B-24307, SEP 14, 1942

B-24307: Sep 14, 1942

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AS FOLLOWS: "THERE IS TRANSMITTED HEREWITH FOR ADVANCE DECISION VOUCHER IN FAVOR OF FOLEY BROTHERS. "THERE IS DOUBT AS TO PROPRIETY OF PAYMENT OF THE FOLLOWING ITEMS: "A. "C. EXCESS COST OF PURCHASING ONE-WAY RAILROAD TICKETS IN LIEU OF ROUND TRIP TICKET FOR TRAVEL BETWEEN POINTS WHEN THE TRAVEL IS OUTLINED IN DETAIL ON THE TRAVEL AUTHORIZATION. "THIS OFFICE IS IN DOUBT AS TO THE PROPRIETY FOR PAYMENT OF THE ITEMS (A.). 1941 THAT 'WHETHER A PARTICULAR ITEM OF EXPENSE IS REIMBURSABLE TO A CONTRACTOR AS SUCH. OR WHETHER IT IS TO BE ABSORBED BY THE CONTRACTOR AS BEING INCLUDED IN THE LUMP-SUM-FIXED-FEES OR OTHER PAYMENTS MADE. POSTAGE AND OTHER NECESSARY ITEMS ARE AUTHORIZED BY PARAGRAPH 1R OF ARTICLE II OF THE CONTRACT WHICH READS IN PART AS FOLLOWS: 'SUCH OTHER EXPENSES NOT EXPRESSLY EXCLUDED BY OTHER PROVISIONS OF THE SUBCONTRACT AS SHOULD.

B-24307, SEP 14, 1942

PRECIS-UNAVAILABLE

MAJOR R. H. STIKA, F.S., U.S. ARMY:

THERE HAS BEEN RECEIVED, BY INDORSEMENT OF JULY 23, 1942, FROM HEADQUARTERS, SERVICES OF SUPPLY, FISCAL DIVISION, YOUR LETTER OF JUNE 13, 1942, AS FOLLOWS:

"THERE IS TRANSMITTED HEREWITH FOR ADVANCE DECISION VOUCHER IN FAVOR OF FOLEY BROTHERS, INC., AND WALBRIDGE ALDINGER CO., SUBCONTRACT NO. 2, UNDER PRIME CONTRACT NO. W-ORD-527, IN THE AMOUNT OF $631.42.

"THERE IS DOUBT AS TO PROPRIETY OF PAYMENT OF THE FOLLOWING ITEMS:

"A. TELEGRAPH CHARGES ON AN ADVANCE TO TRAVELER TOTALLING $1.46.

"B. HOTEL SERVICE CHARGES ON LONG-DISTANCE TELEPHONE CALLS $.60.

"C. EXCESS COST OF PURCHASING ONE-WAY RAILROAD TICKETS IN LIEU OF ROUND TRIP TICKET FOR TRAVEL BETWEEN POINTS WHEN THE TRAVEL IS OUTLINED IN DETAIL ON THE TRAVEL AUTHORIZATION. THE TRAVEL BETWEEN PITTSBURGH, PA. AND HUNTINGTON, W.VA. AND RETURN ON FEBRUARY 15 AND 19, 1942 (AMOUNT OF EXCESS COST HAS NOT BEEN DETERMINED.)

"D. TAXICAB FARES BETWEEN PLACE OF LODGING AND FIRST POST OF DUTY AND RETURN TO PLACE OF LODGING, TOTALLING $39.55.

"THIS OFFICE IS IN DOUBT AS TO THE PROPRIETY FOR PAYMENT OF THE ITEMS (A.) AND (B.) FOR REASON THAT THE COMPTROLLER GENERAL OF THE UNITED STATES HAS HELD IN DECISION NO. B-21209, DATED NOVEMBER 12, 1941 THAT 'WHETHER A PARTICULAR ITEM OF EXPENSE IS REIMBURSABLE TO A CONTRACTOR AS SUCH, UNDER THIS FORM OF CONTRACT, OR WHETHER IT IS TO BE ABSORBED BY THE CONTRACTOR AS BEING INCLUDED IN THE LUMP-SUM-FIXED-FEES OR OTHER PAYMENTS MADE, DEPENDS UPON THE NATURE OF THE EXPENSE AND THE TERMS OF THE CONTRACT.' THE CONTRACT PROVIDES FOR REIMBURSEMENT AT THE RATE OF $6.00 PER DAY IN LIEU OF ALL OTHER EXPENSES, EXCLUSIVE OF TRANSPORTATION. THE ITEMS OF TELEPHONE TOLLS, POSTAGE AND OTHER NECESSARY ITEMS ARE AUTHORIZED BY PARAGRAPH 1R OF ARTICLE II OF THE CONTRACT WHICH READS IN PART AS FOLLOWS: 'SUCH OTHER EXPENSES NOT EXPRESSLY EXCLUDED BY OTHER PROVISIONS OF THE SUBCONTRACT AS SHOULD, IN THE OPINION OF THE CONTRACTOR AND THE CONTRACTING OFFICE, BE INCLUDED IN THE COST OF THE WORK.

