B-165531, JAN. 10, 1969

B-165531: Jan 10, 1969

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TO GENERAL HEDLUND: REFERENCE IS MADE TO A LETTER DATED SEPTEMBER 26. WHICH APPEAR TO HAVE TOTALED THE PRINCIPAL SUM OF $6. WE ARE ENCLOSING A COPY OF A LETTER DATED DECEMBER 23. THAT OFFICER WAS NOT DELEGATED THE AUTHORITY TO APPROVE THE PERFORMANCE OF OVERTIME SERVICES AT PREMIUM RATES. THE REPORTED FACTS OF THE CASE INDICATE THAT THE GOVERNMENT MAY HAVE BENEFITED SUBSTANTIALLY BY REASON OF HAVING THE PARTICULAR WORK PERFORMED DURING OVERTIME PERIODS AND WE HAVE NO REASON TO BELIEVE THAT THE CONTRACTING OFFICER WOULD NOT HAVE APPROVED THE PERFORMANCE OF THE WORK AT PREMIUM RATES IF HE HAD BEEN AWARE OF THE APPARENT NECESSITY THEREFOR. IT IS OUR OPINION THAT FURTHER COLLECTION ACTION BY YOUR AGENCY IN THE MATTER IS NOT REQUIRED.

B-165531, JAN. 10, 1969

TO GENERAL HEDLUND:

REFERENCE IS MADE TO A LETTER DATED SEPTEMBER 26, 1968, DSAH-CFF, FROM THE DEFENSE SUPPLY AGENCY CONTRACT FINANCE OFFICER TO THE PIONEER ENGINEERING AND MANUFACTURING COMPANY, WARREN, MICHIGAN, REQUESTING PAYMENT OF THE SUM OF $7,684.56, PLUS INTEREST FROM APRIL 17, 1967, IN CONNECTION WITH AN AUDIT OF THE PAYMENTS MADE TO THE PIONEER ENGINEERING AND MANUFACTURING COMPANY UNDER NAVY CONTRACT NORD 18618 (FBM). THE AUDIT EXCEPTIONS, WHICH APPEAR TO HAVE TOTALED THE PRINCIPAL SUM OF $6,230.14, RELATE TO PAYMENTS MADE BY THE GOVERNMENT AT OVERTIME RATES FOR SERVICES PERFORMED DURING PERIODS THAT THE CONTRACT, AS MODIFIED, DID NOT PROVIDE FOR THE PAYMENT OF PREMIUM RATES FOR OVERTIME SERVICES.

IN CONNECTION WITH A PROTEST SUBMITTED TO OUR OFFICE BY LETTER DATED OCTOBER 24, 1968, FROM THE PIONEER ENGINEERING AND MANUFACTURING COMPANY, WE REQUESTED A REPORT FROM THE DEPARTMENT OF THE NAVY, AND WE ARE ENCLOSING A COPY OF A LETTER DATED DECEMBER 23, 1968, FROM THE NAVAL ORDNANCE SYSTEMS COMMAND, INDICATING THAT THE QUESTIONED OVERTIME WORK EITHER HAD BEEN REQUESTED OR APPROVED RETROACTIVELY BY THE NAVAL TECHNICAL LIAISON OFFICER AT PITTSFIELD, MASSACHUSETTS. THAT OFFICER WAS NOT DELEGATED THE AUTHORITY TO APPROVE THE PERFORMANCE OF OVERTIME SERVICES AT PREMIUM RATES. HOWEVER, ON THE BASIS THAT THE GOVERNMENT APPARENTLY RECEIVED THE BENEFIT OF HAVING THE PARTICULAR WORK PERFORMED DURING OVERTIME PERIODS INSTEAD OF DURING REGULAR WORKING HOURS, THE NAVAL ORDNANCE SYSTEMS COMMAND STATES THAT THE NAVY WOULD NOT OBJECT IF OUR OFFICE DECIDED TO REQUEST YOUR AGENCY NOT TO ATTEMPT RECOVERY OF THE AMOUNT IN QUESTION.

THE REPORTED FACTS OF THE CASE INDICATE THAT THE GOVERNMENT MAY HAVE BENEFITED SUBSTANTIALLY BY REASON OF HAVING THE PARTICULAR WORK PERFORMED DURING OVERTIME PERIODS AND WE HAVE NO REASON TO BELIEVE THAT THE CONTRACTING OFFICER WOULD NOT HAVE APPROVED THE PERFORMANCE OF THE WORK AT PREMIUM RATES IF HE HAD BEEN AWARE OF THE APPARENT NECESSITY THEREFOR. THE CIRCUMSTANCES, IT SEEMS REASONABLE TO CONCLUDE THAT THE GOVERNMENT SUFFERED NO INJURY OR PREJUDICE RESULTING FROM PERFORMANCE OF THE WORK AT OVERTIME RATES WITHOUT THE PRIOR APPROVAL OF THE CONTRACTING OFFICER AND, SINCE NO QUESTION HAS BEEN RAISED WITH RESPECT TO THE REASONABLENESS OF THE OVERTIME RATES CHARGED TO THE GOVERNMENT, IT IS OUR OPINION THAT FURTHER COLLECTION ACTION BY YOUR AGENCY IN THE MATTER IS NOT REQUIRED.

COPIES OF THIS LETTER ARE BEING FURNISHED TO THE CONTRACTOR AND THE DEPARTMENT OF THE NAVY.