B-150090, NOV. 9, 1965
Highlights
THE INSURANCE COVERAGE CISCO WAS REQUIRED TO OBTAIN UNDER ITS CONTRACT. THE OBLIGATION OF THE FOREST SERVICE TO REPAIR IS NOT DEPENDENT UPON ANY EXHAUSTION OF REMEDIES UNDER THE CISCO CONTRACT. NOR IS THE AIRPORT BOARD SUBROGATED IN ANY WAY UNDER THE HOLD-HARMLESS CLAUSE OF THE CISCO CONTRACT. WE THEREFORE ARE OF THE OPINION THAT THE CLAIM OF THE AIRPORT BOARD SHOULD BE SETTLED AND ADJUSTED ADMINISTRATIVELY UNDER CONTRACT NO. 12-1. WE BELIEVE THAT THE FARWEST GENERAL AGENCY AS THE INSURANCE CARRIER OF CISCO IS LEGALLY RESPONSIBLE UNDER SECTION 16.4 OF CONTRACT NO. 12-11-261-2002.
B-150090, NOV. 9, 1965
TO THE SECRETARY OF AGRICULTURE:
BY LETTER DATED SEPTEMBER 15, 1965, WITH ENCLOSURES, ASSISTANT SECRETARY JOHN A. BAKER REQUESTED OUR DECISION AS TO WHETHER THE COST OF REPAIRING DAMAGE TO THE HELENA (MONTANA) AIRPORT CAUSED BY THE OPERATIONS OF CISCO AIRCRAFT, INC., UNDER CONTRACT NO. 12-11-261-2002 WITH THE FOREST SERVICE MAY BE PAID UNDER THE PROVISIONS OF CONTRACT NO. 12-1 BETWEEN THE FOREST SERVICE AND THE JOINT CITY-COUNTY AIRPORT BOARD FOR THE USE OF THE AIRPORT FACILITIES.
IN OUR DECISION OF DECEMBER 14, 1962, WE CONSIDERED THE QUESTION WHETHER A FINAL PAYMENT VOUCHER SUBMITTED TO MR. H. A. EDD, AUTHORIZED CERTIFYING OFFICER, DRAWN IN FAVOR OF THE DEMING NATIONAL BANK IN THE AMOUNT OF $49,784, AS ASSIGNEE UNDER THE CISCO CONTRACT, COULD BE CERTIFIED FOR PAYMENT IN VIEW OF THE PENDING CLAIM BY THE AIRPORT BOARD FOR AN UNDETERMINED AMOUNT OF DAMAGES CAUSED TO RUNWAYS AND TAXIWAYS BY THE SPILLAGE OF INSECTICIDE BY CISCO AIRCRAFT. IN VIEW OF THE HOLD-HARMLESS CLAUSE IN THE CISCO CONTRACT, THE INSURANCE COVERAGE CISCO WAS REQUIRED TO OBTAIN UNDER ITS CONTRACT, AND THE CONSENT OF CISCO TO THE WITHHOLDING OF $5,000 OF THE FINAL CONTRACT PAYMENT, WE AUTHORIZED CERTIFICATION OF THE VOUCHER IN THE REDUCED AMOUNT OF $44,784.
SECTION 9 (A) OF CONTRACT NO. 12-1 UNQUALIFIEDLY OBLIGATED THE FOREST SERVICE TO REPAIR "DAMAGE TO RUNWAYS, TAXIWAYS OR OTHER FACILITIES OVER AND ABOVE NORMAL WEAR CAUSED BY AIRCRAFT.' THE OBLIGATION OF THE FOREST SERVICE TO REPAIR IS NOT DEPENDENT UPON ANY EXHAUSTION OF REMEDIES UNDER THE CISCO CONTRACT; NOR IS THE AIRPORT BOARD SUBROGATED IN ANY WAY UNDER THE HOLD-HARMLESS CLAUSE OF THE CISCO CONTRACT. WE THEREFORE ARE OF THE OPINION THAT THE CLAIM OF THE AIRPORT BOARD SHOULD BE SETTLED AND ADJUSTED ADMINISTRATIVELY UNDER CONTRACT NO. 12-1. HOWEVER, AS INDICATED IN OUR DECEMBER 14, 1962, DECISION, WE BELIEVE THAT THE FARWEST GENERAL AGENCY AS THE INSURANCE CARRIER OF CISCO IS LEGALLY RESPONSIBLE UNDER SECTION 16.4 OF CONTRACT NO. 12-11-261-2002, ITS CONTRACT OF INSURANCE, AND ITS VERIFICATION OF INSURANCE CERTIFICATE TO REIMBURSE THE GOVERNMENT IN THE AMOUNT OF THE AIRPORT BOARD CLAIM AS FINALLY SETTLED. WE AGREED WITH YOUR PROPOSAL TO ATTEMPT TO RECOVER THE COST OF THE REPAIR TO THE AIRPORT UNDER THE HOLD-HARMLESS CLAUSE OF THE CONTRACT WITH CISCO.