B-174508, JAN 13, 1972

B-174508: Jan 13, 1972

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THE CLAIM IS ASSERTED UNDER CONTRACT NO. THAT IS TO SAY. SHALL BE PROSPECTIVE ONLY FROM THE EFFECTIVE DATE ON WHICH SUCH INCLUSION IS PERMITTED.". WE HAVE REVIEWED THE REPORT OF THE AUDIT AGENCY AND THE BASES FOR ITS COST ADJUSTMENTS. WHICH IS RETURNED HEREWITH.

B-174508, JAN 13, 1972

AIRPORT LANDING FEES - GOVERNMENT LIABILITY CONCERNING CLAIM OF MINNEAPOLIS-ST. PAUL METROPOLITAN AIRPORTS COMMISSION (MAC) COVERING LANDING FEES IN THE AMOUNT OF $27,218.34 FOR CALENDAR YEAR 1969. THE DEFENSE CONTRACT AUDIT AGENCY DEDUCTED $18,608, $9,700 AS INTEREST AND THE REMAINDER THEREOF AS A DISPROPORTIONATE ALLOCATION OF AIRPORT OPERATING COSTS. THE COMP. GEN. FINDS NO BASIS TO QUESTION THIS DETERMINATION AND THE ADJUSTED AMOUNT ($8,610.34) MAY BE PAID.

TO COLONEL R. RANK, JR.:

WE REFER TO YOUR LETTER TCWC OF NOVEMBER 5, 1971, REQUESTING OUR ADVANCE DECISION ON THE CLAIM OF THE MINNEAPOLIS-ST. PAUL METROPOLITAN AIRPORTS COMMISSION (MAC), INVOICE NO. 18262, JUNE 1, 1971, COVERING LANDING FEES IN THE AMOUNT OF $27,218.34, FOR THE PERIOD JANUARY 1, 1969, TO DECEMBER 31, 1969.

THE CLAIM IS ASSERTED UNDER CONTRACT NO. DA25-075-ENG-3047, DATED NOVEMBER 10, 1952, AS AMENDED BY SUPPLEMENTAL AGREEMENT NO. 1, JULY 21, 1958. THE AGREEMENT PROVIDED FOR THE TRANSFER OF AIRPORT LANDS AND IMPROVEMENTS FROM THE GOVERNMENT TO MAC IN EXCHANGE FOR THE RIGHT OF THE GOVERNMENT TO USE THE AIRPORT AND ITS FACILITIES AT ALL TIMES WITHOUT CHARGE IN COMMON WITH OTHER AIRCRAFT. HOWEVER, IF USE BY GOVERNMENT MILITARY AIRCRAFT BECAME "SUBSTANTIAL", MAC COULD CHARGE TO THE GOVERNMENT THE PROPORTIONATE COST OF OPERATING AND MAINTAINING THE FACILITIES. EXCHANGE FOR SUBSTANTIAL USE OF THE AIRPORT BY TWO AIR FORCE GROUPS AND IN ORDER TO ASSURE THEIR ACCESS TO AND USE OF ALL FACILITIES FOR A FIVE-YEAR PERIOD THROUGH JUNE 30, 1953, AND YEAR BY YEAR THEREAFTER, THE GOVERNMENT AGREED TO REIMBURSE MAC'S OPERATION AND MAINTENANCE COSTS BY AN ANNUAL PAYMENT BASED UPON A WEIGHT-FREQUENCY FORMULA AS PRESCRIBED BY PARAGRAPH 4 OF THE AGREEMENT AS FOLLOWS:

"4. THE COMMISSION, IN DETERMINING ITS COST OF MAINTAINING AND OPERATING THE LANDING AREA OF THE AIRPORT, AND IN COMPUTING THE GOVERNMENT'S PROPORTIONAL SHARE OF SUCH COST, AS REFERRED TO HEREINBEFORE (A) SHALL USE THE WEIGHT-FREQUENCY FORMULA, SO CALLED, THAT IS TO SAY, THE WEIGHT OF THE PARTICULAR AIRCRAFT, WHICH WEIGHT SHALL BE THE WEIGHT OF SUCH AIRCRAFT AT THE TIME OF ITS TAKE-OFF, MULTIPLIED BY THE NUMBER OF ACTUAL TAKE-OFFS AND LANDINGS THEREOF; AND (B) SHALL NOT INCLUDE AS ITEMS OF COST

(I) DEFERRED MAINTENANCE; NOR

(II) DEPRECIATION, EXCEPT ON THE MACHINERY AND EQUIPMENT USED IN MAINTAINING SAID LANDING AREA; NOR

(III) PRINCIPAL OR INTEREST PAYMENTS IF ANY MADE BY THE COMMISSION IN CONNECTION WITH THE RETIREMENT OF ITS INDEBTEDNESS

UNLESS THE INCLUSION THEREOF, DURING THE TERM OF THIS AGREEMENT OR ANY RENEWAL OR EXTENSION HEREOF, SHALL BE DETERMINED TO BE PERMITTED THROUGH INTERPRETATION OF EXISTING LAW BY A COURT OF COMPETENT JURISDICTION OR BE PERMITTED BY LAW ENACTED SUBSEQUENT TO THE EXECUTION OF THIS AGREEMENT, OR BE PERMITTED BY APPLICABLE GOVERNMENTAL RULE, RULING OR REGULATION; PROVIDED THAT SUCH INCLUSION, IF PERMITTED AS AFORESAID, SHALL BE PROSPECTIVE ONLY FROM THE EFFECTIVE DATE ON WHICH SUCH INCLUSION IS PERMITTED."

AS A RESULT OF A DEFENSE CONTRACT AUDIT AGENCY REVIEW OF THE MAC CLAIM, THE AMOUNT OF $18,608 HAS BEEN DEDUCTED FROM THE TOTAL AMOUNT CLAIMED OF $27,218.34. THE AUDIT AGENCY HAD QUESTIONED ABOUT $9,700 OF THE CLAIMED AMOUNT BECAUSE IT REPRESENTED INTEREST EXPENSE AND THE REMAINDER THEREOF A DISPROPORTIONATE ALLOCATION OF AIRPORT OPERATING COSTS.

WE HAVE REVIEWED THE REPORT OF THE AUDIT AGENCY AND THE BASES FOR ITS COST ADJUSTMENTS, AND WE FIND NO REASON TO QUESTION ITS FINDINGS. THEREFORE, AND IN VIEW OF PARAGRAPH 4, ABOVE, THE VOUCHER, WHICH IS RETURNED HEREWITH, MAY BE PAID IN THE ADJUSTED AMOUNT ($8,610.34), IF OTHERWISE CORRECT.