FILE: B-208166 DATE: October 31, 1983

B-208166: Oct 31, 1983

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

Which are exclusively cognizable by Navy and therefore beyond GAO's general claims settlement authority. Who has raised a variety of allegations against the Federal Government in connection with an "air cushion vehicle" mass transportation system he claims to have designed. Laufman apparently believes was intended for use in connection with further development of his air cushion vehicle. We stayed our review of the claim pending resolution of the law-suite. [1] We were recently advised by the Justice Department that Mr. Laufman asserts that the County is in receipt of the necessary funds and thus he is entitled to the $80. Funds were authorized by the Water Resources Development Act of 1976.

FILE: B-208166 DATE: October 31, 1983

Claimant states several general claims which fail to establish the legal liability of the United States or his right to payment as required by 4 C.F.R. Sec. 31.7. Claimant also states copyright infringement and damage claims, which are exclusively cognizable by Navy and therefore beyond GAO's general claims settlement authority. Accordingly, claimant fails to state a claim which GAO may allow.

The Honorable Duncan L. Hunter Member, United States House of Representatives 2530 Highland Avenue National City, California 92050

Dear Mr. Hunter:

By letter dated August 16, 1982, you expressed an interest in the claim of your constituent, Mr. Harry A. Laufman, who has raised a variety of allegations against the Federal Government in connection with an "air cushion vehicle" mass transportation system he claims to have designed. In a subsequent letter dated October 1, you inquired about an alleged $10 million block grant awarded to the City of Los Angeles, California, which Mr. Laufman apparently believes was intended for use in connection with further development of his air cushion vehicle. In order to fully evaluate the matters Mr. Laufman raised, we contacted the Department of Transportation to obtain further information. Shortly after we received that information, Mr. Laufman filed suit in the United States District Court for the Southern District of California, and we stayed our review of the claim pending resolution of the law-suite. [1] We were recently advised by the Justice Department that Mr. Laufman has chosen not to pursue his claim for money damages in the suit and that we may proceed with our review.

I. SUMMARY OF ALLEGATIONS AND SCOPE OF GAO REVIEW

Mr. Laufman essentially states his several claims as follows:

1. The Los Angeles County Board of Supervisors allegedly promised to finance a feasibility study of the potential uses of his air cushion vehicle, at a cost of $80,000, out of grant funds made available by the Urban Mass Transportation Administration (UTMA), Department of Transportation. Mr. Laufman asserts that the County is in receipt of the necessary funds and thus he is entitled to the $80,000.

2. Funds were authorized by the Water Resources Development Act of 1976, Public Law 94-588, approved October 22, 1976, 90 Stat. 2917, to finance a feasibility study of the surface and water needs of the San Pedro Bay ports. Mr. Laufman asserts $1.5 million appropriated to the Department of the Army pursuant to this authorization was intended for his use and that he is entitled to a "fair" portion of these funds.

3. Mr. Laufman requests a travel advance to cover the costs of a trip to Washington, D.C., so that he can establish a "dialogue" regarding his claim with appropriate representatives of this office.

4. Funds appropriated to the United States Navy were expended on a course, offered at the San Diego Naval Base in 1980-1981, that covered the air cushion concept. Mr. Laufman alleges that the instructor of the course received over $2,000, and that the course improperly used materials on which he (Mr. Laufman) holds a copyright.

5. Mr. Laufman states that in February of 1982 his air cushion vehicle was damaged by a member of the United States Navy while it was stored on a military installation. He asserts that he is entitled to recover the cost of repairing the damage.

Next, Mr. Laufman requests priority consideration on a $10 million grant application, which he filed with UMTA in 1978. He now believes it has been paid over to the City of Los Angeles, the Southern California Association of Governments, and/or the Southern California Rapid Transit District in the form of a block grant.

Finally, Mr. Laufman requests that this office correct alleged misstatements regarding his air cushion vehicle contained in separate reports by the City of Los Angeles Bureau of Engineering and by the Los Angeles Transportation Commission.

