B-124136, SEP. 1, 1955

B-124136: Sep 1, 1955

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WITH THE REQUEST THAT AN ADVANCE DECISION BE RENDERED AS TO WHETHER PAYMENT THEREON IS AUTHORIZED. IS THE SAME AS THAT INVOLVED IN OUR DECISION OF AUGUST 17. WHEREIN THE MATERIAL PROVISIONS OF SAID TREASURY DECISION WERE SET FORTH. THE AMOUNT INVOLVED WAS REIMBURSED TO THE CONTRACTOR ON D.O. SUBSEQUENTLY WAS COLLECTED FROM THE CONTRACTOR AND TAKEN UP ON COLLECTION VOUCHER NO. 447. THE ABOVE ITEMS OF OVERHEAD ARE SIMILAR TO THOSE FOR THE CONTRACTOR'S FISCAL YEAR 1951. WHICH WERE CONSIDERED IN THE DECISION OF AUGUST 17. THE BALANCE OF THE CORPORATE EXPENSE ITEMS ARE NOT REIMBURSABLE BECAUSE THEY REASONABLY MAY NOT BE SAID TO HAVE BORNE ANY RELATION TO THE PERFORMANCE OF THE CONTRACT. ARE NOT REIMBURSABLE FOR THE REASONS STATED IN THE DECISION OF AUGUST 17.

B-124136, SEP. 1, 1955

TO LIEUTENANT COLONEL G. F. WANDRES, USAF, DISBURSING OFFICER, DEPARTMENT OF THE AIR FORCE:

YOUR LETTER OF MARCH 4, 1955, TRANSMITS BUREAU VOUCHER NO. R-667 IN THE AMOUNT OF $2,120.94, STATED IN FAVOR OF DOUGLAS AIRCRAFT COMPANY, INC., COST-PLUS-A-FIXED-FEE CONTRACTOR UNDER CONTRACT NO. W33-038-AC 10413, DATED MAY 30, 1945, WITH THE REQUEST THAT AN ADVANCE DECISION BE RENDERED AS TO WHETHER PAYMENT THEREON IS AUTHORIZED.

THE CONTRACT, WHICH INCORPORATES SECTION 26.9 OF T.D. 5000 AS THE CRITERION FOR DETERMINING ALLOWABLE COSTS THEREUNDER, IS THE SAME AS THAT INVOLVED IN OUR DECISION OF AUGUST 17, 1955, B-124135, TO YOU, WHEREIN THE MATERIAL PROVISIONS OF SAID TREASURY DECISION WERE SET FORTH.

THE AMOUNT OF THE VOUCHER REPRESENTS THE PRO RATA SHARE OF THE ITEMS OF OVERHEAD APPLICABLE TO THE CONTRACTOR'S GENERAL OFFICE AND SANTA MONICA DIVISION FOR THE FISCAL PERIOD DECEMBER 1, 1951, TO NOVEMBER 30, 1952, SET OUT BELOW. THE AMOUNT INVOLVED WAS REIMBURSED TO THE CONTRACTOR ON D.O. VOUCHERS NOS. 425125 AND 424615, RESPECTIVELY, JUNE 1953 ACCOUNTS OF H.A. SOSKIN, FG SYMBOL 215-397, BUT SUBSEQUENTLY WAS COLLECTED FROM THE CONTRACTOR AND TAKEN UP ON COLLECTION VOUCHER NO. 447, AUGUST 1954 ACCOUNTS OF W. L. VIERS, FG SYMBOL 215-236, BECAUSE OF GAO NOTICE OF EXCEPTION NO. 400022 TO THE PAYMENTS.

