B-38565, DECEMBER 8, 1943, 23 COMP. GEN. 412

B-38565: Dec 8, 1943

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CONTRACTS - COST-PLUS - TRANSPORTATION AND MOVING EXPENSES OF EMPLOYEES WHOSE SERVICES ARE TERMINATED WHERE. " AN EMPLOYEE WAS TRANSFERRED BY THE CONTRACTOR FROM ONE PLANT TO ANOTHER UNDER AN AGREEMENT PROVIDING FOR RETURN TRANSPORTATION AND INCIDENTAL EXPENSES OF HIMSELF AND FAMILY UPON TERMINATION OF HIS SERVICES. PROVIDED THE TERMINATION WAS INVOLUNTARY AND WAS NOT DUE TO UNSATISFACTORY SERVICES ON THE PART OF THE EMPLOYEE. JONES ENTERED INTO AN AGREEMENT WITH THE CONTRACTOR PROVIDING FOR THE PAYMENT OF SUCH RETURN TRANSPORTATION AND INCIDENTAL EXPENSES UPON THE TERMINATION OF HIS EMPLOYMENT AND THAT PAYMENT THEREFOR HAS BEEN MADE TO HIM BY THE CONTRACTOR PURSUANT TO THE " PROCEDURE WITH RESPECT TO MOVING AND TRAVELING EXPENSES OF TERMINATED EMPLOYEES WHO HAVE SIGNED TRANSFER AGREEMENTS AUTHORIZING RETURN EXPENSES TO POINT OF ORIGIN.

B-38565, DECEMBER 8, 1943, 23 COMP. GEN. 412

CONTRACTS - COST-PLUS - TRANSPORTATION AND MOVING EXPENSES OF EMPLOYEES WHOSE SERVICES ARE TERMINATED WHERE, UNDER A COST-PLUS-A-FIXED-FEE CONTRACT AUTHORIZING REIMBURSEMENT FOR "TRANSPORTATION AND MOVING EXPENSES ALLOWED TO EMPLOYEES," AN EMPLOYEE WAS TRANSFERRED BY THE CONTRACTOR FROM ONE PLANT TO ANOTHER UNDER AN AGREEMENT PROVIDING FOR RETURN TRANSPORTATION AND INCIDENTAL EXPENSES OF HIMSELF AND FAMILY UPON TERMINATION OF HIS SERVICES, PURSUANT TO THE CONTRACTOR'S REGULARLY ESTABLISHED PROCEDURE, THE CONTRACTOR MAY BE REIMBURSED FOR THE RETURN TRANSPORTATION, ETC., OF SUCH AN EMPLOYEE AND HIS FAMILY, UPON TERMINATION OF HIS SERVICES, PROVIDED THE TERMINATION WAS INVOLUNTARY AND WAS NOT DUE TO UNSATISFACTORY SERVICES ON THE PART OF THE EMPLOYEE.

COMPTROLLER GENERAL WARREN TO COL. GEORGE DOBERT, U.S. ARMY, DECEMBER 8, 1943:

THERE HAS BEEN RECEIVED BY FIRST INDORSEMENT OF NOVEMBER 23, 1943, FROM THE FISCAL DIRECTOR, ARMY SERVICE FORCES, YOUR LETTER OF AUGUST 11, 1943, REQUESTING DECISION WITH RESPECT TO THE PROPRIETY OF EFFECTING REIMBURSEMENT ON UNNUMBERED BUREAU VOUCHER DATED JULY 10, 1943, IN FAVOR OF E. I. DU PONT DE NEMOURS AND COMPANY, IN THE AMOUNT OF $268.75, REPRESENTING AN ALLOWANCE PAID TO RAYMOND L. JONES FOR THE RETURN TRANSPORTATION, AND EXPENSES INCIDENT THERETO, OF HIMSELF AND FAMILY TO CARNEY'S POINT, NEW JERSEY, UPON THE TERMINATION OF HIS SERVICES AS AN EMPLOYEE UNDER CONTRACT W-ORD-458, DATED JULY 17, 1940, COVERING THE CONSTRUCTION, EQUIPMENT AND OPERATION OF THE INDIANA ORDNANCE WORKS AT CHARLESTOWN, INDIANA.