"THERE IS DOUBT IN CONNECTION WITH ITEM (C.) FOR REASON THAT THE TRAVELER WAS PUT ON NOTICE AS TO THE TRAVEL TO BE MADE.

"THERE IS DOUBT AS TO ITEM (D.) FOR REASON THAT THE COMPTROLLER GENERAL IN DECISION B-22270 DATED 12-26-41 STATES THAT THE TERM '$6.00 PER DIEM IN LIEU OF ALL OTHER EXPENSES' WOULD ORDINARILY INCLUDE THE EXPENSE OF GOING FROM PLACE OF LODGING TO PLACE OF DUTY AND RETURN TO PLACE OF LODGING. THE AMOUNT IN QUESTION COVERS ONLY TAXICAB FARES FROM PLACE OF LODGING TO A POST OF DUTY AND RETURN TO PLACE OF LODGING.

"THE QUESTIONS REFERRED TO ABOVE APPLY TO NUMEROUS VOUCHERS ON HAND IN THIS OFFICE AND AN ADVANCE DECISION IS DESIRED IN ORDER TO ESTABLISH THE PROPRIETY FOR PAYMENT OF THESE ACCOUNTS.

"THE UNDERSIGNED IS A DISBURSING OFFICER AND THE ATTACHED VOUCHER HAS BEEN PRESENTED TO HIM FOR PAYMENT."

IT APPEARS FROM THE FACTS OF RECORD THAT IN THE PERFORMANCE OF CONTRACT NO. W-ORD-527, DATED JULY 14, 1941, ENTERED INTO ON A COST PLUS-A-FIXED- FEE BASIS AS AUTHORIZED UNDER THE ACT OF JULY 2, 1940, 54 STAT. 712, THE PRIME CONTRACTOR, FEDERAL CARTRIDGE CORPORATION, UNDER DATE OF JULY 21, 1941, ENTERED INTO SUBCONTRACT NO. 2-- LIKEWISE ON A COST-PLUS-A-FIXED-FEE BASIS-- WITH THE JOINT CONTRACTORS, FOLEY BROTHERS, INC. AND WALBRIDGE, ALDINGER COMPANY, FOR THE CONSTRUCTION (INCLUDING INSTALLATION OF PRODUCTION EQUIPMENT) OF AN ORDNANCE MANUFACTURING PLANT. IT FURTHER APPEARS THAT IN ORDER TO EXPEDITE THE PROCUREMENT OF THE NECESSARY MATERIALS FOR SUCH WORK, THE SUBCONTRACTOR'S EMPLOYEE, HARRY GILBERT, WAS AUTHORIZED BY TRAVEL AUTHORIZATIONS, APPROVED BY THE PRIME CONTRACTOR AND BY THE CONTRACTING OFFICER'S REPRESENTATIVE, TO PROCEED TO, AND CONTACT VARIOUS FIRMS LOCATED IN THE CITIES THEREIN DESIGNATED, AND THAT THE VOUCHER NOW UNDER CONSIDERATION COVERS THE AMOUNT PAID BY THE SUBCONTRACTOR TO THE SAID HARRY GILBERT FOR THE EXPENSES SO INCURRED.

THE SAID VOUCHER, APPROVED FOR PAYMENT BY THE CONTRACTING OFFICER'S REPRESENTATIVE, IS SUPPORTED BY ITEMIZED STATEMENTS OF THE EXPENSES INCURRED WHILE IN A TRAVEL STATUS, INCLUDING COST OF TRANSPORTATION, PER DIEM ALLOWANCES, AND MISCELLANEOUS ITEMS, TOGETHER WITH SIGNED RECEIPTS IN EVIDENCE OF THE PAYMENT OF THE AMOUNT THEREOF BY THE SUBCONTRACTOR.