We reviewed Mr. Laufman's various allegations primarily from the perspective of our claims settlement authority, i.e., our authority to settle claims by or against the United States as provided in 31 U.S.C. Sec. 3702 (formerly 31 U.S.C. Sec. 71). This provision empowers us to make administrative determinations of entitlement on monetary claims against the United States, except where settlement is statutorily committed to the jurisdiction of come other agency. Our standard in settling claims is set forth in 4 C.F.R. Sec. 31.7:

"Settlements are founded on a determination of the legal liability of the United States under the factual situation involved as established by the written record. The burden is on claimants to establish the liability of the United States, and the claimants' right to payment.* * *"

We evaluated each allegation against this standard.

The first five allegations purport to be monetary claims. As to the first three, Mr. Laufman has failed to establish any basis for liability on the part of the United States. The fourth an fifth allegations present matters beyond our claims settlement jurisdiction. Should Mr. Laufman wish to pursue these two items further, he must do so with the Department of the Navy. The remaining matters raised by Mr. Laufman are not monetary claims against the United States and we are unaware of any authority which would permit us to take the requested actions. We have, however, developed some information regarding the alleged $10 million block grant and will advise you of our findings and our rather limited role in reviewing disputes between grantor agencies and rejected applicants. With respect to the final item, we have absolutely no authority to direct the municipal agencies to alter their reports and will not comment further on this item.

We emphasize that our review is limited to issues of legal liability. We express no opinion whatsoever on the merits, technological feasibility, or potential uses, if any, of Mr. Laufman's air cushion vehicle/system.

II. MONETARY CLAIMS

1. Feasibility study from UMTA grant funds

Mr. Laufman's first allegation is that the Los Angeles County Board of Supervisors promised to conduct a feasibility study of his vehicle using $80,000 in UMTA grant funds, which was not done. UMTA has advised us that it has not been able to identify a grant made to Los Angeles for this purpose. Therefore, this allegation appears to involve a matter between Mr. Laufman and appropriate local authorities.

If UMTA had made a grant for the specific purpose of studying Mr. Laufman's vehicle, the Federal Government would of course have an interest in assuring that the funds were applied to the purpose for which they were awarded. Even if this were the case, however, the role of the Federal Government would be limited to proceeding against the grantee for misuse of the funds; there would be no basis to award any money directly to Mr. Laufman.

Absent evidence that a grant was made for the purpose of studying Mr. Laufman's vehicle, or that the grantee violated a provision of a grant agreement, the governing principle is that grant funds when applied to the purpose of the grant lose their character and identity as Federal funds. E.g., 43 Comp.Gen. 697, 699 (1964). A grantee has a measure of discretion in choosing the means to implement a grant. If the grantor agency has not "controlled" this discretion through appropriate provisions in the grant agreement, it may not interfere after the fact with the otherwise lawful exercise of that discretion.

Here, we have nothing more than Mr. Laufman's unsupported allegation. He has produced no documentary evidence that a grant was in fact made for the propose he claims, or that a provision of a grant agreement was violated in some way as to cause him injury. Therefore, he has not satisfied the burden of establishing the liability of the United States as required by 4 C.F.R. Sec. 31.7, quoted above. Accordingly, there is absolutely no legal basis for allowing this portion of the claim, Any grievance Mr. Laufman may have with respect to this particular allegation would appear to be with local authorities, not the Federal Government.

2. Water, Resources Development Act of 1976

Mr. Laufman next alleges that $1.5 million or some portion thereof, appropriated to study the transportation needs of the San Pedro Bay ports were intended for his use. We can find no legal basis to support his allegation.

The San Pedro Bay project authorization is found in the Water Resources Development Act of 1976, Pub. L. 94-588 (October 22, 1976, Sec. 163, 90 Stat. 2917, 2934, set forth below:

"The Secretary of the Army, acting through the Chief of Engineers, is authorized and directed to study water and surface transportation needs resulting from the expansion and further development of the San Pedro Bay ports. Such study shall include, but not be limited to the feasibility and advisability of enlarging the Dominquez Channel for flood control purposes."

We have reviewed the legislative history of the 1976 Act and have found no indication that it was intended to include Mr. Laufman's air cushion vehicle. [2]

Appropriations to implement authorizations such as section 163 are made to the Corps of Engineers, Department of the Army, in lump-sum form in the annual energy and water development appropriation acts. Allowances for specific projects are set forth in the relevant conference report. We have reviewed appropriation aces for fiscal years 1978 through 1982, and have identified a total allowance of $1,455,000 for the San Pedro Bay port project. A detailed summary is set forth in Appendix 1. We have found no indication in any of these appropriation acts or in their respective legislative histories that any of the funds were intended to benefit Mr. Laufman or his vehicle.

