B-159655, JULY 21, 1966, 46 COMP. GEN. 73

B-159655: Jul 21, 1966

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THE PERFORMING AGENCY IS TO BE PAID ITS TOTAL ACTUAL COSTS IN CARRYING OUT THE WORK. THE CORREGIDOR-BATAAN MEMORIAL COMMISSION WAS CREATED BY THE ACT OF AUGUST 5. WAS FURTHER AMENDED BY SECTION 1 OF THE ACT OF DECEMBER 23. 000 WAS APPROPRIATED TO THE VETERANS ADMINISTRATION FOR PLANNING A MEMORIAL (PUBLIC LAW 88-356. 000 WAS APPROPRIATED TO THE VETERANS ADMINISTRATION FOR"PLANNING AND CONSTRUCTING A MEMORIAL ON CORREGIDOR ISLAND" (PUBLIC LAW 89-52. THE CONFEREES ARE IN AGREEMENT THAT THE AMOUNT APPROPRIATED HEREIN IS THE ABSOLUTE MAXIMUM THAT WILL BE MADE AVAILABLE FOR THIS PURPOSE. IN THE EVENT THAT IT IS LATER FOUND THAT THIS AMOUNT IS NOT SUFFICIENT TO FINANCE THE STRUCTURE AS PRESENTLY PLANNED.

B-159655, JULY 21, 1966, 46 COMP. GEN. 73

CORREGIDOR-BATAAN MEMORIAL COMMISSION - MEMORIAL CONSTRUCTION BY VETERANS ADMINISTRATION - USE OF SECTION 601 AUTHORITY. THE VETERANS ADMINISTRATION RESPONSIBLE FOR THE CONSTRUCTION OF THE CORREGIDOR-BATAAN MEMORIAL AUTHORIZED BY 36 U.S.C. 426 MAY ENTER INTO AN AGREEMENT WITH THE DEPARTMENT OF THE NAVY, PURSUANT TO SECTION 601 OF THE ECONOMY ACT (31 U.S.C. 686/A) (, FOR THE CONSTRUCTION OF THE MEMORIAL WITHIN THE LIMIT OF AVAILABLE FUNDS AND SUBJECT TO APPROVAL OF THE FINAL PLANS FOR THE MEMORIAL BY THE BUREAU OF THE BUDGET, AND IN ACCORDANCE WITH SECTION 601, AUTHORIZING SERVICES BETWEEN AGENCIES, THE PERFORMING AGENCY IS TO BE PAID ITS TOTAL ACTUAL COSTS IN CARRYING OUT THE WORK, EITHER IN ADVANCE OR BY REIMBURSEMENT, THE REQUISITIONING AGENCY TO REMAIN ACCOUNTABLE TO CONGRESS FOR ACTIVITIES UNDER THE APPROPRIATIONS RECEIVED.

TO THE ADMINISTRATOR, VETERANS ADMINISTRATION, JULY 21, 1966:

BY LETTER OF JULY 8, 1966, THE DEPUTY ADMINISTRATOR, VETERANS ADMINISTRATION, INQUIRES WHETHER, IN LIGHT OF THE FACTS AND CIRCUMSTANCES HEREINAFTER SET FORTH, WE WOULD OBJECT TO THE VETERANS ADMINISTRATION OBTAINING THE SERVICES OF THE DEPARTMENT OF THE NAVY TO EXECUTE A CONTRACT FOR CONSTRUCTION OF THE CORREGIDOR-BATAAN MEMORIAL AND TO SUPERINTEND THE CONSTRUCTION OF SUCH MEMORIAL. THE NAVY WOULD ALSO REVIEW THE DRAWINGS AND SPECIFICATIONS FOR THE MEMORIAL AND ASSIST IN MAKING APPROPRIATE MODIFICATIONS OF THE SPECIFICATIONS SO AS TO ENABLE COMPLETION OF THE MEMORIAL WITHIN THE FUNDS AVAILABLE FOR CONSTRUCTION.

THE CORREGIDOR-BATAAN MEMORIAL COMMISSION WAS CREATED BY THE ACT OF AUGUST 5, 1953, 67 STAT. 366, 36 U.S.C. 426. THIS ACT, AS AMENDED, WAS FURTHER AMENDED BY SECTION 1 OF THE ACT OF DECEMBER 23, 1963, PUBLIC LAW 88-240, 77 STAT. 477, 36 U.S.C. 426/I) TO AUTHORIZE, AMONG OTHER THINGS, CONSTRUCTION OF A MEMORIAL ON CORREGIDOR, AND ALSO AUTHORIZED THE APPROPRIATION OF NOT TO EXCEED $1,500,000 TO THE VETERANS ADMINISTRATION TO CARRY OUT THE PURPOSES OF SUCH SECTION.

