B-129071, OCT. 10, 1956

B-129071: Oct 10, 1956

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ATOMIC ENERGY COMMISSION: REFERENCE IS MADE TO THE GENERAL MANAGER'S LETTER OF AUGUST 23. THE GENERAL MANAGER'S LETTER STATES THAT AUTHORIZATION FOR SUCH PAYMENTS WAS INADVERTENTLY OMITTED FROM A REVISED CONTRACT SALARY SCHEDULE WHICH WAS MADE EFFECTIVE AUGUST 22. THE OMISSION WAS NOT DISCOVERED UNTIL DECEMBER 21. REIMBURSEMENT FOR SUCH PAYMENTS WAS AUTHORIZED EFFECTIVE THE DATE THE OMISSION WAS DISCOVERED. IT APPEARS THAT "HAZARD PAY" PREMIUMS WERE PAID BY ZIA TO ITS NON MANUAL EMPLOYEES FROM THE INCEPTION OF THE CONTRACT INVOLVED ON APRIL 1. THAT SUCH PAYMENTS HAVE BEEN MADE AND REIMBURSED BY THE COMMISSION CONTINUOUSLY SINCE THAT TIME. A REVIEW OF THE CONTRACTOR'S NON-MANUAL SALARY SCHEDULE WAS UNDERTAKEN.

B-129071, OCT. 10, 1956

TO CHAIRMAN, ATOMIC ENERGY COMMISSION:

REFERENCE IS MADE TO THE GENERAL MANAGER'S LETTER OF AUGUST 23, 1956, REQUESTING A DECISION AS TO THE PROPRIETY OF REIMBURSEMENT TO THE ZIA COMPANY FOR "HAZARD PAY" PREMIUMS PAID TO ITS NON-MANUAL EMPLOYEES DURING THE PERIOD AUGUST 22, 1949, TO DECEMBER 21, 1955.

THE GENERAL MANAGER'S LETTER STATES THAT AUTHORIZATION FOR SUCH PAYMENTS WAS INADVERTENTLY OMITTED FROM A REVISED CONTRACT SALARY SCHEDULE WHICH WAS MADE EFFECTIVE AUGUST 22, 1949, AND THE OMISSION WAS NOT DISCOVERED UNTIL DECEMBER 21, 1955. REIMBURSEMENT FOR SUCH PAYMENTS WAS AUTHORIZED EFFECTIVE THE DATE THE OMISSION WAS DISCOVERED, WITHOUT PREJUDICE TO THE RIGHTS OF EITHER PARTY AS TO AMOUNTS PAID BETWEEN THE DATES REFERRED TO.

IT APPEARS THAT "HAZARD PAY" PREMIUMS WERE PAID BY ZIA TO ITS NON MANUAL EMPLOYEES FROM THE INCEPTION OF THE CONTRACT INVOLVED ON APRIL 1, 1946; AND THAT SUCH PAYMENTS HAVE BEEN MADE AND REIMBURSED BY THE COMMISSION CONTINUOUSLY SINCE THAT TIME. LATE IN 1948, A REVIEW OF THE CONTRACTOR'S NON-MANUAL SALARY SCHEDULE WAS UNDERTAKEN. TWO PLANS WERE CONSIDERED. ONE PLAN, WHICH WAS SIMILAR TO THAT FOLLOWED FOR THE STAFF OF THE LOS ALAMOS SCIENTIFIC LABORATORY, GAVE CONSIDERATION IN THE BASE RATE TO THE RADIOACTIVE AND EXPLOSIVES HAZARDS INVOLVED IN SPECIFIC JOBS. THE OTHER PLAN DID NOT EVALUATE SUCH HAZARDS IN DETERMINING BASE RATES BUT PROVIDED FOR FIXED PERCENTAGE RATES OF PREMIUM PAY FOR HAZARDOUS WORKING CONDITIONS. AFTER THOROUGH CONSIDERATION OF BOTH PLANS IT WAS DECIDED THAT ZIA SHOULD CONTINUE TO USE THE PREMIUM METHOD OF COMPENSATION.