While, had it so desired, the Army perhaps could have included the air cushion concept it its study as authorized by section 163, it was an is under no legal requirement to do so. Accordingly, there is no legal basis to conclude that Mr. Laufman is in any way entitled to any of the funds appropriated pursuant to section 163.

3. Travel advance

Mr. Laufman seeks a "travel advance" to finance a trip to Washington so that he may discuss his claim in person with representatives of the General Accounting Office. As noted above, GAO settles claims on the basis of written record and does not take oral testimony. Therefore, the cost of a trip to Washington is not "necessary expense" of resolving Mr. Laufman's claims. Even if it could be so viewed, however, it is well-established that expenses incurred by a claimant in the preparation, presentation, and proof of an administrative claim may not be reimbursed in the absence of statutory authority. E.g., 8 Comp. Dec. 498 (1902); 17 Comp.Gen. 831 (1938). There is no statutory authority which would permit us to authorize payment of Mr. Laufman's travel expenses or any other expenses incident to the presentation of his claim. Accordingly, this portion of the claim must also be disallowed.

4. Copyright claim

Mr. Laufman alleges that the navy conducted a training course at the San Diego Naval Base and used, without authority, materials on which he holds a valid copyright. Although he has furnished us with a copy of his certificate of copyright registration on certain materials concerning the air cushion vehicle, we have no jurisdiction to consider the merits of this portion of the claim.

As we noted earlier, our claims settlement authority does not extend to claims where settlement authority has been statutorily committed to some other agency. This is the case with copyright infringement claims. The resolution of copyright infringement claims is governed by the provisions of 28 U.S.C. Sec. 1498(b). Under this statute, the exclusive remedy for a copyright infringement claim is an action in the United States Claims Court for the "responsible and entire compensation" resulting from the alleged infringement. The statue also authorizes the Federal agency responsible for the alleged infringement to:

"[E]nter into an agreement with the copyright owner in full settlement and compromise for the damage accruing to him by reason of such infringement and to settle the claim administratively out of available appropriations."

The statute further provides that actions must be files no later that 3 years after the alleged infringement, except that the time between receipt of a written claim by the agency concerned and the agency's notice of denial is not included.

Thus, Mr. Laufman must either sue in the Claims Court of file his copyright infringement claim directly with the Department of the Navy. Filing procedures are contained in the Defense Acquisition Regulations, 32 C.F.R. Secs. 9-403 and 9-404 (1982). The claim must be in writing and should include:

(a) an allegation of infringement;

(b) a request for compensation, wither express or implied

(c) a citation of the copyright(s) alleged to be infringed

(d) a sufficient designation of the alleged infringing item or process to permit identification, giving the military or commercial designation, if known, to the claimant;

(e) a designation of at least one claim of each copyright alleged to be infringed; or

(f) as an alternative to (d) and (e) above, a certification that the claimant has made a bona fide attempt to determine the item or process which is alleged to infringe, but was unable to do so, giving reasons, and stating a reasonable basis for his belief that copyright(s) are being infringed.

We would have no authority to review the Navy's settlement action.

5. Damage to vehicle

Mr. Laufman claims the cost of repairs to his vehicle, allegedly damaged by Navy personnel in February 1982 while stored on a military installation. This is a tort claim and, as with the copyright infringement claim, is beyond our settlement jurisdiction.

Depending on the specific facts, Mr. Laufman's claim might be cognizable under the Federal Tort Claims Act (28 U.S.C. Secs. 2671-80) or the Military Claims Act (10 U.S.C. Sec. 2733). In either case, the claim must be submitted to, and adjudicated by, the Navy. Under either statute, Navy's settlement action is final and conclusive (except for a claimant's right to seek judicial review under the Federal Tort Claims Act) and not reviewable by GAO. 28 U.S.C. Sec. 2672; 10 U.S.C. Sec. 2735.

The Navy has detailed regulations on claims submission and settlement, found at 32 C.F.R. Part 750. Subpart A (Secs. 750.1-750.24) consists on general provisions. Subpart B (Secs. 750.30-750.40) deals with the Federal Tort Claims Act. Subpart C (Secs. 750.50-750.57) deals with the Military Claims Act.

