B-43346, JUNE 23, 1945, 24 COMP. GEN. 921

B-43346: Jun 23, 1945

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CONTRACTS - COST-PLUS - EXPENSES OF MOVING FAMILIES OF TRANSFERRED EMPLOYEES WHERE A PARTICULAR EXPENDITURE IN CONNECTION WITH THE TRANSPORTATION OF THE FAMILY OF A TRANSFERRED EMPLOYEE OF A COST-PLUS-A-FIXED-FEE CONTRACTOR IS NOT WITHIN THE PURVIEW OF THE SPECIFIC CONTRACT PROVISION AUTHORIZING REIMBURSEMENT OF COSTS AND EXPENSES INCURRED BY TRANSFERRED EMPLOYEES ON ACCOUNT OF TRANSPORTATION OF THEIR FAMILIES. EVEN THOUGH PAYMENT TO THE EMPLOYEE MAY HAVE BEEN IN ACCORDANCE WITH THE CONTRACTOR'S GENERAL PRACTICE: UNDER A COST-PLUS-A-FIXED-FEE CONTRACT PROVIDING FOR REIMBURSING THE CONTRACTOR FOR COSTS AND EXPENSES REIMBURSED TO TRANSFERRED EMPLOYEES ON ACCOUNT OF TRANSPORTATION OF THEIR FAMILIES.

B-43346, JUNE 23, 1945, 24 COMP. GEN. 921

CONTRACTS - COST-PLUS - EXPENSES OF MOVING FAMILIES OF TRANSFERRED EMPLOYEES WHERE A PARTICULAR EXPENDITURE IN CONNECTION WITH THE TRANSPORTATION OF THE FAMILY OF A TRANSFERRED EMPLOYEE OF A COST-PLUS-A-FIXED-FEE CONTRACTOR IS NOT WITHIN THE PURVIEW OF THE SPECIFIC CONTRACT PROVISION AUTHORIZING REIMBURSEMENT OF COSTS AND EXPENSES INCURRED BY TRANSFERRED EMPLOYEES ON ACCOUNT OF TRANSPORTATION OF THEIR FAMILIES, SUCH EXPENDITURE MAY NOT BE CONSIDERED AS REIMBURSABLE TO THE CONTRACTOR UNDER THE GENERAL TERMS OF THE CONTRACT PROVISION AUTHORIZING REIMBURSEMENT OF CHARGES PURSUANT TO THE CONTRACTOR'S EMPLOYEE RELATIONS POLICIES, EVEN THOUGH PAYMENT TO THE EMPLOYEE MAY HAVE BEEN IN ACCORDANCE WITH THE CONTRACTOR'S GENERAL PRACTICE: UNDER A COST-PLUS-A-FIXED-FEE CONTRACT PROVIDING FOR REIMBURSING THE CONTRACTOR FOR COSTS AND EXPENSES REIMBURSED TO TRANSFERRED EMPLOYEES ON ACCOUNT OF TRANSPORTATION OF THEIR FAMILIES, A DISTANT RELATIVE WHO ACCOMPANIED A TRANSFERRED EMPLOYEE'S FAMILY IN THE CAPACITY OF A GOVERNESS MAY NOT BE REGARDED AS A BONA FIDE MEMBER OF THE IMMEDIATE FAMILY, AS REQUIRED UNDER A FAIR AND REASONABLE CONSTRUCTION OF THE CONTRACT, SO AS TO ENTITLE THE CONTRACTOR TO REIMBURSEMENT OF TRAVELING EXPENSES PAID ON ACCOUNT OF SUCH PERSON. THE TRAVELING EXPENSES OF A NURSE ENGAGED TO ACCOMPANY THE FAMILY OF A TRANSFERRED EMPLOYEE OF A COST-PLUS-A-FIXED-FEE CONTRACTOR MAY NOT BE REIMBURSED UNDER A CONTRACT PROVIDING FOR REIMBURSEMENT TO THE CONTRACTOR FOR COSTS AND EXPENSES REIMBURSED TO TRANSFERRED EMPLOYEES ON ACCOUNT OF TRANSPORTATION OF THEIR FAMILIES.

