B-154061, JUN. 19, 1964

B-154061: Jun 19, 1964

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TO THE SECRETARY OF THE ARMY: REFERENCE IS MADE TO LETTER DATED APRIL 3. IF IT IS DETERMINED THAT SUCH PAYMENTS ARE PAYABLE. THE GOVERNMENT WILL ASSUME THE RESPONSIBILITY THEREFOR. MAKE SUCH PAYMENTS AS ARE SO DETERMINED.'. FINAL PAYMENT WAS MADE ON OCTOBER 26. HELD THAT THE PORT WAS REQUIRED BY THE LAWS OF OREGON TO PAY A ROYALTY. WHICH WAS REMOVED FROM THE BED OF THE COLUMBIA RIVER AND USED MORE THAN ONE-HALF MILE FROM THE RIVER BANK. THE SHARE OF THE JUDGMENT APPORTIONED TO THE UNITED STATES PURSUANT TO THE CONTRACT IS $6. IS THAT THE CONTRACT PROVIDED FOR PAYMENT OF ROYALTIES BUT SINCE THE AMOUNT OF $199. THERE IS NO APPROPRIATION AVAILABLE FOR PAYMENT OF THE ADDITIONAL $6. WE HAVE HELD THAT THE ACT OF APRIL 10.

B-154061, JUN. 19, 1964

TO THE SECRETARY OF THE ARMY:

REFERENCE IS MADE TO LETTER DATED APRIL 3, 1964, FROM THE CHIEF, FIELD SERVICE OFFICE, FINANCE CENTER, UNITED STATES ARMY, INDIANAPOLIS, INDIANA, FORWARDING THE CLAIM OF THE PORT OF PORTLAND (OREGON) IN THE AMOUNT OF $6,226.80 FOR SUBMISSION BY US TO THE CONGRESS UNDER THE PROVISIONS OF THE ACT OF APRIL 10, 1928, 31 U.S.C. 236.

BY CONTRACT DATED JANUARY 28, 1959, THE DEPARTMENT OF THE ARMY NEGOTIATED WITH THE PORT FOR THE PURCHASE OF SUB-BASE FILL MATERIAL FOR USE ON AIR- FORCE P-341 PROJECT, RUNWAY PRIMARY INSTRUMENT, PORTLAND INTERNATIONAL AIRPORT, 1958 PROGRAM. THE CONTRACT INCLUDED THE FOLLOWING PROVISION:

"THE ABOVE PRICE DOES NOT INCLUDE ANY ROYALTY PAYMENTS TO THE STATE OF OREGON OR THE STATE OF WASHINGTON, OR TO ANY AUTHORIZED BOARD OR AGENCY OF EITHER OF SUCH STATES. IF IT IS DETERMINED THAT SUCH PAYMENTS ARE PAYABLE; THE GOVERNMENT WILL ASSUME THE RESPONSIBILITY THEREFOR, AND MAKE SUCH PAYMENTS AS ARE SO DETERMINED.'

THE PORT DELIVERED AND STOCKPILED FOR THE GOVERNMENT UNDER THE CONTRACT 50,542.21 CUBIC YARDS OF MATERIAL, RESULTING IN A CONTRACT PRICE, AT $0.35 PER CUBIC YARD, OF $17,689.77. FINAL PAYMENT WAS MADE ON OCTOBER 26, 1959.

ON JANUARY 3, 1962, THE CIRCUIT COURT OF MULTNOMAH COUNTY (OREGON), IN A DECISION SUBSEQUENTLY AFFIRMED BY THE OREGON SUPREME COURT, HELD THAT THE PORT WAS REQUIRED BY THE LAWS OF OREGON TO PAY A ROYALTY, PLUS INTEREST TO DATE OF SATISFACTION OF JUDGMENT, ON CERTAIN MATERIAL, INCLUDING THE MATERIAL SOLD TO THE UNITED STATES, WHICH WAS REMOVED FROM THE BED OF THE COLUMBIA RIVER AND USED MORE THAN ONE-HALF MILE FROM THE RIVER BANK. THE SHARE OF THE JUDGMENT APPORTIONED TO THE UNITED STATES PURSUANT TO THE CONTRACT IS $6,226.80, REPRESENTING A ROYALTY OF $5,054.22 AT TEN CENTS PER CUBIC YARD ON 50,542.21 CUBIC YARDS, PLUS INTEREST OF $1,172.58 COMPUTED AT THE RATE OF SIX PERCENT PER ANNUM FROM MARCH 9, 1959, TO JANUARY 21, 1963, DATE OF SATISFACTION OF JUDGMENT.

THE BASIS FOR THE RECOMMENDATION THAT THE CLAIM BE SUBMITTED BY OUR OFFICE TO THE CONGRESS UNDER THE ACT OF APRIL 10, 1928, IS THAT THE CONTRACT PROVIDED FOR PAYMENT OF ROYALTIES BUT SINCE THE AMOUNT OF $199,020 HAS ALREADY BEEN EXPENDED FOR MINOR CONSTRUCTION COSTS ON THE PROJECT, THERE IS NO APPROPRIATION AVAILABLE FOR PAYMENT OF THE ADDITIONAL $6,226.80 IN VIEW OF THE $200,000 MAXIMUM COST LIMITATION IN 10 U.S.C. 2674 (B).

WE RECOGNIZE THAT THERE MAY BE NO VALID DEFENSE TO THE CLAIM OF THE PORT. HOWEVER, BY REASON OF THE STATUTORY RESTRICTION, PAYMENT MAY NOT BE MADE FROM THE APPROPRIATION OTHERWISE AVAILABLE FOR THE PROJECT. ALSO, WE HAVE HELD THAT THE ACT OF APRIL 10, 1928, WAS NOT INTENDED AS A MEANS TO REVIVE CLAIMS BARRED BY A STATUTORY OR REGULATORY LIMITATION. 14 COMP. GEN. 324; B-147086, SEPTEMBER 20, 1961.

ACCORDINGLY, WE SEE NO JUSTIFICATION FOR PRESENTING THE CLAIM TO THE CONGRESS FOR CONSIDERATION UNDER THE ACT OF APRIL 10, 1928. HOWEVER, WE ASSUME THAT DETAILS OF THE TRANSACTION WILL BE INCLUDED IN YOUR REPORT TO THE COMMITTEES ON ARMED SERVICES OF THE SENATE AND HOUSE OF REPRESENTATIVES REQUIRED BY 10 U.S.C. 2674 (F).