Mr. Laufman should be advised to submit his claim on Standard Form 95 (32 C.F.R. Sec. 750.12(a)), which he may obtain from any Navy installation or virtually any other Government agency. The claim must be signed and must specify the exact dollar amount of the claim. The
activity involved, if known," or to the Judge Advocate General of the
Navy, Washington, D.C. 20370. 32 C.F.R. Sec, 750.12(b).

The Federal Tort Claims Act and Military Claims Act both have 2-year
statutes of limitations. 28 U.S.C. Sec. 2401(b); 10 U.S.C. Sec.
2733(b)(1). Thus, if the damage occurred in February 1982, Mr. Laufman
must file his claim so that it is received before the anniversary date in
February 1984. For purposes of filing his claim, Mr. Laufman need not
concern himself with the appropriate statute. He need merely complete
and submit the Standard Form 95. The Navy will adjudicate the claim
under the appropriate statute and will contact Mr. Laufman for additional
information if necessary.

Please understand that, with respect to the copyright claim and the tort
claim, we can express no opinion on the merits. We are merely offering
guidance on how Mr. Laufman may proceed to have his claim considered.

III. UMTA GRANTS TO CALIFORNIA PUBLIC AGENCIES

Mr. Laufman's request for "priority consideration" of the $10 million
grant application he submitted to UMTA in 1978 amounts to a complaint
over UMTA's unwillingness to approve the application. As a general
proposition, GAO will not consider "protests" concerning the propriety of
individual grant awards. B-203096, May 20, 1981; B-190092, September 12,
1977. Stated differently, GAO will not consider a complaint by a
rejected applicant that he or it should be received the grant. Our role
is limited to undertaking a rather narrow review of the propriety of
contract awards made by a grantee in furtherance of grant purposes upon
request of a prospective contractor, a situation not applicable here.
See 55 Comp.Gen. 390 (1975); 40 Fed. Reg. 42406 (September 12, 1975).

Mr. Laufman submitted his application to UMTA on April 28, 1978. In a
letter to Mr. Laufman dated May 19, 1978, UMTA explained that it had no
discretionary funds available which could be used to support a
pre-production prototype vehicle, and rejected the application.

In the May 1978 letter, UMTA further explained that it has basically two
types of programs for financial assistance to local public bodies
-- Capital Assistance Grants (49 U.S.C. Sec 1602) and Research
Development and Demonstration (RD&D) Grants (49 U.S.C. Sec. 1605). Had
Los Angeles wished to pursue Mr. Laufman's proposal as a "fixed guideway
transit proposal" and thereby seek Capital Assistance funds, the City
would have had to incorporate the option in its "alternatives analysis"
(an UMTA requirement). According to UMTA, Los Angeles was at that time
undertaking such an alternatives analysis without considering inclusion
of the air cushion vehicle. Also, if the City (preferably together with
other local communities) had been interested in funding Mr. Laufman's
project, it could have applied for RD&D funds provided certain criteria
were met. Mr. Laufman could not however, apply for a grant oh behalf of
the City of Los Angeles. In view of UMTA's action, and since Mr. Laufman
has no legal entitlement to receive grant funds, there is not action this
office can take in the matter.

Questions have also been raised concerning a "block grant" allegedly
awarded during the 1975-1977 period. Mr. Laufman is apparently under the
impression that UMTA may have had funds prior to 1978 which could have
been used for his project and which were paid over to one or more of the
local agencies as a block grant during the 1975-1977 period while he was
attempting to obtain local support for his project. In any event, UMTA
advised that it had no authority to make block grant awards under the
original Urban mass Transportation Act of 1964, 49 U.S.C. Secs.
1601-1613. It did not receive block grant authority until the enactment
of Public Law 97-424, January 6, 1983, Sec, 303(a), to be codified at 49
U.S.C. Sec. 1607a.

In order to be a responsive as possible, we reviewed UMTA's records on
grant awards to California public agencies between 1975 and 1977, to
identify grants made to the entities cited by Mr. Laufman -- the City of
Los Angeles, the Southern California Association of Governments, and the
Southern California Rapid Transit District. (We understand that Mr.
Laufman has already been provided with a computer printout of UMTA grants
awarded to California public agencies.)

