B-27019, JUL 13, 1942

B-27019, JUL 13, 1942

PRECIS-UNAVAILABLE

COLONEL JOHN L. SCOTT, F.D., U.S. ARMY:

C/O HEADQUARTERS, SERVICES OF SUPPLY, FISCAL DIVISION,

WAR DEPARTMENT

I HAVE, BY REFERENCE FROM HEADQUARTERS, SERVICES OF SUPPLY, FISCAL DIVISION, YOUR LETTER OF MAY 7, 1942, TO THE CHIEF OF FINANCE (YOUR FILE 158) AS FOLLOWS:

"1. THERE IS INCLOSED A REQUEST FOR ADVANCE DECISION OF THE COMPTROLLER GENERAL OF THE UNITED STATES AS TO THE PROPRIETY OF MAKING A PAYMENT IN REIMBURSEMENT TO THE HUNKIN-CONKEY CONSTRUCTION COMPANY FOR WORK PERFORMED BY THE SUB-CONTRACTOR.

"2. THIS VOUCHER COVERS REIMBURSEMENT OF OVERTIME WORK UNDER SUB CONTRACTS 61, 106 AND 230, ENTERED INTO BY THE PRIME CONTRACTOR AND THE SPOHN HEATING AND VENTILATING COMPANY, WHICH SUB-CONTRACTOR, IN TURN, SUBLET PART OF THE WORK. COPIES OF THE ABOVE PRIME CONTRACT AND SUB CONTRACTS ARE ON FILE IN THE GENERAL ACCOUNTING OFFICE. ARTICLE IV OF THESE SUB-CONTRACTS READS AS FOLLOWS:

"'NEITHER THIS SUB-CONTRACT NOR ANY INTEREST THEREIN SHALL BE ASSIGNED OR TRANSFERRED, EXCEPT THAT THE WHOLE OR ANY PART IS ASSIGNABLE TO THE GOVERNMENT; AND NO PART OF THIS CONTRACT SHALL BE SUBLET EXCEPT (1) UNDER UNUSUAL CIRCUMSTANCES, (2) UPON A FIXED PRICE BASIS, AND (3) WITH THE EXPRESS WRITTEN APPROVAL OF THE CONTRACTING OFFICER WHO EXECUTED THE PRINCIPAL CONTRACT, OR HIS DULY AUTHORIZED REPRESENTATIVE.'

"3. IT IS THE OPINION OF THIS OFFICE THAT NO UNUSUAL CIRCUMSTANCES HAVE BEEN STATED, AND THAT THE SUB-LETTING OF THIS WORK HAS NOT BEEN JUSTIFIED. ALSO, IN THE EVENT IT WAS NECESSARY TO SUB-LET PART OF THE WORK, IT SHOULD HAVE BEEN ON FIXED PRICE BASIS, AND PAYMENT OF OVERTIME SHOULD NOT HAVE BEEN ALLOWED."

SUBCONTRACTS NOS. 61, 106, AND 230, REFERRED TO IN YOUR LETTER, WERE ENTERED INTO BETWEEN THE HUNKIN-CONKEY CONSTRUCTION COMPANY, THE PRIME CONTRACTOR UNDER CONTRACT NO. W-6934-QM-2, DATED AUGUST 30, 1940, FOR THE CONSTRUCTION OF THE RAVENNA ORDNANCE PLANT, RAVENNA, OHIO, AND THE SPOHN HEATING AND VENTILATING COMPANY, FOR THE INSTALLATION OF CERTAIN HEATING AND PLUMBING WORK AT SAID PLANT. WITH RESPECT TO SUBCONTRACTS, ARTICLE V OF CONTRACT NO. W-6934-QM-2, SUPRA, PROVIDES, IN PERTINENT PART, AS FOLLOWS:

"1. THE CONTRACTOR HEREBY AGREES THAT HE WILL:

"(D) ENTER INTO NO SUBCONTRACT FOR ANY PORTION OF THE WORK, EXCEPT IN THE FORM PRESCRIBED BY THE SECRETARY OF WAR, NOR WITHOUT THE WRITTEN APPROVAL OF THE CONTRACTING OFFICER. SUBCONTRACTS ARE DEFINED AS CONTRACTS ENTERED INTO BY THE CONTRACTOR WITH OTHERS WHICH INVOLVE THE PERFORMANCE, WHOLLY OR IN PART AT THE SITE OF THE WORK, OF SOME PART OF THE WORK DESCRIBED IN ARTICLE I HEREOF."

PURSUANT TO THE FOREGOING PROVISION, SUBCONTRACTS NOS. 61, 106, AND 230 WERE EXECUTED IN THE PRESCRIBED FORM. ARTICLE 4 THEREOF, RELATING TO SUBLETTING OF WORK THEREUNDER, IS QUOTED IN YOUR LETTER ABOVE. ALSO, IT APPEARS THAT CERTAIN WORK INCLUDED IN THESE SUBCONTRACTS WAS SUBLET BY THE SPOHN HEATING AND VENTILATING COMPANY WITH THE EXPRESS APPROVAL OF THE CONTRACTING OFFICER'S REPRESENTATIVE. YOU INDICATE THAT THE WORK WAS NOT SUBLET ON A FIXED PRICE BASIS AS AGREED, AND STATE THAT IN YOUR OPINION THERE HAVE BEEN STATED NO UNUSUAL CIRCUMSTANCES JUSTIFYING THE ACTION TAKEN.