COMPTROLLER GENERAL WARREN TO COL. W. B. MILLER, U.S. ARMY, JUNE 23, 1945:

THERE HAS BEEN RECEIVED BY REFERENCE FROM THE FISCAL DIRECTOR, HEADQUARTERS, ARMY SERVICE FORCES, YOUR LETTER OF APRIL 27, 1945, REQUESTING A DECISION AS TO WHETHER YOU ARE AUTHORIZED TO MAKE PAYMENT ON RECLAIM BUREAU VOUCHER 3694 STATED IN FAVOR OF E. I. DU PONT DE NEMOURS AND COMPANY UNDER COST-PLUS-A-FIXED-FEE CONTRACT NO. W-ORD-521 DA-W-ORD-8 DATED SEPTEMBER 11, 1941, IN THE AMOUNT OF $203.80, REPRESENTING THE COST OF TRAVELING EXPENSES OF A NURSE AND GOVERNESS WHO ACCOMPANIED EMPLOYEES BEING TRANSFERRED TO THE PROJECT SITE.

THE SAID AMOUNT WAS DEDUCTED ON D.O. VOUCHER 21180 IN YOUR NOVEMBER, 1944 ACCOUNT AS A RESULT OF AN EXCEPTION WHICH HAD BEEN TAKEN ON D.O. VOUCHER 52565 IN YOUR DECEMBER, 1943 ACCOUNT BY THE AUDIT DIVISION OF THE GENERAL ACCOUNTING OFFICE FOR THE REASON THAT THE NURSE AND GOVERNESS WERE NOT MEMBERS OF THE IMMEDIATE FAMILIES OF THE TRANSFERRED EMPLOYEES.

IN A LETTER DATED MARCH 24, 1945, ATTACHED TO THE VOUCHER, THE CONTRACTOR HAS SUBMITTED THE FOLLOWING PERTINENT STATEMENT IN SUPPORT OF THE CLAIM:

THE AMOUNTS IN QUESTION REPRESENT PORTIONS OF THE EXPENDITURES INCURRED BY DR. W. A. DEW AND T. W. CUMMINS, JR., EMPLOYEES TRANSFERRED BY THE COMPANY TO OKLAHOMA ORDNANCE WORKS. AS SET FORTH IN OUR LETTER OF MARCH 14, 1944, DR. DEW'S WIFE WAS NOT IN GOOD HEALTH AT THE TIME OF HIS TRANSFER AND DR. DEW HIMSELF HAD BEEN SERIOUSLY ILL NOT LONG PRIOR THERETO. A DISTANT RELATIVE HAD LIVED WITH THEM AND HAD ACTED AS GOVERNESS FOR THEIR CHILDREN. WHEN DR. DEW WAS TRANSFERRED TO OKLAHOMA IT WAS DEEMED APPROPRIATE THAT THIS RELATIVE GO WITH HIM, CONTINUING TO BE A MEMBER OF HIS HOUSEHOLD AND TO ASSIST IN CARING FOR THE CHILDREN AT HIS NEW LOCATION. THE PORTION OF DR. DEW'S EXPENSES WHICH IS QUESTIONED RELATES TO THE TRANSPORTATION OF THIS RELATIVE.

WITH RESPECT TO MR. CUMMINS, THE EXPENSES IN QUESTION WERE INCURRED IN CONNECTION WITH THE TRANSPORTATION OF A NURSE WHO ACCOMPANIED MR. AND MRS. CUMMINS ON THE TRIP TO OKLAHOMA FOR THE PURPOSE OF CARING FOR MRS. CUMMINS, WHO WAS IN POOR HEALTH, AND TWO VERY SMALL CHILDREN.