RELATIVE TO REIMBURSEMENT FOR THE EXPENDITURES INCURRED BY THE SUBCONTRACTOR, REFERRED TO IN THE SUBCONTRACT AS THE "CONSTRUCTOR,"ARTICLE II THEREOF PROVIDES, IN PERTINENT PART, AS FOLLOWS:

"1. REIMBURSEMENT FOR CONSTRUCTOR'S EXPENDITURES. THE CONSTRUCTOR SHALL BE REIMBURSED IN THE MANNER HEREINAFTER DESCRIBED FOR SUCH OF HIS ACTUAL EXPENDITURES IN THE PERFORMANCE OF THE WORK AS MAY BE APPROVED OR RATIFIED BY THE CONTRACTOR AND THE CONTRACTING OFFICER, AND AS ARE INCLUDED IN THE FOLLOWING ITEMS:

"G. *** EXPENSES OF *** EXPEDITING THE PRODUCTION AND TRANSPORTATION OF MATERIALS AND EQUIPMENT. EXPENDITURES UNDER THESE ITEMS MUST HAVE THE WRITTEN AUTHORIZATION OF THE CONTRACTOR AND THE CONTRACTING OFFICER IN ADVANCE.

"O. IF THE CONSTRUCTOR AND/OR HIS REPRESENTATIVE SHALL BE REQUIRED TO TRAVEL, THE GOVERNMENT WILL REIMBURSE THE CONSTRUCTOR FOR THE TRANSPORTATION, INCLUDING PULLMAN WHERE NECESSARY AND WILL ALLOW FOR SUCH TRAVEL SIX DOLLARS ($6.00) PER DAY IN LIEU OF ALL OTHER EXPENSES. ***

"ALL TRAVEL SHALL BE EITHER AUTHORIZED OR APPROVED IN WRITING BY THE CONTRACTOR AND THE CONTRACTING OFFICER. SHOULD THE CONSTRUCTOR, OR ANY REPRESENTATIVE THEREOF, REMAIN IN A TRAVEL STATUS IN EXCESS OF SIX (6) DAYS AT ANY ONE TIME, NOT INCLUDING THE TIME CONSUMED IN TRAVEL THE COST FOR SUCH EXCESS TRAVEL STATUS SHALL BE AT THE EXPENSE OF THE CONSTRUCTOR, UNLESS OTHERWISE ORDERED IN WRITING BY THE CONTRACTOR AND THE CONTRACTING OFFICER."

ARTICLE III-1 OF THE SUBCONTRACT PROVIDES THAT REIMBURSEMENT FOR THE EXPENDITURES INCURRED IN ACCORDANCE WITH THE SAID ARTICLE II WILL BE MADE BY THE GOVERNMENT.

WITH REFERENCE TO THE SPECIFIC ITEMS OF EXPENSE REFERRED TO IN YOUR LETTER, IT APPEARS THAT AS TO THE EXPENSE FOR TELEGRAPH CHARGES-- THE AMOUNT OF WHICH IS CONFIRMED BY A RECEIPTED INVOICE FROM THE WESTERN UNION TELEGRAPH COMPANY-- THIS EXPENSE WAS INCURRED BY THE SUBCONTRACTOR IN WIRING FUNDS FROM ST. PAUL, MINNESOTA, TO MR. GILBERT, AS AN ADVANCE ON HIS TRAVEL EXPENSE WHILE IN AN AUTHORIZED TRAVEL STATUS AT PITTSBURGH, PENNSYLVANIA. SO FAR AS CONCERNS THE CONTRACT AUTHORIZATION OF A PER DIEM ALLOWANCE "IN LIEU OF ALL OTHER EXPENSES, EXCLUSIVE OF TRANSPORTATION," WHILE ORDINARY LIVING EXPENSES INCIDENTAL TO SUBSISTENCE, AS WELL AS EXPENSES INCURRED BY THE TRAVELER FOR HIS PERSONAL CONVENIENCE, ARE TO BE REGARDED AS INCLUDED THEREIN, THE EXPENSE HERE INVOLVED DOES NOT APPEAR TO BE OF THIS NATURE. RATHER, IT APPEARS TO BE FOR CLASSIFICATION AS AN EXPENSE INCIDENT TO, AND NECESSITATED BY, THE PERFORMANCE, ON BEHALF OF THE GOVERNMENT, OF THE SERVICE OF "EXPEDITING THE PRODUCTION AND TRANSPORTATION OF MATERIALS AND EQUIPMENT" AND, AS SUCH, CONSTITUTES A PROPER CHARGE TO THE GOVERNMENT UNDER ARTICLE II, PARAGRAPH 1 G, OF THE SUBCONTRACT, QUOTED ABOVE IN PART.