THE RECORD SHOWS THAT UNDER DATE OF SEPTEMBER 12, 1941, MR. JONES ENTERED INTO AN AGREEMENT WITH THE CONTRACTOR PROVIDING FOR THE PAYMENT OF SUCH RETURN TRANSPORTATION AND INCIDENTAL EXPENSES UPON THE TERMINATION OF HIS EMPLOYMENT AND THAT PAYMENT THEREFOR HAS BEEN MADE TO HIM BY THE CONTRACTOR PURSUANT TO THE " PROCEDURE WITH RESPECT TO MOVING AND TRAVELING EXPENSES OF TERMINATED EMPLOYEES WHO HAVE SIGNED TRANSFER AGREEMENTS AUTHORIZING RETURN EXPENSES TO POINT OF ORIGIN," ISSUED AT THE INDIANA ORDNANCE WORKS MAY 22, 1943, AND APPROVED BY THE CONTRACTING OFFICER MAY 25, 1943. HOWEVER, YOUR LETTER INDICATES THAT YOUR DOUBT AS TO THE LEGALITY OF THE PROPOSED REIMBURSEMENT ARISES BY REASON OF THE FACT THAT YOU QUESTION THE APPLICABILITY THERETO OF PARAGRAPH (C), ARTICLE VI, OF THE CONTRACT WHICH PROVIDES AS FOLLOWS:

(C) IT IS RECOGNIZED THAT UNDER THE CONTRACTOR'S GENERAL WELFARE PLANS FOR ITS EMPLOYEES AND UNDER ITS PRACTICE AT OTHER PLANTS OF ACTING AS A SELF-INSURER UNDER WORKMEN'S COMPENSATION LAWS, THE CONTRACTOR CUSTOMARILY PAYS BENEFITS AND RENDERS SERVICES BEYOND THOSE TO WHICH THE EMPLOYEE IS ENTITLED AS A MATTER OF LAW OR UNDER THE TERMS OF EMPLOYER'S LIABILITY INSURANCE POLICIES. IN ORDER THAT THE EMPLOYEES AT THE PLANT TO BE CONSTRUCTED AND OPERATED HEREUNDER SHALL RECEIVE TREATMENT AS FAVORABLE AS THAT ACCORDED TO EMPLOYEES OF THE CONTRACTOR AT OTHER PLANTS, IT IS RECOGNIZED THAT SUCH BENEFITS AND THE COST OF SUCH SERVICES RENDERED TO EMPLOYEES AT THIS PLANT SHALL BE TREATED AS PART OF THE COST OF CONSTRUCTION AND OPERATION HEREUNDER.

NOT ONLY IS ARTICLE VI OF THE CONTRACT ENTITLED " OWNERSHIP AND INSURANCE," BUT IT READILY IS SEEN THAT THE ABOVE-QUOTED PROVISIONS OF PARAGRAPH (C) THEREOF HAVE SPECIFIC REFERENCE ONLY TO THE CONTRACTOR'S PRACTICE OF ACTING AS SELF-INSURER UNDER WORKMEN'S COMPENSATION LAWS AND TO ITS CUSTOM OF PAYING BENEFITS AND RENDERING SERVICES BEYOND THOSE TO WHICH ITS EMPLOYEES WOULD BE ENTITLED AS A MATTER OF LAW UNDER EMPLOYER'S LIABILITY INSURANCE POLICIES. HENCE, IT DOES NOT APPEAR THAT THE SAID PROVISIONS CAN HAVE ANY BEARING WHATEVER ON THE QUESTION AS TO WHETHER THE EXPENSES COVERED BY THE VOUCHER ARE ALLOWABLE ITEMS OF COST UNDER THE CONTRACT. RATHER IT APPEARS THAT SUCH QUESTION MUST BE DETERMINED ON THE BASIS OF THE PERTINENT PROVISIONS OF ARTICLE IV OF THE CONTRACT ENTITLED , COSTS AND EXPENSES," WHICH ARE AS FOLLOWS:

(A) THE GOVERNMENT SHALL BEAR ALL COSTS AND EXPENSES OF EVERY CHARACTER AND DESCRIPTION INCURRED BY THE CONTRACTOR IN CONNECTION WITH THE CONSTRUCTION AND OPERATION (INCLUDING EQUIPMENT, ALTERATION, MAINTENANCE, AND CLOSING-DOWN) OF THE PLANT OR ANY PART THEREOF, AS OUTLINED BELOW:

