED FEE. IT IS YOUR CONTENTION THAT YOU SHOULD BE PAID THE FULL FIXED OVERHEAD AND FIXED FEE ON THE 18 SUSPENDED UNITS.

IN ADDITION TO ARTICLES 2 AND 3 OF THE CONTRACT AND SECTION 13 OF THE GENERAL CONDITIONS OF THE CONTRACT, THE DETERMINATION OF THE HEAD OF THE DEPARTMENT WITH REGARD TO THIS CLAIM WAS BASED ON THE PROVISIONS OF SECTION 10 (E) OF THE GENERAL CONDITIONS WHICH PROVIDES THAT PAYMENTS OF FIXED OVERHEAD AND FIXED FEE SHALL BE BASED UPON AND BE IN PROPORTION TO THE PERCENTAGE OF PHYSICAL COMPLETION OF THE WORK, AND SECTION 27 OF THE GENERAL CONDITIONS WHICH PROVIDES, IN THE EVENT OF TERMINATION, FOR REIMBURSING THE CONTRACTOR FOR EXPENDITURES PROPERLY MADE AND ADJUSTMENT OF THE FIXED FEE.

YOUR ATTENTION IS DIRECTED TO A RECENT CASE--- REISS AND WEINSIER, INC. V. THE UNITED STATES, 126 C.CLS. 713, WHICH INVOLVED, AMONG OTHER THINGS, A CLAIM SIMILAR TO THIS ONE AND WHICH ALSO AROSE OUT OF A CONTRACT WITH THE FEDERAL HOUSING AUTHORITY CONTAINING PROVISIONS IDENTICAL TO THOSE HERE INVOLVED. IN THAT CASE, AS HERE, A NUMBER OF HOUSING UNITS WERE SUSPENDED AND THE CONTRACTOR WAS PAID ITS FIXED OVERHEAD AND FIXED FEE IN PROPORTION TO THE PERCENTAGE OF WORK COMPLETED. THE COURT HELD THAT THE CONTRACOTR HAD BEEN PAID ALL IT WAS DUE UNDER THE TERMS OF THE CONTRACT AND REJECTED THE CLAIM. ACCORDINGLY, IT APPEARS THAT THE ACTION OF THE HEAD OF THE DEPARTMENT IN DENYING AN INCREASE IN OVERHEAD AND FIXED FEE ON THE TERMINATED UNITS IN THIS CASE WAS CORRECT AND PROPER.

3.

CLAIM FOR TRUCK RENTAL

THIS CLAIM, IN THE AMOUNT OF $477.68, REPRESENTS THE DIFFERENCE BETWEEN OFFICE OF PRICE ADMINISTRATION RATES AND THE RATES THAT WERE ACTUALLY PAID BY YOU FOR TRUCK RENTAL. ALTHOUGH, AS YOU CONTEND, A TELEGRAM DATED JULY 2, 1946, WAS SENT TO THE CONTRACTING OFFICER BY THE ASSISTANT COMMISSIONER FOR DEVELOPMENT AND REUTILIZATION WHICH AUTHORIZED RENTAL RATES IN EXCESS OF THOSE ESTABLISHED BY OPA, IT IS REPORTED THAT THE CONTRACTING OFFICER'S APPROVAL OF THE INCREASED RATES, AS SPECIFICALLY REQUIRED BY SECTION 6 (B) (12) OF THE GENERAL CONDITIONS, WAS NEVER GIVEN. THEREFORE, AND SINCE SECTION 6 (G) OF THE GENERAL CONDITIONS PROHIBITS THE PAYMENT OF RENTAL RATES ON EQUIPMENT IN EXCESS OF RATES ESTABLISHED BY FEDERAL LAWS AND REGULATIONS, THERE APPEARS NO LEGAL BASIS FOR THE PAYMENT OF ANY AMOUNT IN EXCESS OF THE THEN PREVAILING OPA TRUCK RENTAL RATES.