RELATIVE TO THE ITEM OF HOTEL SERVICE CHARGES ON LONG DISTANCE TELEPHONE CALLS, IT APPEARS THAT THE SAID CALLS WERE MADE ON OFFICIAL BUSINESS WHILE IN A TRAVEL STATUS UNDER TRAVEL AUTHORIZATION NO. 214, DATED FEBRUARY 8, 1942, WHEREIN IT IS SPECIFICALLY PROVIDED THAT--

"THE TRAVELER IS HEREBY AUTHORIZED TO INCUR EXPENSES IN THE PERFORMANCE OF OFFICIAL DUTY FOR CARFARES, BUS FARES, TAXI FARES, TELEPHONE AND TELEGRAPH CHARGES, POSTAGE AND OTHER SIMILAR EXPENSES NECESSARY IN EXPEDITING PRODUCTION OR TRANSPORTATION OF MATERIALS AS SET FORTH IN ARTICLE II, PARAGRAPH 1G OF SUBCONTRACT NO. 2 TO PRINCIPAL CONTRACT NO. W- ORD-527."

IT IS RECOGNIZED THAT THE CHARGES INVOLVED ARE THOSE REGULARLY MADE BY HOTELS FOR CALLS OF THIS NATURE AND, SINCE THE EXPENSE OF SUCH CALLS IS REIMBURSABLE, THE EXPENSE INCURRED INCIDENTAL THERETO APPEARS PROPER FOR PAYMENT BY THE GOVERNMENT.

WITH RESPECT TO THE CHARGE MADE FOR THE COST OF ONE WAY TICKETS FROM PITTSBURGH, PENNSYLVANIA, TO HUNTINGTON, WEST VIRGINIA, AND RETURN, IT IS STATED BY THE SUBCONTRACTOR IN LETTER OF JUNE 1, 1942, TO THE OFFICE OF THE AREA ENGINEER, IN EXPLANATION OF THE TRAVELER'S FAILURE TO PURCHASE A ROUND-TRIP TICKET, IN PERTINENT PART, AS FOLLOWS:

"IN REPLY TO YOUR INTER-OFFICE COMMUNICATION DATED MAY 23, 1942 IN WHICH YOU REQUESTED EXPLANATION FOR HARRY GILBERT'S FAILURE TO PURCHASE A ROUND TRIP TICKET FEBRUARY 15TH FROM PITTSBURGH, PA. TO HUNTINGTON, WEST VA. AND RETURN, WE WISH TO ADVISE YOU THAT IT HAS BEEN THE POLICY OF THE CHIEF EXPEDITER'S OFFICE TO INSIST THAT EXPEDITERS, WHENEVER POSSIBLE, TO DETERMINE IN ADVANCE AN ACCURATE ITINERARY AND TO PURCHASE A ROUND TRIP TRANSPORTATION. BUT IN SOME INSTANCES, IT IS IMPOSSIBLE TO DO THIS BECAUSE OF UNEXPECTED CIRCUMSTANCES WHICH ARISE AFTER THE EXPEDITER HAS CONTACTED THE FIRM.

"IN REFERENCE TO INVOICE NO. 11 OF MR. HARRY GILBERT, EXPEDITER, FOLEY BROTHERS, INC., AND WALBRIDGE, ALDINGER CO., YOU WILL NOTE THAT HE HAS PURCHASED ROUND TRIP TICKETS FROM PITTSBURGH, PA. TO JEANNETTE, PA. FEBRUARY 9TH AND FEBRUARY 11TH. YOU WILL ALSO NOTE THAT THESE TRIPS WERE MADE IN ONE DAY. IN REGARD TO THE TRIP FROM PITTSBURGH, PA. TO HUNTINGTON, WEST VA., YOU WILL NOTE THAT THIS TRIP STARTED ON FEBRUARY 15TH AND ENDED FEBRUARY 19TH; HE WAS IN HUNTINGTON FOR A PERIOD OF 2 1/2 DAYS. DURING THIS TIME, HE COULD HAVE LEFT HUNTINGTON AND GONE TO ANY CITY WITHIN A RADIUS OF 200 MILES OF PITTSBURGH, PA., AS SET FORTH IN TRAVEL AUTHORIZATION NO. 214. AT THE TIME THE AUTHORIZATION WAS WRITTEN, IT WAS DETERMINED THAT MR. GILBERT WOULD GO TO HUNTINGTON, WEST VA., BUT THE FACT THAT THE AUTHORIZATION STATES THAT HE SHOULD RETURN TO PITTSBURGH DID NOT MEAN THAT HE SHOULD RETURN BY DIRECT ROUTE.

