B-77478, AUGUST 17, 1948, 28 COMP. GEN. 97

B-77478: Aug 17, 1948

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OR SERVICES WERE FURNISHED THE GOVERNMENT DURING THE PERIOD COVERED BY THE ACT. IS ALLEGED TO HAVE ARISEN OUT OF ITS PERFORMANCE OF A SUBCONTRACT WITH THE CLINTON CONSTRUCTION COMPANY IN CONNECTION WITH THE CONSTRUCTION OF THE UNITED STATES APPRAISERS STORES AND IMMIGRATION STATION BUILDING AT SAN FRANCISCO. IT IS REPORTED THAT IN THE CONSIDERATION OF SUCH CLAIM IT WAS ASCERTAINED THAT THE HERMAN LAWSON COMPANY AND HERMAN LAWSON AS AN INDIVIDUAL HAD. THE CLAIMANT WAS REQUESTED TO FURNISH A STATEMENT OF THE COST OF PERFORMANCE AND THE PROFIT OR LOSS ON EACH OF THE SEVERAL CONTRACTS INVOLVED. IT IS STATED TO BE THE CONTENTION OF THE CLAIMANT THAT IT WAS NOT THE INTENTION OF THE CONGRESS THAT A CLAIMANT MUST SHOW A NET LOSS ON ALL OF ITS CONTRACTS WITH THE GOVERNMENT BEFORE BEING ELIGIBLE FOR RELIEF UNDER THE PROVISIONS OF THE ACT IN QUESTION.

B-77478, AUGUST 17, 1948, 28 COMP. GEN. 97

CLAIMS - LOSSES OF WAR CONTRACTORS - ACT OF AUGUST 7, 1946 IN ORDER TO BE ELIGIBLE FOR RELIEF UNDER THE PROVISIONS OF THE ACT OF AUGUST 7, 1946, AND EXECUTIVE ORDER NO. 9786, ISSUED PURSUANT THERETO, AUTHORIZING THE SEVERAL DEPARTMENTS AND AGENCIES OF THE GOVERNMENT TO CONSIDER, ADJUST, AND SETTLE CERTAIN EQUITABLE CLAIMS OF WAR CONTRACTORS FOR LOSSES INCURRED UNDER THE CIRCUMSTANCES SET FORTH THEREIN, A CLAIMANT MUST SHOW A NET LOSS ON ALL CONTRACTS AND SUBCONTRACTS UNDER WHICH WORK, SUPPLIES, OR SERVICES WERE FURNISHED THE GOVERNMENT DURING THE PERIOD COVERED BY THE ACT, AND NOT MERELY A LOSS ON A PARTICULAR CONTRACT OR SUBCONTRACT.

COMPTROLLER GENERAL WARREN TO THE ADMINISTRATOR, FEDERAL WORKS AGENCY, AUGUST 17, 1948:

THERE HAS BEEN CONSIDERED YOUR LETTER OF JUNE 14, 1948, RELATIVE TO THE ACTION WHICH PROPERLY MAY BE TAKEN BY YOUR ADMINISTRATION IN CONNECTION WITH THE CLAIM OF THE HERMAN LAWSON COMPANY, FILED PURSUANT TO THE PROVISIONS OF PUBLIC LAW 657, APPROVED AUGUST 7, 1946, 60 STAT. 902, WHICH AUTHORIZED THE SEVERAL DEPARTMENTS AND AGENCIES OF THE GOVERNMENT TO CONSIDER, ADJUST, AND SETTLE CERTAIN EQUITABLE CLAIMS OF WAR CONTRACTORS FOR LOSSES INCURRED UNDER THE CIRCUMSTANCES SET FORTH THEREIN.