WITH RESPECT TO THE CIRCUMSTANCES GIVING RISE TO THE SUBLETTING OF WORK UNDER SUBCONTRACTS NOS. 61, 106, AND 230, SUPRA, THE HUNKIN-CONKEY CONSTRUCTION COMPANY, BY LETTERS DATED APRIL 23, APRIL 24 AND APRIL 28, 1942, COPIES OF WHICH ARE ATTACHED TO THE VOUCHER SUBMITTED, ADVISED THE AREA ENGINEER, RAVENNA ORDNANCE PLANT, RAVENNA, OHIO, THAT AT THE TIME SAID SUBCONTRACTS WERE ENTERED INTO IT WAS UNDERSTOOD AND AGREED THAT CERTAIN PHASES OF THE WORK COVERED THEREBY WOULD BE SUBLET BY THE SPOHN HEATING AND VENTILATING COMPANY.

MOREOVER, THE CONTRACTING OFFICER'S REPRESENTATIVE IN EACH INSTANCE EXPRESSLY APPROVED IN WRITING THE SUBLETTING OF THE WORK HERE INVOLVED. THEREFORE, IT IS APPARENT THAT SUCH ACTION WAS CONTEMPLATED BY THE PARTIES WHEN THE CONTRACT WAS MADE, AND WAS WITHIN THE TERMS OF THE CONTRACT. VIEW THEREOF, THE CIRCUMSTANCES UNDER WHICH SAID WORK WAS SUBLET NEED NOT BE QUESTIONED FURTHER.

AS SUGGESTED IN YOUR LETTER, SUPRA, IN VIEW OF THE EXPRESS REQUIREMENT IN SUBCONTRACTS NOS. 61, 106, AND 230, THAT NO PART THEREOF SHOULD BE SUBLET EXCEPT ON A FIXED PRICE BASIS, THERE IS NO LEGAL BASIS FOR PAYMENT OF THE AMOUNT CLAIMED ON ACCOUNT OF WORK PERFORMED BY OTHER PARTIES FOR THE SPOHN HEATING AND VENTILATING COMPANY IN CONNECTION WITH SAID SUBCONTRACTS, UNLESS THE WORK WAS SUBLET FOR FIXED PRICES AS AGREED. MOREOVER, IN THE EVENT THE WORK IN FACT WAS SUBLET ON A FIXED PRICE BASIS, IT MUST BE SHOWN, ALSO, THAT THE OVERTIME WORK WAS FOR THE SOLE BENEFIT OF THE GOVERNMENT AND WAS NOT DUE TO THE FAULT OR NEGLIGENCE OF THE SUBCONTRACTOR OR OF THE PARTIES TO WHICH THE WORK WAS SUBLET, AND THAT THE SUBCONTRACTOR OTHERWISE COULD NOT HAVE REQUIRED PERFORMANCE OF THE SAME BY ITS SUPPLIERS WITHOUT PAYMENT IN ADDITION TO THE FIXED PRICES.

IT APPEARS THAT THE OVERTIME SERVICES HERE INVOLVED WERE PERFORMED AT THE REQUEST OF THE CONTRACTING OFFICER'S REPRESENTATIVE FOR THE SOLE BENEFIT OF THE GOVERNMENT, AND WERE IN NO MANNER ATTRIBUTABLE TO THE FAULT OR NEGLIGENCE OF THE SUBCONTRACTOR OR ITS SUPPLIERS. COPIES OF THE PRIME CONTRACTOR'S LETTERS SPECIFICALLY SETTING FORTH THESE FACTS, AND BEARING THE APPROVAL OF THE CONTRACTING OFFICER'S REPRESENTATIVE IN EACH INSTANCE, ARE ATTACHED TO THE VOUCHER SUBMITTED. HOWEVER, THERE IS NO SHOWING THAT THE WORK WAS SUBLET UPON THE BASIS OF FIXED PRICES, AS REQUIRED. NOR DOES THE PRESENT RECORD SHOW THE TERMS OF ANY SUCH FIXED PRICE AGREEMENTS AS MAY HAVE BEEN MADE BY THE SUBCONTRACTOR. ACCORDINGLY, IN THE ABSENCE OF A PROPER SHOWING THAT THE WORK WAS SUBLET BY THE SPOHN HEATING AND VENTILATING COMPANY UPON THE BASIS OF FIXED PRICES, AND THAT SAID COMPANY COULD NOT HAVE REQUIRED THE OVERTIME SERVICES FOR WHICH REIMBURSEMENT IS CLAIMED WITHOUT PAYMENT IN ADDITION TO THE FIXED PRICES, PAYMENT ON THE VOUCHER IS NOT AUTHORIZED.

THE VOUCHER AND SUPPORTING PAPERS ARE RETURNED HEREWITH.