TRAVEL EXPENSE SUSPENSION

THIS CLAIM, IN THE AMOUNT OF $821.55, COVERS 14 ITEMS OF TRAVEL EXPENSE INCURRED BY YOUR SUPERINTENDENT FOR TRAVEL BETWEEN HIS STATION AND THE REGIONAL OFFICE OF THE FEDERAL PUBLIC HOUSING AUTHORITY AT CLEVELAND, OHIO, AND ALSO FOR CONFERENCES WITH THE PROJECT ENGINEERS.

SECTION 6 (B) (6) OF THE GENERAL CONDITIONS AND THE LETTER OF CLARIFICATION DATED MAY 23, 1946, TO YOU, PROVIDE FOR REIMBURSEMENT TO THE CONTRACTOR FOR TRAVEL EXPENSES INCURRED IN ACCORDANCE WITH THE STANDARDIZED GOVERNMENT TRAVEL REGULATIONS "FOR ATTENDANCE (WHEN DIRECTED BY THE CONTRACTING OFFICER) AT CONFERENCES AND MEETINGS DEVOTED TO THE PLANNING OR PROSECUTION OF THE CONTRACT" AND THAT TRAVEL OF CERTAIN OF THE CONTRACTOR'S EMPLOYEES MUST BE APPROVED BY THE CONTRACTING OFFICER. SINCE THE RECORD DISCLOSES THAT THE TRAVEL INVOLVED WAS NEITHER DIRECTED NOR APPROVED BY THE CONTRACTING OFFICER, BUT RATHER WAS ADMINISTRATIVELY REJECTED "ON THE GROUNDS THAT THE TRAVEL WAS UNESSENTIAL IN THE INTEREST OF THE GOVERNMENT," THERE CLEARLY IS NO LEGAL OR OTHER OBLIGATION ON THE GOVERNMENT TO PAY THE AMOUNT OF TRAVEL EXPENSE CLAIMED.

5.

INCREASE IN FOREMEN'S WAGE RATES

THIS CLAIM, IN THE AMOUNT OF $725.82, REPRESENTS INCREASES IN THE WAGE RATES OF GENERAL FOREMAN FROM $85 PER WEEK TO $95 PER WEEK WHICH YOU ALLEGE WERE PAID WITH THE APPROVAL OF THE PROJECT ENGINEER. THE ADMINISTRATIVE OFFICE TAKES EXCEPTION TO THIS CONTENTION AND STATES THAT THE RECORDS REVEAL THAT THE PROJECT ENGINEER'S ACTION WAS LIMITED TO "APPROVAL RECOMMENDED" SINCE HE DID NOT HAVE THE AUTHORITY TO APPROVE FOREMEN'S WEEKLY RATES IN EXCESS OF $85. FURTHERMORE, SECTION 18 OF THE GENERAL CONDITIONS REQUIRED THE PRIOR APPROVAL OF THE CONTRACTING OFFICER OF EMPLOYMENT AND COMPENSATION OF GENERAL FOREMEN. WHILE APPROVAL WAS OBTAINED OF THE $85 RATE, THERE IS NO EVIDENCE OF RECORD THAT THE REQUIRED APPROVAL WAS OBTAINED FOR PAYMENT OF THE INCREASED RATE, A CONDITION PRECEDENT TO REIMBURSEMENT AT SUCH RATE. IT FOLLOWS, THEREFORE, THAT THERE IS NO LEGAL OR OTHER BASIS FOR PAYMENT OF THIS CLAIM.

6.