THE LOSS OF THE HERMAN LAWSON COMPANY, FOR WHICH CLAIM HAS BEEN FILED WITH YOUR ADMINISTRATION, IS ALLEGED TO HAVE ARISEN OUT OF ITS PERFORMANCE OF A SUBCONTRACT WITH THE CLINTON CONSTRUCTION COMPANY IN CONNECTION WITH THE CONSTRUCTION OF THE UNITED STATES APPRAISERS STORES AND IMMIGRATION STATION BUILDING AT SAN FRANCISCO, CALIFORNIA, UNDER CONTRACT NO. WALPB- 1476 ENTERED INTO WITH THE PUBLIC BUILDINGS ADMINISTRATION DURING JULY, 1940. IT IS REPORTED THAT IN THE CONSIDERATION OF SUCH CLAIM IT WAS ASCERTAINED THAT THE HERMAN LAWSON COMPANY AND HERMAN LAWSON AS AN INDIVIDUAL HAD, DURING THE PERIOD PRESCRIBED BY THE ACT, PERFORMED SEVERAL CONTRACTS WITH THE GOVERNMENT, AND THAT IN THE LIGHT OF THE REQUIREMENTS OF PUBLIC LAW 657 AND EXECUTIVE ORDER 9786, ISSUED PURSUANT THERETO, WHICH PROVIDES THAT RELIEF CANNOT BE GRANTED TO A CLAIMANT THEREUNDER IN EXCESS OF THE NET LOSS ON ALL CONTRACTS AND SUBCONTRACTS ENTERED INTO BY THE CLAIMANT WITH THE GOVERNMENT DURING THE PRESCRIBED PERIOD, THE CLAIMANT WAS REQUESTED TO FURNISH A STATEMENT OF THE COST OF PERFORMANCE AND THE PROFIT OR LOSS ON EACH OF THE SEVERAL CONTRACTS INVOLVED. HOWEVER, IT IS STATED TO BE THE CONTENTION OF THE CLAIMANT THAT IT WAS NOT THE INTENTION OF THE CONGRESS THAT A CLAIMANT MUST SHOW A NET LOSS ON ALL OF ITS CONTRACTS WITH THE GOVERNMENT BEFORE BEING ELIGIBLE FOR RELIEF UNDER THE PROVISIONS OF THE ACT IN QUESTION, AND THAT CONSIDERATION SHOULD BE GIVEN TO THE LOSS INVOLVED IN ANY PARTICULAR CONTRACT WITH THE GOVERNMENT WITHOUT TAKING INTO CONSIDERATION OTHER CONTRACTS BETWEEN THE PARTIES. YOU REQUEST A DECISION AS TO THE PROPER INTERPRETATION OF THE ACT AND EXECUTIVE ORDER IN THIS RESPECT.

THE PERTINENT PROVISIONS OF THE ACT AND EXECUTIVE ORDER ARE AS SET FORTH IN YOUR LETTER, AS FOLLOWS:

SECTION 2. (A) IN ARRIVING AT A FAIR AND EQUITABLE SETTLEMENT OF CLAIMS UNDER THIS ACT, THE RESPECTIVE DEPARTMENTS AND AGENCIES SHALL NOT ALLOW ANY AMOUNT IN EXCESS OF THE AMOUNT OF THE NET LOSS (LESS THE AMOUNT OF ANY RELIEF GRANTED SUBSEQUENT TO THE ESTABLISHMENT OF SUCH LOSS) ON ALL CONTRACTS AND SUBCONTRACTS HELD BY THE CLAIMANT UNDER WHICH WORK, SUPPLIES, OR SERVICES WERE FURNISHED FOR THE GOVERNMENT BETWEEN SEPTEMBER 16, 1940, AND AUGUST 14, 1945 * * *.

SECTION 202. EACH CLAIM SHALL BE IN WRITING AND SHALL CONTAIN O SHALL BE ACCOMPANIED BY:

(C) A STATEMENT OF THE CONTRACT PRICE, COST OF PERFORMANCE, AND PROFIT OR LOSS, ON EACH CONTRACT AND SUBCONTRACT. THE CLAIMANT SHALL IDENTIFY EACH SUCH CONTRACT BY AGENCY, NUMBER, AND DATE, AND SHALL IDENTIFY EACH SUCH SUBCONTRACT BY NAMES OF CONTRACTING PARTIES, NUMBER (IF ANY), AND DATE. IN ADDITION, IN THE CASE OF EACH SUCH SUBCONTRACT, THE CLAIMANT SHALL SIMILARLY IDENTIFY THE RELATED PRIME CONTRACT AND EACH INTERVENING HIGHER TIER SUBCONTRACT TO THE GREATEST EXTENT POSSIBLE.

(D) A STATEMENT OF THE NET LOSS ON ALL THE CONTRACTS AND SUBCONTRACTS LISTED UNDER SUBPARAGRAPH (C) HEREOF.