IN ACCORDANCE WITH THIS DECISION ZIA ON AUGUST 11, 1949, SUBMITTED TO THE COMMISSION A REVISED NON-MANUAL SALARY SCHEDULE WHICH INCLUDED AUTHORIZATION FOR PREMIUM "HAZARD PAY" ON THE SAME BASIS THAT IT HAD THERETOFORE USED. A REIMBURSEMENT AUTHORIZATION BASED ON THIS SCHEDULE WAS ISSUED EFFECTIVE AUGUST 22, 1949, BUT THE PARAGRAPH OF THE PLAN AUTHORIZING PREMIUM "HAZARD PAY" WAS OMITTED FROM THE AUTHORIZATION, WHICH OTHERWISE APPEARS TO HAVE BEEN A VERBATIM COPY OF THE SCHEDULE, CONSISTING OF 18 PAGES. THE OMISSION WAS NOT NOTICED BY OFFICIALS OF ZIA OR THE COMMISSION. PREMIUM "HAZARD PAY" CONTINUED TO BE PAID BY ZIA WITH THE FULL KNOWLEDGE OF THE COMMISSION AND REIMBURSEMENT THEREFOR WAS MADE. THE AVAILABLE RECORDS FAIL TO DISCLOSE HOW THE AUTHORIZATION FOR PREMIUM "HAZARD PAY" CAME TO BE OMITTED FROM THE REIMBURSEMENT AUTHORIZATION.

IT IS CLEAR, HOWEVER, FROM STATEMENTS OF THE THEN MANAGER OF THE SANTA FE OPERATIONS OFFICE OF THE VICE PRESIDENT OF ZIA WHO EXECUTED THE REIMBURSEMENT AUTHORIZATION, AND OF THE DIRECTOR OF ORGANIZATION AND PERSONNEL, SANTA FE OPERATIONS OFFICE, WHO EXECUTED THE REIMBURSEMENT AUTHORIZATION ON BEHALF OF THE COMMISSION, THAT THE PARTIES ON BOTH SIDES INTENDED TO APPROVE THE SALARY SCHEDULE PLAN SUBMITTED BY ZIA, WHICH INCLUDED PREMIUM PAY. THE FILE CONTAINS A MEMORANDUM FROM THE LAST-NAMED OFFICIAL TO THE ZIA COMPANY DATED AUGUST 19, 1949, ACKNOWLEDGING RECEIPT OF THE PLAN SUBMITTED BY ZIA ON AUGUST 11, 1949, AND STATING THAT---

"THIS MEMORANDUM WILL SERVE AS APPROVAL OF THE PLAN AND FOR ITS INSTALLATION ON AUGUST 22, 1949, PENDING REIMBURSEMENT AUTHORIZATION.'

AS HEREINABOVE STATED, THE PLAN SUBMITTED BY ZIA DID INCLUDE AUTHORIZATION FOR PREMIUM "HAZARD PAY.'

IN THE LIGHT OF THE EVIDENCE SUBMITTED, IT IS APPARENT THAT BOTH ZIA AND THE COMMISSION INTENDED TO AUTHORIZE REIMBURSEMENT FOR SUCH PREMIUM PAY, AND THAT THE OMISSION OF AUTHORIZATION THEREFOR FROM THE CONTRACT MODIFICATION EFFECTIVE AUGUST 22, 1949, WAS CONTRARY TO THE INTENTION OF BOTH PARTIES. ACCORDINGLY, YOU ARE ADVISED THAT ACTION TO CONFORM THE CONTRACT TO THE ACTUAL INTENTION OF THE PARTIES IS PROPER, AND MAY BE ACCOMPLISHED BY ISSUANCE OF THE PROPOSED REIMBURSEMENT AUTHORIZATION ATTACHED TO THE LETTER OF AUGUST 23, 1956.