Appendix 2 contains a brief summary of the capital assistance projects
funded by UMTA, between 1975 and 1977, upon application of the Southern
California Rapid Transit District. According to UMTA's records, Mr.
Laufman's concept was not included among any of these grants. Nor was
there any record of similar grants to either the City of Los Angeles or
the Southern California Association of Governments.

Appendix 3 contains a brief summary of the research, development and
demonstration projects funded by UMTA during the period in question, upon
application by the Southern California Rapid Transit District and the
City of Los Angeles. Accordingly to UMTA's records, Mr. Laufman's
concept was not included among any of these grants either. Nor was there
any record of similar grants to the Southern California Association of
Governments.

In brief, we have found no evidence of a $10 million grant, block or
otherwise, by UMTA to a local public agency for use in connection with
Mr. Laufman's air cushion vehicle.

We hope this response serves the purposes of your inquiry. We received
similar inquiries from Senator Alan Cranston and Representative Jim
Bates, and are providing similar responses to them.

Sincerely yours,

Comptroller General of the United States

1. Mr. Laufman filed his claims in the case of Harry A. Laufman v. United States Civil No. 83-680-JLI(I) (S.D. Cal. Filed Apr. 8, 1983). He filed a similar claim against the Government once before; it was dismissed without prejudice for failure to comply with Rule 8(a), Federal Rules of Civil Procedure, and Local Rule 4(b). See Harry A. Laufman v. United States, Civil No. 79-041914-AAH(6x) (C.D. Cal. Dismissed Dec. 27, 1979).

2. Section 163 is discussed in the report of the House Committee on Public Works and Transportation, H.R. Rep No. 94-1702 (to accompany H.R. 15636), pages 121-22 (1976). There is no mention of the air cushion vehicle or concept. There is no discussion of section 163 in the report of the Senate Committee on Public Works (S. Rep. No. 94-1255) or the conference committee (H.R. Rep No. 94-1755).

APPENDIX 1

Appropriations for San Pedro Bay Ports Project

Fiscal year Relevant Amount allowed by Conference appropriation act Conference Committee Report for San Pedro Bay reference ports project

1978 Public Law 95-96 $150,000 H.R. Rep. 91 Stat. 797, 799 No. 95-507, Page 14

1979 Public Law 95-482, $100,000 H.R. Rep. 92 Stat. 1603 No. 95-1490, page 25

1980 Public Law 96-69, $400,000 H.R. Rep. 93 Stat. 437, 442 No. 96-388, page 37

1981 Public Law 96-367, $325,000 H.R. Rep. 94 Stat. 1331, 1336 No. 96-1366 page 45

1982 Public Law 97-88, $480,000 H.R. Rep. 95 Stat. 1135 No. 97-245,

TOTAL $1,455,000

APPENDIX 2

UMTA Captial Assistance Grants

Project No. Description Date Approved Obligations

Southern California Rapid Transit District

CA030106 Purchase 30 articulated 0l/21/76 $9,822,736 buses; acquire property, and construct replacement facilities, purchase related equipment

CA030090 Funds to finance the 07/29/77 $3,701,240 addition or 200 lifts to buses and increased cost of the purchase of buses

CA030132 Purchase 300 buses; 91 09/30/77 $33,348,060 autos; 90 radios; 12 pick-up trucks other support equipment

CA030121 Purchase 75 new 09/24/76 $2,243,200 automobiles; 5 radios; shop equipment; maintenance equipment; miscellaneous equipment and computer equipment

APPENDIX 3

UMTA Research, Development, and Demonstration Grants

Project No. Description Date Approved Obligations

Southern California Rapid Transit District

CAO60069 Evaluate double deck 02/26/75 $47,055 buses operating in daily revenue service

CAO60083 Santa Monica Freeway 06/30/75 $807,800 concurrent flow reserved bus Or carpool lane demonstration project

CA060119 Automatic vehicle 09/24/76 $140,016 monitor (AVM) Expermintal

CA060109 Employment center 09/24/77 $538,100 subscription service demonstration project

City of Los Angeles

CA060112 Downtown People Mover 06/30/76 $118,000 (DPM) preliminary engineering grant