SUBSEQUENTLY $100,000 WAS APPROPRIATED TO THE VETERANS ADMINISTRATION FOR PLANNING A MEMORIAL (PUBLIC LAW 88-356, 78 STAT. 290) AND LATER $1,400,000 WAS APPROPRIATED TO THE VETERANS ADMINISTRATION FOR"PLANNING AND CONSTRUCTING A MEMORIAL ON CORREGIDOR ISLAND" (PUBLIC LAW 89-52, 79 STAT. 191). WE NOTE THAT THE STATEMENT OF THE MANAGERS ON THE PART OF THE HOUSE ACCOMPANYING THE CONFERENCE REPORT (H.R. NO. 513, 89TH CONG.) ON PUBLIC LAW 89-52, CONTAINS THE FOLLOWING LANGUAGE:

AMENDMENT NO. 51: APPROPRIATES $1,400,000 FOR CONSTRUCTION OF THE CORREGIDOR-BATAAN MEMORIAL AS PROPOSED BY THE SENATE. THE CONFEREES ARE IN AGREEMENT THAT THE AMOUNT APPROPRIATED HEREIN IS THE ABSOLUTE MAXIMUM THAT WILL BE MADE AVAILABLE FOR THIS PURPOSE. IN THE EVENT THAT IT IS LATER FOUND THAT THIS AMOUNT IS NOT SUFFICIENT TO FINANCE THE STRUCTURE AS PRESENTLY PLANNED, THE PLANS AND SPECIFICATIONS SHALL BE REVISED ACCORDINGLY. THE CONFEREES FURTHER AGREE THAT FINAL PLANS FOR THIS STRUCTURE SHALL BE SUBMITTED TO THE BUREAU OF THE BUDGET FOR APPROVAL BY THAT AGENCY TO MAKE CERTAIN THAT PROPOSED CONSTRUCTION CAN BE ACCOMPLISHED WITHIN FUNDS MADE AVAILABLE BY THIS APPROPRIATION BEFORE ANY CONTRACT IS LET FOR SUCH CONSTRUCTION.

BY VIRTUE OF AUTHORITY GRANTED BY THE ABOVE-MENTIONED STATUTES, THE VETERANS ADMINISTRATION EMPLOYED THE SERVICES OF AN ARCHITECT- ENGINEER FOR THE PURPOSE OF DESIGNING A MEMORIAL. THE WORKING DRAWINGS AND SPECIFICATIONS WERE PREPARED AND INVITATIONS TO BID FOR THE PERFORMANCE OF THIS WORK WERE ISSUED ON MARCH 29, 1966. THE GOVERNMENT ESTIMATE FOR THE CONSTRUCTION WORK IN THE BASE BID WAS $985,790. THIS WAS SUPPLEMENTED BY ALTERNATES TO BRING THE ESTIMATE UP TO THE CONSTRUCTION TARGET OF $1,200,000. THIS METHOD WAS USED IN AN ATTEMPT TO INSURE THAT A CONSTRUCTION CONTRACT WOULD BE AWARDED WITHIN THE AVAILABLE FUNDS. TWO BIDS WERE RECEIVED, ONE IN THE AMOUNT OF $1,270,000 AND THE OTHER IN THE AMOUNT OF $2,377,738 FOR THE BASIC WORK, THE COST OF ALTERNATES TO BE ADDED TO THESE AMOUNTS. THESE BIDS WERE REJECTED IN ACCORDANCE WITH FEDERAL PROCUREMENT REGULATIONS.

THE ARCHITECT-ENGINEER IN INVESTIGATING THE REASONS FOR THE HIGH BIDS FOUND THERE WAS UNCERTAINTY ON THE PART OF POTENTIAL BIDDERS BECAUSE OF THE IMPACT OF THE VIET NAM WAR, POSSIBLE SHORTAGE OF SHIPPING SPACE AND DOCK UNLOADING FACILITIES, PILFERAGE, DIFFICULTIES IN PROCESSING OF MATERIALS THROUGH CUSTOMS AND LOGISTICS PROBLEMS ON CORREGIDOR.