SALARY FOR DEAN COFFEY, $1,010.88

IT IS REPORTED BY THE ADMINISTRATIVE OFFICE THAT MR. COFFEY WAS ORIGINALLY EMPLOYED IN A REIMBURSABLE CAPACITY. AS THE SEVERAL PROJECTS NEARED COMPLETION, HOWEVER, YOUR SUPERVISORY FORCES WHICH WERE COMPENSATED FROM THE FIXED OVERHEAD WERE REDUCED AND MR. COFFEY ASSUMED AND PREDOMINANTLY PERFORMED DUTIES OF A NON-REIMBURSABLE CHARACTER. HIS SALARY DURING THIS LATTER PERIOD WAS SUSPENDED AND THIS CLAIM IS FOR THAT PERIOD. IT IS REPORTED FURTHER THAT, SUBSEQUENT TO THE SUSPENSION OF THE SALARY INVOLVED, YOU EXECUTED RELEASES COVERING THE PARTICULAR PROJECTS ON WHICH MR. COFFEY WAS ENGAGED AND YOU FAILED TO NOTE AS AN EXCEPTION TO ANY OF THE RELEASES THE AMOUNT OF THE SALARY NOW IN DISPUTE. ASIDE FROM THE DOUBTFUL VALIDITY OF THIS ITEM OF THE CLAIM WHEN CONSIDERED ON ITS MERITS, IT HAS BEEN HELD MANY TIMES BY THE COURTS AND THE ACCOUNTING OFFICERS OF THE GOVERNMENT THAT THE EXECUTION OF A RELEASE PRECLUDES A CONTRACTOR FROM THEREAFTER PRESENTING ANY CLAIM ARISING OUT OF THE TRANSACTION INVOLVED, EXCEPT SUCH CLAIMS AS MAY HAVE BEEN SPECIFICALLY EXCEPTED BY THE TERMS OF THE RELEASE. SEE UNITED STATES V. WM. CRAMP AND SONS SHIP AND ENGINE BUILDING COMPANY, 206 U.S. 118; C. R. WILSON BODY COMPANY V. UNITED STATES, 59 C.CLS. 611; BE IN V. UNITED STATES, 101 C.CLS. 144; 23 COMP. GEN. 632; 25 ID. 893.

7.

PETTY CASH ITEMS, $669.97

THIS CLAIM REPRESENTS PETTY CASH EXPENDITURES REIMBURSEMENT FOR WHICH WAS DENIED BECAUSE OF IRREGULAR RECEIPTS SUBMITTED IN CONNECTION WITH THE OPERATION OF TRUCKS IN THE PERFORMANCE OF THE CONTRACT. THE CLAIM WAS THE SUBJECT OF A FINDING OF THE AUTHORIZED REPRESENTATIVE OF THE HEAD OF THE DEPARTMENT DATED FEBRUARY 2, 1949. IT IS REPORTED THAT, IN THE ADMINISTRATIVE AUDIT OF THE VOUCHER COVERING THE EXPENSES INVOLVED, IT WAS DETERMINED THAT, OF 1,008 RECEIPTS, 119 WERE CARBON COPIES WHICH, UPON FURTHER EXAMINATION, INDICATED THAT 30 OF THESE COPIES WERE DUPLICATES OF ORIGINAL RECEIPTS ALSO SUBMITTED FOR REIMBURSEMENT. THE 30 COPIES WERE IN MOST CASES IDENTICAL TO THE ORIGINALS EXCEPT FOR THE ALTERATION OF DATES AND THEY WERE THEREFORE SUSPENDED FROM THE VOUCHER FOR PAYMENT. SUBSEQUENTLY, IT WAS DETERMINED TO WITHHOLD APPROVAL OF THE REMAINING 89 ITEMS RECEIPTED FOR PENDING A REVIEW TO ASCERTAIN WHETHER ANY OF THE REMAINING ITEMS HAD LIKEWISE BEEN PREVIOUSLY APPROVED. IT IS FURTHER REPORTED THAT, WHILE YOU AGREED THAT THE QUESTIONED ITEMS WERE INVALID REQUESTS FOR REIMBURSEMENT, AND INDICATED THAT SUCH REQUESTS WOULD BE WITHDRAWN, YOU LATER SUBMITTED A RECLAIM VOUCHER COVERING THE ENTIRE 119 ITEMS. SINCE, HOWEVER, YOU FAILED TO SUBMIT ANY EVIDENCE TO SUBSTANTIATE YOUR CLAIM FOR THESE QUESTIONABLE ITEMS, THE CONTRACTING OFFICER AND THE HEAD OF THE DEPARTMENT, PURSUANT TO SECTION 38 OF THE GENERAL CONDITIONS OF THE CONTRACT, DENIED THE CLAIM. ON THE BASIS OF THE FACTS THUS APPEARING, THIS OFFICE HAS NO ALTERNATIVE BUT TO CONCUR IN THE DETERMINATION OF THE ADMINISTRATIVE OFFICIALS CONCERNED.

8.