IN THE CASE OF DR. DEW IT IS BELIEVED THAT THE RELATIVE REFERRED TO, BEING A MEMBER OF HIS HOUSEHOLD, CONSTITUTED A MEMBER OF HIS FAMILY WITHIN THE MEANING OF THAT TERM AS USED IN PARAGRAPH D. OF SECTION 1 OF ARTICLE V -A OF CONTRACT NO. W-ORD-521, DA-W-ORD-8, AS AMENDED, AND THAT THE EXPENDITURE MADE IN CONNECTION WITH HER TRANSPORTATION IS REIMBURSABLE THEREUNDER. IF THERE IS ANY DOUBT ABOUT THE MATTER, HOWEVER, WE BELIEVE THAT THE REIMBURSABILITY OF THE EXPENDITURE IS ESTABLISHED BY REFERENCE TO PARAGRAPH M, OF SECTION 1 OF ARTICLE V-A OF SAID CONTRACT AS AMENDED, WHICH PROVIDES THAT THE CONTRACTOR IS TO BE REIMBURSED FOR:

"M. EXTRA COMPENSATION TO EMPLOYEES (EXCLUDING EXTRA COMPENSATION UNDER THE CONTRACTOR'S BONUS PLAN), DISCONTINUANCE WAGES AND CHARGES UNDER WELFARE AND OTHER EMPLOYEE RELATIONS POLICIES MAINTAINED BY THE CONTRACTOR; PROVIDED THAT THE GOVERNMENT SHALL BE CHARGEABLE THEREFOR ONLY INSOFAR AS THE SAME ARE CONSISTENT WITH THE GENERAL EMPLOYEE RELATIONS POLICIES EXISTING THROUGHOUT THE CONTRACTOR'S ORGANIZATION, OR ARE INCURRED PURSUANT TO AGREEMENT MADE AS A RESULT OF COLLECTIVE BARGAINING WITH THE REPRESENTATIVES OF EMPLOYEES, OR ARE EXPRESSLY AUTHORIZED IN WRITING BY THE CONTRACTING OFFICER.' (ITALICS SUPPLIED.)

THE ABOVE QUOTED PROVISIONS, WE SUGGEST, ALSO GOVERN THE EXPENDITURES OF MR. CUMMINS.

IT IS THE GENERAL POLICY OF THE CONTRACTOR TO REIMBURSE EMPLOYEES, TRANSFERRED FROM ONE LOCATION TO ANOTHER IN THE INTEREST OF THE CONTRACTOR'S BUSINESS, FOR ALL REASONABLE EXPENSES INCURRED BY THEM IN CONNECTION WITH SUCH TRANSFER. THE RESPONSIBILITY FOR DETERMINING WHETHER OR NOT PARTICULAR EXPENDITURES ARE REASONABLE RESTS WITH THE REPRESENTATIVE OF THE CONTRACTOR'S MANAGEMENT WHO IS CHARGED WITH THE DUTY OF REVIEWING THE EXPENSE ACCOUNT WHICH THE TRANSFERRED EMPLOYEE IS REQUIRED TO SUBMIT FOR APPROVAL PRIOR TO RECEIVING REIMBURSEMENT. THE REVIEWING OFFICIAL TAKES INTO CONSIDERATION ALL OF THE CIRCUMSTANCES SURROUNDING THE PARTICULAR CASE IN MAKING HIS EXAMINATION OF THE ACCOUNT. THE CIRCUMSTANCES SURROUNDING THE CASES OF DR. DEW AND MR. CUMMINS WERE SUCH THAT THE EXPENDITURES IN QUESTION WERE DEEMED TO BE REASONABLE AND THE CONTRACTOR, THEREFORE, REIMBURSED THE EMPLOYEES FOR THEM.

SINCE THE AMOUNTS IN QUESTION WERE REIMBURSED TO THE EMPLOYEES IN ACCORDANCE WITH THE CONTRACTOR'S GENERAL EMPLOYEE RELATIONS POLICY; AND SINCE THE ABOVE QUOTED LANGUAGE OF THE CONTRACT STATES THAT THE CONTRACTOR IS, IN TURN, TO BE REIMBURSED FOR SUCH EXPENDITURES BY THE GOVERNMENT, IT IS RESPECTFULLY SUBMITTED THAT THE EXCEPTION HERETOFORE TAKEN BY THE GENERAL ACCOUNTING OFFICE SHOULD BE REMOVED AND REIMBURSEMENT TO THE CONTRACTOR APPROVED.