(1) ALL COSTS AND EXPENSES DIRECTLY ATTRIBUTABLE TO THE WORK HEREUNDER INCLUDING (BUT NOT LIMITED TO) ACQUISITION OF LAND, DESIGN, ENGINEERING, MATERIALS, APPARATUS AND EQUIPMENT, POWER, DIRECT SUPERVISION, ACCOUNTING (INCLUDING SALARIES AND OTHER EXPENSES IN CONNECTION WITH AUDITS OF ACCOUNTS FOR THE GOVERNMENT DURING AND AFTER THE PERIOD OF THE CONTRACT), GENERAL WORKS EXPENSE, SALARIES, WAGES AND EXTRA COMPENSATION TO EMPLOYEES, CHARGES UNDER AND A PROPORTIONATE SHARE OF THE COST OF ALL WELFARE AND OTHER EMPLOYEE RELATIONS PLANS MAINTAINED BY THE CONTRACTOR, ROYALTIES, FREIGHT, PACKAGING, STORAGE, MAINTENANCE OF GUARDS AND FIRE PROTECTION FORCE, TRACING AND URGING MATERIALS, TAXES (OTHER THAN TAXES ON THE CONTRACTOR'S COMPENSATION HEREUNDER), REWORKING OF ANY POWDER, REPAIRS, REPLACEMENTS NECESSITATED BY THE LOSS OR DAMAGE TO THE PLANT OR ANY PART THEREOF, EXPENSES IN CONNECTION WITH ANY TEMPORARY OR PERMANENT CLOSING-DOWN OF THE PLANT, ANY DISCONTINUANCE WAGES AND TRANSPORTATION AND MOVING EXPENSES ALLOWED TO EMPLOYEES, AND PREMIUMS ON SUCH BONDS AS MAY BE REQUIRED. IN THE PAYMENT OF EXTRA COMPENSATION, AND IN THE MAKING OF EXPENDITURES PURSUANT TO OR IN THE MAINTENANCE OF WELFARE OR OTHER PLANS FOR THE BENEFIT OF EMPLOYEES, THE GOVERNMENT SHALL BE CHARGEABLE THEREFOR INSOFAR AS THE SAME ARE CONSISTENT WITH THE CONTRACTOR'S GENERAL EMPLOYEE RELATIONS POLICIES THROUGHOUT ITS ORGANIZATION, ARE INCURRED PURSUANT TO AGREEMENT MADE AS A RESULT OF COLLECTIVE BARGAINING WITH REPRESENTATIVES OF EMPLOYEES, OR ARE EXPRESSLY AUTHORIZED IN WRITING BY THE REPRESENTATIVES OF THE CONTRACTING OFFICER; IT BEING INTENDED THAT THE EMPLOYEES AT SAID PLANT SHALL BE TREATED NO LESS FAVORABLY THAN EMPLOYEES AT OTHER PLANTS OF THE CONTRACTOR.

IN THIS CONNECTION IT WILL BE NOTED FROM SEVENTH INDORSEMENT DATED OCTOBER 11, 1943, THAT THE CONTRACTING OFFICER'S REPRESENTATIVE HAS APPROVED THE VOUCHER FOR PAYMENT UNDER THE LATTER PROVISIONS OF THE CONTRACT. FURTHERMORE, THE OFFICE OF THE CHIEF OF ORDNANCE, BY NINTH INDORSEMENT DATED OCTOBER 20, 1943, HAD EXPRESSED THE FOLLOWING OPINION RELATIVE TO THE MATTER:

2. IT APPEARS FROM LETTER, DATED 11 AUGUST 1943, FROM THE FINANCE OFFICER TO THE COMPTROLLER GENERAL OF THE UNITED STATES THAT HE CONSIDERS THE EXPENDITURE AS FALLING UNDER THE PROVISIONS OF ARTICLE VI, PARAGRAPH (C) OF THE CONTRACT. THIS OFFICE DOES NOT AGREE WITH THIS OPINION SINCE ARTICLE VI REFERS TO " OWNERSHIP AND INSURANCE.'