"IT HAS ALWAYS BEEN THE PRACTICE OF THIS OFFICE TO HAVE TRAVEL PERFORMED IN THE MOST REASONABLE MANNER. IN THIS PARTICULAR INSTANCE HOWEVER, MR. GILBERT'S ITINERARY DID NOT INDICATE THAT HE WOULD RETURN DIRECTLY TO PITTSBURGH WHEN HE PURCHASED HIS TRANSPORTATION TO HUNTINGTON, WEST VA. IN VIEW OF THE FACT THAT HE DID NOT HAVE DEFINITE INFORMATION AS TO HIS RETURN, IT WAS HIS OPINION AND WE BELIEVE HE USED PROPER JUDGMENT, TO BUY A ONE-WAY TICKET BECAUSE OF THE FACT THAT THE SAVINGS IN THIS CASE WOULD HAVE BEEN VERY SMALL. HAD IT DEVELOPED THAT HE WOULD NOT RETURN DIRECTLY TO PITTSBURGH THE COST OF OBTAINING A REFUND ON A ROUND TRIP TICKET WOULD, IN ALL PROBABILITY, HAVE EXCEEDED THE POSSIBLE SAVINGS."

IT MAY BE STATED, A A GENERAL RULE, THAT CONTRACTORS AND SUBCONTRACTORS OPERATING UNDER COST-PLUS-A-FIXED-FEE CONTRACTS ARE EXPECTED AND REQUIRED TO EXERCISE THE SAME DEGREE OF CARE IN INCURRING EXPENSES FOR WHICH REIMBURSEMENT IS CLAIMED AS A PRUDENT PERSON WOULD EXERCISE IN THE CONDUCT OF HIS PERSONAL BUSINESS AND THAT, SO FAR AS CONCERNS TRAVELING EXPENSES, ROUND TRIP TICKETS SHOULD BE OBTAINED WHEREVER PRACTICABLE AND ECONOMICAL TO DO SO. HOWEVER, IN THE INSTANT CASE, IN VIEW OF THE STATED UNCERTAINTY OF THE ITINERARY TO BE FOLLOWED, AS CONFIRMED BY THE TRAVEL AUTHORIZATION HERE INVOLVED WHICH DESCRIBES THE SAID ITINERARY "TO BE FROM PITTSBURGH, PENNSYLVANIA AND RADIUS OF 200 MILES TO HUNTINGTON, WEST VIRGINIA AND RETURN TO PITTSBURGH, PENNSYLVANIA AND RADIUS OF 200 MILES", THE JUDGMENT EXERCISED BY THE TRAVELER IN PURCHASING A ONE-WAY TICKET DOES NOT APPEAR TO BE SO UNREASONABLE AS TO REQUIRE THIS OFFICE TO LIMIT REIMBURSEMENT TO THE COST OF A ROUND-TRIP TICKET BETWEEN THE POINTS INVOLVED.

SO FAR AS CONCERNS THE ITEM OF EXPENSE FOR "TAXICAB FARES BETWEEN PLACE OF LODGING AND FIRST POST OF DUTY AND RETURN TO PLACE OF LODGING", WHILE, AS STATED BY YOU, IT WAS HELD IN MY DECISION OF DECEMBER 26, 1941, B- 22270, THAT SUCH EXPENSES WOULD ORDINARILY BE COVERED BY THE PER DIEM ALLOWANCE SPECIFIED IN THE CONTRACT IN LIEU OF ALL OTHER EXPENSES, ATTENTION WAS INVITED THEREIN TO CERTAIN GENERALLY RECOGNIZED EXCEPTIONS, AS SET FORTH IN THE STANDARDIZED GOVERNMENT TRAVEL REGULATIONS, PARAGRAPH 8(B), UNDER WHICH SUCH TRAVEL WILL BE CONSIDERED AS NECESSARY TRANSPORTATION NOT INCIDENTAL TO SUBSISTENCE. IT WOULD APPEAR THAT THE TRAVEL HERE INVOLVED IS WITHIN THE PURVIEW OF SUCH EXCEPTIONS, AS BEING NECESSITATED BY THE NATURE OF THE WORK UPON WHICH THE TRAVELER WAS ENGAGED, AND IS COMPARABLE TO THAT PERFORMED BY GOVERNMENT EMPLOYEES IN THE DISCHARGE OF SOME DESIGNATED OFFICIAL DUTY, THE COST OF WHICH MAY BE REIMBURSED EVEN THOUGH SUCH TRAVEL IS CONFINED WITHIN THE CORPORATE LIMITS OF THEIR OFFICIAL STATIONS.

ACCORDINGLY, THE VOUCHER, TOGETHER WITH ACCOMPANYING PAPERS, IS RETURNED AND YOU ARE ADVISED THAT PAYMENT THEREON IS AUTHORIZED, IF OTHERWISE CORRECT.