TRAVEL BY MR. H. A. SYLVESTER, $885.50

THE SUBJECT CLAIM, REPRESENTING TRAVEL EXPENSES INCURRED BY MR. SYLVESTER, YOUR TRAVELING SUPERINTENDENT, AROSE OUT OF A DISALLOWANCE BY THE PUBLIC HOUSING ADMINISTRATION BECAUSE "TRAVEL BETWEEN CHARLESTON, INSTITUTE AND HUNTINGTON COULD HAVE BEEN PERFORMED BETWEEN THE HOURS OF 8:00 A.M. AND 6:00 P.M. * * *" AND "DUE TO THE MAJOR PORTION OF TRAVELER'S TIME BEING SPENT IN HUNTINGTON, W.VA., THIS SHOULD HAVE BEEN MADE HIS TEMPORARY DUTY STATION AT WHICH NO PER DIEM WOULD BE PAYABLE * * *.'

PARAGRAPHS 6 (B) (6) AND 6 (B) (7) OF THE GENERAL CONDITIONS OF THE CONTRACT PROVIDE THAT REIMBURSEMENT FOR CERTAIN EXPENDITURES FOR TRAVEL AND PER DIEM WILL BE IN CONFORMITY WITH THE THEN EFFECTIVE STANDARDIZED GOVERNMENT TRAVEL REGULATIONS. PARAGRAPH 51 OF SUCH REGULATIONS PROVIDES, IN PERTINENT PART, THAT "NO PER DIEM WILL BE ALLOWED WHEN THE DEPARTURE IS AFTER 8:00 A.M., AND THE RETURN ON THE SAME DAY IS PRIOR TO 6:00 P.M. * * *" UPON APPEAL, THE HEAD OF THE DEPARTMENT HAS FOUND THAT, SINCE THE DISTANCE FROM HUNTINGTON TO CHARLESTON IS ONLY 50 MILES, MR. SYLVESTER COULD HAVE LEFT CHARLESTON-- WHICH YOU ASSERT WAS HIS APPROVED HEADQUARTERS--- AFTER 8:00 A.M., TRAVELED TO INSTITUTE AND/OR HUNTINGTON, PERFORMED HIS REQUIRED DUTIES AND RETURNED TO CHARLESTON ON THE SAME DAY PRIOR TO 6:00 P.M. OBVIOUSLY, HAD THE TRAVEL BEEN PERFORMED IN THIS MANNER, NO PER DIEM WOULD HAVE BEEN ALLOWABLE UNDER PARAGRAPH 51 OF THE STANDARDIZED GOVERNMENT TRAVEL REGULATIONS. FURTHERMORE, AS POINTED OUT BY THE HEAD OF THE DEPARTMENT, YOU WERE REQUIRED BY THE CONTRACT TO ACCOMPLISH THE WORK COVERED BY THE CONTRACT IN THE MOST ECONOMICAL MANNER. THIS YOU APPARENTLY FAILED TO DO INSOFAR AS THE SUBJECT EXPENSES ARE CONCERNED.

IN ADDITION TO THE FOREGOING, WHICH, OF ITSELF, WOULD APPEAR TO CONSTITUTE SUFFICIENT REASON TO DISALLOW THIS CLAIM, THE RECORD INDICATES THAT YOU DID NOT CONSIDER MR. SYLVESTER'S TRAVEL VOUCHERS TO BE PROPER AND THAT YOU REFUSED TO PAY THEM UNTIL ORDERED TO DO SO BY THE PROJECT ENGINEER. HOWEVER, AS STATED BY THE HEAD OF THE DEPARTMENT IN HIS FINDING OF FEBRUARY 3, 1949, THE PROJECT ENGINEER WAS NOT AUTHORIZED TO ORDER YOU TO MAKE SPECIFIC PAYMENTS. ACCORDINGLY, THERE APPEARS NO LEGAL BASIS FOR THE PAYMENT OF THE TRAVEL EXPENSES OF MR. SYLVESTER, IT BEING WELL SETTLED THAT THE GOVERNMENT CANNOT BE LEGALLY OBLIGATED BY THE UNAUTHORIZED ACTS OF ITS AGENTS.