3. THE PROPER ARTICLE FOR CONSIDERATION IS ARTICLE IV (A) OF THE CONTRACT, WHICH PROVIDES FOR REIMBURSEMENT TO THE CONTRACTOR FOR ALL COSTS AND EXPENSES DIRECTLY ATTRIBUTABLE TO THE WORK UNDER THE CONTRACT, INCLUDING (BUT NOT LIMITED TO) "TRANSPORTATION AND MOVING EXPENSES ALLOWED TO EMPLOYEES.' ON 12 SEPTEMBER 1941 THE CONTRACTOR ENTERED INTO AN EMPLOYMENT AGREEMENT WITH RAYMOND L. JONES. THE AGREEMENT IN ST PARAGRAPH PROVIDES THAT THE EMPLOYEE WILL BE REIMBURSED FOR COST OF TRANSPORTATION OF HIMSELF, HIS FAMILY AND HOUSEHOLD EFFECTS FROM CARNEY'S POINT, N.J. TO CHARLESTOWN, INDIANA, AND AT THE END OF EMPLOYMENT FROM CHARLESTOWN BACK TO CARNEY'S POINT, AND LIVING EXPENSES IN OBTAINING A NEW PLACE OF RESIDENCE AT THE END OF HIS EMPLOYMENT AT CHARLESTOWN. THE CONTRACTOR IN," PROCEDURE WITH RESPECT TO MOVING AND TRAVELING EXPENSES OF TERMINATED EMPLOYEES WHO HAVE SIGNED TRANSFER AGREEMENTS AUTHORIZING RETURN EXPENSES TO POINT OF ORIGIN," DATED 22 MAY 1943 (APPROVED BY THE CONTRACTING OFFICER'S REPRESENTATIVE ON 25 MAY 1943) SETS FORTH THE PROCEDURE TO BE FOLLOWED WITH RESPECT TO TRAVELING EXPENSES OF TERMINATED EMPLOYEES. THE PROCEDURE IN PARAGRAPH 6 (B) PROVIDES THAT MARRIED EMPLOYEES WHO TRAVEL BY AUTOMOBILE WILL BE ALLOWED .05 CENTS PER MILE AND $6.00 PER DAY SUBSISTENCE FOR THE EMPLOYEE AND EACH MEMBER OF HIS FAMILY IN LIEU OF ALL OTHER EXPENSES WHILE EN ROUTE, EXCEPT THAT MEMBERS OF THE EMPLOYEE'S FAMILY UNDER TWELVE YEARS OF AGE THE SUBSISTENCE ALLOWANCE WILL BE $3.00 INSTEAD OF $6.00 PER DAY. THE PARAGRAPH ALSO PROVIDES FOR AN ALLOWANCE AT THE SAME RATE PER DAY AFTER ARRIVAL AT DESTINATION FOR THE NUMBER OF DAYS CALLED FOR IN THE TRANSFER AGREEMENT(FIFTEEN DAYS IN THE INSTANT CASE).

4. IN VIEW OF THE FACT THAT THE CONTRACTOR HAS PAID THE EMPLOYEE IN ACCORDANCE WITH THE EMPLOYMENT AGREEMENT AND PROCEDURE TO BE FOLLOWED WHEN AN EMPLOYEE IS TERMINATED, AND DUE TO THE FACT THAT THE CONTRACT SPECIFICALLY PROVIDES FOR REIMBURSEMENT FOR SUCH EXPENDITURES, THIS OFFICE RECOMMENDS THAT THE VOUCHER BE PLACED IN LINE FOR PAYMENT WITHOUT REFERENCE TO THE COMPTROLLER GENERAL FOR AN ADVANCE DECISION.

WHILE IT IS NOT SPECIFICALLY SO INDICATED IN THE RECORD, IT IS PRESUMED THAT THE CONTRACTOR'S " PROCEDURE" HERE INVOLVED IS SUBSTANTIALLY THE SAME PROCEDURE APPLIED THROUGHOUT ITS ENTIRE ORGANIZATION WITHIN THE MEANING OF PARAGRAPH (A) (1), ARTICLE IV, SUPRA, WHICH, IN EFFECT, AUTHORIZES REIMBURSEMENT OF SUCH TRANSPORTATION AND MOVING EXPENSES AS NORMALLY ARE PAID BY THE CONTRACTOR PURSUANT TO ITS REGULARLY FORMULATED WELFARE OR OTHER PLANS FOR THE BENEFIT OF ITS EMPLOYEES. LIKEWISE, SINCE, BY THE TERMS OF HIS AGREEMENT OF SEPTEMBER 12, 1941, ENTERED INTO PURSUANT TO THE SAID " PROCEDURE," MR. JONES WOULD NOT BE ENTITLED TO PAYMENT OF SUCH EXPENSES IN THE EVENT HE VOLUNTARILY TERMINATED HIS EMPLOYMENT OR WAS DISCHARGED FOR CAUSE, IT IS PRESUMED THAT MR. JONES' TRANSFER WAS INVOLUNTARY AND WAS NOT DUE TO UNSATISFACTORY SERVICES ON HIS PART. SUCH BE THE CASE, IT SEEMS CLEARLY EVIDENT FROM THE FOREGOING THAT THE EXPENDITURES INVOLVED PROPERLY MAY BE REIMBURSED THE CONTRACTOR AS PROVIDED BY PARAGRAPH (A) (1), ARTICLE IV, AND IT FOLLOWS THAT THIS OFFICE WOULD NOT BE REQUIRED TO OBJECT TO OTHERWISE PROPER PAYMENT ON THE VOUCHER. SEE 22 COMP. GEN. 82.