THE ARCHITECT-ENGINEER WHO IS CURRENTLY DOING WORK FOR THE NAVY IN MANILA SUGGESTED THAT THE VETERANS ADMINISTRATION EXPLORE THE POSSIBILITY OF GETTING ASSISTANCE FROM THE NAVY. THIS HAS BEEN INVESTIGATED AND THE DEPARTMENT OF THE NAVY HAS OFFERED ITS SERVICES TO THE MEMORIAL COMMISSION AND THE VETERANS ADMINISTRATION TO THE EXTENT INDICATED ABOVE.

THE NAVY HANDLES ALL CONSTRUCTION IN THE PHILIPPINES FOR THE ARMY, NAVY AND AIR FORCE. OTHER AGENCIES HAVE UTILIZED THE NAVY TO HANDLE CONSTRUCTION PROJECTS. THESE INCLUDE THE COAST GUARD, STATE DEPARTMENT, DEFENSE COMMUNICATION AGENCY AND THE JOINT UNITED STATES MILITARY ADVISORY GROUP.

THE DEPUTY ADMINISTRATOR STATES THAT IT APPEARS ADVISABLE THAT THE SERVICES OF THE NAVY BE UTILIZED IN THIS MATTER BECAUSE THE NAVY HAS A LARGE CONSTRUCTION ORGANIZATION IN MANILA. HE ADVISES THAT IN TAKING BIDS AND NEGOTIATING WITH BIDDERS THE NAVY IS ABLE TO ARRIVE AT A COST THAT MINIMIZES INTANGIBLE ITEMS OF DELAY SUCH AS PRIORITIES, PILFERAGE, SHIPPING AND DOCKING FACILITIES; AND THAT THE NAVY IS EXPERIENCED AND KNOWLEDGEABLE ABOUT LOCAL CONDITIONS, CONTRACTORS AND COSTS AND KNOWS AT WHAT POINT COSTS CAN BE CONSIDERED REASONABLE IN RELATION TO THE MARKET. IN CONTRAST THE VETERANS ADMINISTRATION HAS NO CONSTRUCTION FORCE IN THE PHILIPPINES.

THE VETERANS ADMINISTRATION RECOGNIZES THAT IT HAS A RESPONSIBILITY UNDER THE CITED LEGISLATION. TO FULFILL THIS COMMITMENT AND SINCE IT WAS INVOLVED IN THE ORIGINAL DESIGN IT WILL REVIEW THE REVISED WORKING DRAWINGS IN CONJUNCTION WITH THE COMMISSION TO INSURE THAT THE REDUCED SCOPE HAS NOT IMPAIRED THE BASIC CONCEPT OF THE ORIGINAL DESIGN. IT WILL CONTINUE TO PROVIDE TECHNICAL AND ADMINISTRATIVE ADVICE TO THE COMMISSION AS NECESSARY, INCLUDING REVIEW OF CHANGES DURING CONSTRUCTION WHICH HAVE A BEARING ON FUNCTION OR APPEARANCE. THE USUAL CHANGES CAUSED BY JOB SITE CONDITIONS WOULD BE HANDLED BY THE NAVY. THE VETERANS ADMINISTRATION WOULD RETAIN THE RESPONSIBILITY FOR THE FINAL RESULT.

THE VETERANS ADMINISTRATION DESIRES TO ACCEPT THE OFFER OF THE DEPARTMENT OF THE NAVY IF SUCH A PROCEDURE IS WITHIN ACCEPTABLE LIMITS OF THE WILL OF THE CONGRESS AND WITHIN THE INTENT OF THE LAWS PERTAINING TO THE CREATION OF THE MEMORIAL COMMISSION, THE AUTHORIZATION AND THE APPROPRIATIONS TO THE AGENCY. THE DEPUTY ADMINISTRATOR STATES THAT THE VETERANS ADMINISTRATION WOULD SEEK THE ASSISTANCE OF THE NAVY PURSUANT TO THE AUTHORITY OF SECTION 601 OF THE ECONOMY ACT OF 1932, AS AMENDED, 31 U.S.C. 686.