(1) A LIST OF ALL BUSINESS ENTERPRISES, OF ANY KIND, DIRECTLY OR INDIRECTLY CONTROLLING, CONTROLLED BY, OR UNDER COMMON CONTROL WITH, THE CLAIMANT, AND, WITH RESPECT TO EACH SUCH BUSINESS ENTERPRISE, A DESCRIPTION OF THE MEANS OF SUCH CONTROL.

SECTION 305. NO CLAIMANT SHALL BE GRANTED RELIEF UNDER THE ACT AND THESE REGULATIONS IN ANY AMOUNT IN EXCESS OF THE AMOUNT OF THE NET LOSS (LESS THE AMOUNT OF ANY RELIEF GRANTED SUBSEQUENT TO THE ESTABLISHMENT OF SUCH LOSS) ON ALL CONTRACTS AND SUBCONTRACTS HELD BY THE CLAIMANT PURSUANT TO WHICH WORK, SUPPLIES, OR SERVICES WERE FURNISHED FOR THE GOVERNMENT DURING THE STATUTORY PERIOD.

YOUR LETTER CONTAINS NO INDICATION AS TO THE BASIS OF THE CLAIMANT'S CONTENTION IN THE MATTER. HOWEVER, THE LANGUAGE OF SECTION 2 OF THE ACT, SUPRA, THAT THE RESPECTIVE DEPARTMENTS AND AGENCIES SHALL NOT ALLOW "ANY AMOUNT IN EXCESS OF THE NET LOSS (* * *) ON ALL CONTRACTS AND SUBCONTRACTS HELD BY THE CLAIMANT * * * BETWEEN SEPTEMBER 16, 1940, AND AUGUST 14, 1945" (EMPHASIS SUPPLIED), APPEARS SO CLEAR AND CONCISE AS TO PRECLUDE CONSTRUCTION. AS WAS STATED BY THE SUPREME COURT OF THE UNITED STATES IN THE CASE OF UNITED STATES V. HARTWELL, 6 WALL. 385, 396,"IF THE LANGUAGE BE CLEAR IT IS CONCLUSIVE. THERE CAN BE NO CONSTRUCTION WHERE THERE IS NOTHING TO CONSTRUE.' FURTHERMORE, IT WOULD APPEAR THAT IF THE MATTER WERE OPEN TO CONSTRUCTION ANY DOUBT WITH RESPECT THERETO WOULD BE ENTIRELY REMOVED BY SECTION 101.11 OF EXECUTIVE ORDER 9786, WHICH PROVIDES THAT THE TERM "NET LOSS" SHALL MEAN THE AMOUNT BY WHICH THE AGGREGATE OF THE COSTS OF PERFORMANCE UNDER ,ALL CONTRACTS AND SUBCONTRACTS" EXCEEDS THE AGGREGATE OF THE CONTRACT PRICES UNDER "ALL CONTRACTS AND SUBCONTRACTS.'

IT SEEMS CLEAR, THEREFORE, THAT SINCE UNDER THE PLAIN TERMS OF SECTION 2 OF THE ACT AND SECTION 305 OF THE EXECUTIVE ORDER CONSIDERATION IS REQUIRED TO BE GIVEN BY THE RESPECTIVE DEPARTMENTS AND AGENCIES OF THE GOVERNMENT TO THE "NET LOSS" INCURRED UNDER ALL CONTRACTS OR SUBCONTRACTS HELD BY A CLAIMANT DURING THE PERIOD INVOLVED IN DETERMINING THE AMOUNTS ALLOWABLE UNDER THE ACT, AND SINCE EXAMINATION OF THE LEGISLATIVE HISTORY OF THE ACT FAILS TO DISCLOSE ANY INDICATION THAT THE CONGRESS INTENDED TO ASCRIBE TO THE LANGUAGE USED IN SAID SECTION 2 OF THE ACT ANY MEANING OTHER THAN THAT CLEARLY EXPRESSED THEREBY, THE CONTENTION OF THE HERMAN LAWSON COMPANY THAT CONSIDERATION SHOULD BE GIVEN ONLY TO THE LOSS INVOLVED IN THE PARTICULAR CONTRACT MADE THE SUBJECT OF ITS CLAIM IS WITHOUT MERIT. SEE B-70532, DATED JANUARY 26, 1948.