WITH REFERENCE TO THE CONTRACTOR'S CONTENTION THAT THE REIMBURSEMENT OF THE EXPENSES INVOLVED WAS IN ACCORDANCE WITH ITS GENERAL PRACTICE AND, THEREFORE, WAS CONSIDERED AS BEING AUTHORIZED UNDER THE CONTRACT, IT SEEMS CLEAR THAT, WHILE PARAGRAPH M, SECTION 1, ARTICLE V-A, OF THE CONTRACT, PROVIDES IN GENERAL TERMS FOR REIMBURSING THE CONTRACTOR FOR CHARGES PURSUANT TO ITS ,EMPLOYEE RELATIONS POLICIES," THE QUESTION AS TO THE REIMBURSABILITY OF EMPLOYEES' TRANSFER EXPENSES MUST BE DETERMINED ON THE BASIS OF PARAGRAPH D (3) OF THE SAID SECTION WHICH SPECIFICALLY PROVIDES FOR REIMBURSEMENT TO THE CONTRACTOR FOR:

(3) COSTS AND EXPENSES REIMBURSED TO EMPLOYEES OF THE CONTRACTOR TRANSFERRED TO OR FROM THE PLANT ON ACCOUNT OF TRANSPORTATION OF THEMSELVES, THEIR FAMILIES AND THEIR HOUSEHOLD GOODS.

BY ITS TERMS THE CONTRACT THUS EXPRESSLY LIMITS THE TRANSFER EXPENSES WHICH MAY BE REIMBURSED THEREUNDER TO THOSE INCURRED BY THE EMPLOYEES ON ACCOUNT OF THE TRANSPORTATION OF THEMSELVES, THEIR FAMILIES AND THEIR HOUSEHOLD GOODS. THE WORD "FAMILY" HAS BEEN USED TO DESIGNATE MANY AND VARIED TYPES OF RELATIONSHIPS, BUT THE COURTS HAVE HELD THAT IN ITS MOST COMMON SENSE THE WORD IMPLIES FATHER, MOTHER, AND CHILDREN AND IMMEDIATE BLOOD RELATIVES. COLLINS V. NORTHWEST CASUALTY CO., 180 WASH. 347, 39 P.2D 986, 989, 97 A.L.R. 1235; FRANKLIN FIRE INS. CO. V. SHADID, 68 S.W.2D 1030, 1032. HERE, THE RECORD SHOWS THAT THE GOVERNESS WAS MERELY A DISTANT COUSIN OF THE EMPLOYEE WHOM SHE ACCOMPANIED AND IT IS UNDERSTOOD THAT THE NURSE BORE NO RELATIONSHIP WHATEVER TO THE EMPLOYEE WHO ENGAGED HER SERVICES FOR THE TRIP. IT THUS APPEARS THAT IN NEITHER INSTANCE WERE THE SAID INDIVIDUALS BONA FIDE MEMBERS OF THE EMPLOYEES' IMMEDIATE FAMILIES AS REQUIRED UNDER A FAIR AND REASONABLE CONSTRUCTION OF THE CONTRACT.

ACCORDINGLY, AND SINCE IT FURTHER APPEARS THAT THE TRAVELING EXPENSES OF THE GOVERNESS AND NURSE WERE INCURRED PRIMARILY FOR THE PERSONAL CONVENIENCE AND COMFORT OF THE EMPLOYEES AND THEIR FAMILIES, PAYMENT ON THE VOUCHER IS NOT AUTHORIZED.

THE VOUCHER, TOGETHER WITH THE SUPPORTING PAPER SUBMITTED WITH YOUR LETTER, IS RETURNED HEREWITH.