SECTION 601/A) OF THE ECONOMY ACT OF 1932, AS AMENDED, 31 U.S.C. 686/A), PROVIDES, IN PART, AS FOLLOWS:

(A) ANY EXECUTIVE DEPARTMENT OR INDEPENDENT ESTABLISHMENT OF THE GOVERNMENT, OR ANY BUREAU OR OFFICE THEREOF, IF FUNDS ARE AVAILABLE THEREFOR AND IF IT IS DETERMINED BY THE HEAD OF SUCH EXECUTIVE DEPARTMENT, ESTABLISHMENT, BUREAU, OR OFFICE TO BE IN THE INTEREST OF THE GOVERNMENT SO TO DO, MAY PLACE ORDERS WITH ANY OTHER SUCH DEPARTMENT, ESTABLISHMENT, BUREAU, OR OFFICE FOR MATERIALS, SUPPLIES, EQUIPMENT, WORK, OR SERVICES, OF ANY KIND THAT SUCH REQUISITIONED FEDERAL AGENCY MAY BE IN A POSITION TO SUPPLY OR EQUIPPED TO RENDER, AND SHALL PAY PROMPTLY BY CHECK TO SUCH FEDERAL AGENCY AS MAY BE REQUISITIONED, UPON ITS WRITTEN REQUEST, EITHER IN ADVANCE OR UPON THE FURNISHING OR PERFORMANCE THEREOF, ALL OR PART OF THE ESTIMATED OR ACTUAL COST THEREOF AS DETERMINED BY SUCH DEPARTMENT, ESTABLISHMENT, BUREAU, OR OFFICE AS MAY BE REQUISITIONED; BUT PROPER ADJUSTMENTS ON THE BASIS OF THE ACTUAL COST OF THE MATERIALS, SUPPLIES, OR EQUIPMENT FURNISHED, OR WORK OR SERVICES PERFORMED, PAID FOR IN ADVANCE, SHALL BE MADE AS MAY BE AGREED UPON BY THE DEPARTMENTS, ESTABLISHMENTS, BUREAUS, OR OFFICES CONCERNED: PROVIDED, THAT THE DEPARTMENT OF THE ARMY, NAVY DEPARTMENT, TREASURY DEPARTMENT, FEDERAL AVIATION AGENCY, AND THE MARITIME COMMISSION MAY PLACE ORDERS, AS PROVIDED HEREIN, FOR MATERIALS, SUPPLIES, EQUIPMENT, WORK, OR SERVICES, OF ANY KIND THAT ANY REQUISITIONED FEDERAL AGENCY MAY BE IN A POSITION TO SUPPLY, OR TO RENDER OR TO OBTAIN BY CONTRACT * * *.

UNDER THE ABOVE-QUOTED PROVISION OF LAW ANY EXECUTIVE DEPARTMENT OR INDEPENDENT ESTABLISHMENT OF THE GOVERNMENT MAY OBTAIN FROM ANY OTHER SUCH DEPARTMENT OR ESTABLISHMENT, WORK OR SERVICES THAT THE REQUISITIONED FEDERAL AGENCY MAY BE IN A POSITION TO FURNISH. THE PERFORMING AGENCY IS TO BE PAID EITHER IN ADVANCE OR BY REIMBURSEMENT ITS TOTAL ACTUAL COSTS IN CARRYING OUT THE WORK. THE REQUISITIONING AGENCY REMAINS ACCOUNTABLE TO THE CONGRESS FOR ACTIVITIES UNDER APPROPRIATIONS MADE TO IT. THEREFORE, IF YOU DETERMINE IT TO BE IN THE INTEREST OF THE GOVERNMENT TO DO SO, WE WOULD INTERPOSE NO LEGAL OBJECTION TO THE VETERANS ADMINISTRATION ENTERING INTO AN AGREEMENT WITH THE NAVY PURSUANT TO 31 U.S.C. 686/A) WHEREBY THE NAVY WOULD FURNISH THE VETERANS ADMINISTRATION THE SERVICES SET FORTH ABOVE WITHIN THE LIMIT OF FUNDS AVAILABLE TO YOU, PROVIDED THE FINAL PLANS FOR THE MEMORIAL ARE APPROVED BY THE BUREAU OF THE BUDGET IN ACCORDANCE WITH THE ABOVE-CITED CONFERENCE REPORT. HOWEVER, IN VIEW OF ALL THE FACTS AND CIRCUMSTANCES, WE SUGGEST THAT YOU OBTAIN THE CONCURRENCE OF THE PERTINENT CONGRESSIONAL COMMITTEES TO THE PROPOSED PROCEDURE.