TABLE ITEM DESCRIPTION AMOUNT

1 CORPORATION EXPENSE $ 541.12

2 DUES AND SUBSCRIPTIONS 114.83

3 INSTITUTIONAL ADVERTISING 643.55

4 AIRPLANE CRASH EXPENSE 219.62

5MISCELLANEOUS EXPENSE:

(A) (B) E.T. STERN, NEW YORK OFFICE 287.73

(C) JAMES HARPER, SALES OBSERVER

AND BROWN AND DUREAU, LTD.,

SALES CONSULTANTS 65.06

(D) EUROPEAN OFFICE SALARIES

AND EXPENSE 249.03

TOTAL $2,120.94

WITH THE EXCEPTION OF ITEM 5/D), THE ABOVE ITEMS OF OVERHEAD ARE SIMILAR TO THOSE FOR THE CONTRACTOR'S FISCAL YEAR 1951, WHICH WERE CONSIDERED IN THE DECISION OF AUGUST 17, 1955, B-124135, TO YOU. FOR THE REASONS INDICATED IN THAT DECISION, A PRO RATA PART OF THE CORPORATE EXPENSE ITEMS COMPRISING STATE FRANCHISE TAXES, FEES PAID TO GEOFFREY MAYO FOR FINANCIAL COUNSEL, DIRECTORS' FEES, FEE PAID TO CORPORATION TRUST COMPANY FOR ANNUAL (STATUTORY) REPRESENTATION SERVICES, AND THE ITEMS DESIGNATED UNDER "MISCELLANEOUS" EXPENSES PROPERLY MAY BE CONSIDERED ALLOWABLE COSTS UNDER THE CONTRACT. HOWEVER, THE BALANCE OF THE CORPORATE EXPENSE ITEMS ARE NOT REIMBURSABLE BECAUSE THEY REASONABLY MAY NOT BE SAID TO HAVE BORNE ANY RELATION TO THE PERFORMANCE OF THE CONTRACT.

THE COST OF DUES AND SUBSCRIPTIONS MAY BE REGARDED AS ALLOWABLE, WITH THE EXCEPTION OF THE AMOUNTS PAID FOR MEMBERSHIP IN THE VARIOUS CHAMBERS OF COMMERCE,"BETTER BUSINESS" BUREAU, NATIONAL INDUSTRIAL CONFERENCE BOARD, NATIONAL ASSOCIATION OF MANUFACTURERS, NATIONAL SECURITY INDUSTRIAL ASSOCIATION, CALIFORNIA MANUFACTURERS, NATIONAL SECURITY INDUSTRIAL ASSOCIATION, CALIFORNIA MANUFACTURERS ASSOCIATION, MERCHANTS AND MANUFACTURERS ASSOCIATION AND THE KIWANIS CLUB. THESE MAY NOT BE CONSIDERED REIMBURSABLE BECAUSE THEY DO NOT FALL WITHIN THE CATEGORY OF REGULAR TRADE ASSOCIATIONS.

ITEMS 3, 4 AND 5/C), INSTITUTIONAL ADVERTISING, AIRPLANE CRASH EXPENSE, AND JAMES HARPER, ETC., ARE NOT REIMBURSABLE FOR THE REASONS STATED IN THE DECISION OF AUGUST 17. THE SAME IS TRUE OF ITEM 5/D), EUROPEAN OFFICE SALARIES AND EXPENSE. THIS REPRESENTS THE COST OF OPERATING THE CONTRACTOR'S EUROPEAN SALES OFFICE AND THE ITEM CANNOT, THEREFORE, BE SAID TO HAVE BEEN INCIDENT TO AND NECESSARY FOR PERFORMANCE OF THE CONTRACT. HOWEVER, ITEM 5 (A) (B) MAY BE CONSIDERED PROPER FOR REIMBURSEMENT UNDER THE CONTRACT FOR REASONS STATED IN THE REFERRED-TO DECISION.

ACCORDINGLY, THE VOUCHER, TOGETHER WITH SUPPORTING PAPERS, IS RETURNED HEREWITH, AND YOU ARE ADVISED THAT PAYMENT THEREON IS AUTHORIZED TO THE EXTENT INDICATED, IF OTHERWISE CORRECT.