B-140774, JUL. 29, 1960

B-140774: Jul 29, 1960

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INTERNATIONAL COOPERATION ADMINISTRATION: REFERENCE IS MADE TO OUR LETTER OF FEBRUARY 18. WHICH THE CONTRACTOR HAS CONTENDED ARE REIMBURSABLE UNDER THE CONTRACTS. IT IS STATED THAT YOU WOULD NOT OBJECT TO THE CANCELLATION OF THE DISALLOWANCE OF ITEMS 4 AND 5. NO PROVISION WAS MADE IN THE CONTRACT FOR DEDUCTIONS FROM THAT AMOUNT ON ACCOUNT OF THE ABSENCE OF AN EMPLOYEE. THAT THE WORD "APPROXIMATELY" INDICATES THAT THE PARTIES TO THE CONTRACT INTENDED TO PERMIT SOME LEEWAY IN THE TIME THE PERSONNEL WERE REQUIRED TO BE ON DUTY. WE BELIEVE THE DISALLOWANCE OF THIS ITEM WAS IMPROPER. POINTS OUT THAT IT IS ITS PRACTICE TO PAY INSURANCE ON THE PERSONAL EFFECTS OF ITS EMPLOYEES AS A PART OF THE COST OF TRANSPORTATION.

B-140774, JUL. 29, 1960

TO DIRECTOR, INTERNATIONAL COOPERATION ADMINISTRATION:

REFERENCE IS MADE TO OUR LETTER OF FEBRUARY 18, AND YOUR RESPONSE OF APRIL 18, 1960, CONCERNING CERTAIN REFUNDS CLAIMED BY YOUR AGENCY IN THE SUM OF $37,607.69 ON ACCOUNT OF SIX ITEMS DISALLOWED UNDER TWO CONTRACTS, PROJECTS NOS. 959 AND 995, BETWEEN PAUL WEIR COMPANY, INC., CHICAGO, ILLINOIS, AND EREGLI KOMURLERI ISLETMESI (EKI), A CORPORATE ENTITY OF THE GOVERNMENT OF TURKEY, WHICH THE CONTRACTOR HAS CONTENDED ARE REIMBURSABLE UNDER THE CONTRACTS.

THE ITEMS IN QUESTION RELATE TO (1) SALARIES, OVERHEAD AND PROFIT FOR FAILURE TO REPLACE JOHN S. LAMBERT FOR A PERIOD OF 46 DAYS AND LOSS OF SALARY VALUE OF JOHN S. GOOD OVERSTAYING VACATION PERIOD FOR 10 DAYS, (2) MARINE INSURANCE ON PERSONAL EFFECTS OF EMPLOYEES TRANSPORTED TO TURKEY, (3) TRAVEL COSTS OF DEPENDENTS OF EMPLOYEES, (4) TRAVEL EXPENSES OF MR. AND MRS. NOYCE, (5) EXPENDITURE FOR TRAINING AIDS, AND (6) PREMIUM COSTS FOR VARIOUS TYPES OF INSURANCE.

AFTER A CAREFUL REVIEW OF THE PROVISIONS OF THE INSTANT CONTRACTS AND THE AMENDMENTS THEREUNDER, IN THE LIGHT OF THE ENTIRE RECORD AND PARTICULARLY THE ADDITIONAL INFORMATION AND EVIDENCE WHICH HAS BEEN FURNISHED BY THE CONTRACTOR, IT SEEMS EXTREMELY DOUBTFUL THAT THE DISALLOWANCES MAY BE SUSTAINED.

IN THE LETTER OF APRIL 18, 1960, FROM YOUR ADMINISTRATION, IT IS STATED THAT YOU WOULD NOT OBJECT TO THE CANCELLATION OF THE DISALLOWANCE OF ITEMS 4 AND 5, WITH WHICH WE AGREE, AND THE CONTRACTOR HAS WITHDRAWN ITS OBJECTIONS TO THE DISALLOWANCE OF ITEM 3, AND TO THE DISALLOWANCE OF INSURANCE COSTS FOR MONEY AND SECURITIES, BURGLARY, FOREIGN FIRE AND FOREIGN AUTO UNDER ITEM 6.

REGARDING ITEM 1, ARTICLE 3A OF THE CONTRACT PROVIDED THAT WEIRCO SHALL FURNISH A TEAM OF SIX ENGINEERS AND AN OFFICE MANAGER FOR APPROXIMATELY TWO YEARS. ARTICLE 5 OF THE CONTRACT PROVIDED FOR THE PAYMENT OF A LUMP- SUM AMOUNT OF $385,000, FOR THE SERVICES OF THESE EMPLOYEES. NO PROVISION WAS MADE IN THE CONTRACT FOR DEDUCTIONS FROM THAT AMOUNT ON ACCOUNT OF THE ABSENCE OF AN EMPLOYEE. WE AGREE, AS CONTENDED BY THE CONTRACTOR IN ITS LETTER OF SEPTEMBER 12, 1959, THAT THE WORD "APPROXIMATELY" INDICATES THAT THE PARTIES TO THE CONTRACT INTENDED TO PERMIT SOME LEEWAY IN THE TIME THE PERSONNEL WERE REQUIRED TO BE ON DUTY. FURTHERMORE, THE RECORD INDICATES THAT THE CONTRACTOR PERFORMED THE WORK SATISFACTORILY. ACCORDINGLY, WE BELIEVE THE DISALLOWANCE OF THIS ITEM WAS IMPROPER.

REGARDING ITEM 2 COVERING MARINE INSURANCE ON PERSONAL EFFECTS OF EMPLOYEES TRANSPORTED TO TURKEY, THE CONTRACTOR IN ITS LETTER OF SEPTEMBER 12, 1959, TO OUR OFFICE, POINTS OUT THAT IT IS ITS PRACTICE TO PAY INSURANCE ON THE PERSONAL EFFECTS OF ITS EMPLOYEES AS A PART OF THE COST OF TRANSPORTATION. IN VIEW THEREOF, WE BELIEVE THAT THE ITEM IS PROPER FOR ALLOWANCE.

ON THIS BASIS THE TOTAL DISALLOWANCES WOULD BE REDUCED TO $4,237.11 AND WE ARE OF THE OPINION THAT THIS WOULD REPRESENT A REASONABLE ADJUSTMENT UNDER THE CIRCUMSTANCES OF THIS CASE.

THE CONTRACTOR HAS BEEN ADVISED OF THIS REFERENCE, COPY OF LETTER ENCLOSED, WITH THE UNDERSTANDING THAT THE NECESSARY ACTION WILL BE TAKEN BY YOUR AGENCY IN THE SETTLEMENT OF THE CONTRACTS.