B-80748, JAN 5, 1949

B-80748: Jan 5, 1949

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WITH THE REQUEST THAT AN ADVANCE DECISION BE RENDERED AS TO WHETHER PAYMENT THEREON IS AUTHORIZED. THE AMOUNT OF THE VOUCHER WAS COLLECTED FROM THE CONTRACTORS AS THE RESULT OF EXCEPTIONS TAKEN BY THE AUDIT DIVISION OF THE GENERAL ACCOUNTING OFFICE TO THE PAYMENT THEREOF AS REIMBURSEMENT OF CHARGES PAID TO THE BANK OF GUAM FOR THE FURNISHING OF DUPLICATE BANK STATEMENTS. THE RECORD SHOWS THAT SUCH EXCEPTIONS WERE TAKEN IN VIEW OF THE FACT THAT. IT IS PROVIDED THAT THE STIPULATED FIXED FEE OF $503. WHICH IS ATTACHED TO THE RECLAIM VOUCHER. THAT THE ACCOUNTS MAINTAINED AT THE BANK OF GUAM ARE NECESSARY ONLY BECAUSE OF SUCH CONTRACTUAL OPERATIONS AND THAT THE COST INCURRED IN MAINTAINING THE SAID ACCOUNTS WERE.

B-80748, JAN 5, 1949

PRECIS-UNAVAILABLE

LIEUTENANT W. A. JONES, USAF:

THERE HAS BEEN RECEIVED BY REFERENCE FROM THE DIRECTOR OF FINANCE YOUR LETTER OF AUGUST 30, 1948, TRANSMITTING, WITH THE REQUEST THAT AN ADVANCE DECISION BE RENDERED AS TO WHETHER PAYMENT THEREON IS AUTHORIZED, RECLAIM AUDIT VOUCHER NO. MG-M-582, PROPOSING PAYMENT OF THE SUM OF $69.40 TO MORRISON-ENUDSON COMPANY, INC., AND PETER KIEWIT SONS', INC., CONTRACTORS FOR THE CONSTRUCTION OF DEFENSE BASE FACILITIES ON THE ISLANDS OF GUAM AND THE MARIANAS UNDER COST-PLUS-A FIXED-FEE CONTRACT NO. W-04-470-ENG-3, DATED MAY 22, 1946.

THE AMOUNT OF THE VOUCHER WAS COLLECTED FROM THE CONTRACTORS AS THE RESULT OF EXCEPTIONS TAKEN BY THE AUDIT DIVISION OF THE GENERAL ACCOUNTING OFFICE TO THE PAYMENT THEREOF AS REIMBURSEMENT OF CHARGES PAID TO THE BANK OF GUAM FOR THE FURNISHING OF DUPLICATE BANK STATEMENTS, FOR THE MAINTENANCE OF A "PETTY CASH BANK ACCOUNT" AND FOR THE MAINTENANCE OF A "VOUCHER ACCOUNT" IN THE RESPECTIVE TOTAL AMOUNTS OF $4, $7.40 AND $58. ALSO, THE RECORD SHOWS THAT SUCH EXCEPTIONS WERE TAKEN IN VIEW OF THE FACT THAT, UNDER ARTICLE I OF THE CONTRACT, IT IS PROVIDED THAT THE STIPULATED FIXED FEE OF $503,852 "SHALL CONSTITUTE COMPENSATION FOR THE CONTRACTOR'S SERVICES INCLUDING PROFIT AND ALL GENERAL OVERHEAD EXPENSES."

IN A LETTER DATED AUGUST 4, 1948, WHICH IS ATTACHED TO THE RECLAIM VOUCHER, THE CONTRACTING OFFICER STATES THAT THE OFFICE OF THE CONTRACTORS, LOCATED IN GUAM, SERVES NO PURPOSE OTHER THAN THAT ESSENTIAL TO OPERATIONS UNDER THE CONTRACT, THAT THE ACCOUNTS MAINTAINED AT THE BANK OF GUAM ARE NECESSARY ONLY BECAUSE OF SUCH CONTRACTUAL OPERATIONS AND THAT THE COST INCURRED IN MAINTAINING THE SAID ACCOUNTS WERE, THEREFORE, CONSIDERED PROPERLY REIMBURSABLE UNDER THE PROVISIONS OF ARTICLE II OF THE CONTRACT.

ARTICLE II OF THE CONTRACT PROVIDES, IN PERTINENT PART, THAT THE CONTRACTORS SHALL BE REIMBURSED FOR SUCH OF THEIR ACTUAL EXPENDITURES IN THE PERFORMANCE OF THE WORK AS MAY BE APPROVED BY THE CONTRACTING OFFICER AND AS ARE INCLUDED IN SUBPARAGRAPHS (A) TO (V), INCLUSIVE, OF SECTION 1 OF SUCH ARTICLE. UNDER SUBPARAGRAPH (R), PROVISION IS MADE FOR REIMBURSEMENT OF THE EXPENSES INCURRED BY THE CONTRACTORS FOR THE CASHING OF EMPLOYEES' PAYROLL CHECKS, AND UNDER SUBPARAGRAPH (V), IT IS PROVIDED THAT THE CONTRACTORS SHALL BE REIMBURSED FOR "SUCH OTHER ITEMS NOT EXPRESSLY EXCLUDED BY OTHER PROVISIONS OF THIS CONTRACT AS SHOULD, IN THE OPINION OF THE CONTRACTING OFFICER, BE INCLUDED IN THE COST OF THE WORK."

THE RECORD INDICATES THAT THE CONTRACTORS'"PETTY CASH BANK ACCOUNT" WAS MAINTAINED PRIMARILY FOR THE PURPOSE OF CASHING EMPLOYEES' PAYROLL CHECKS WHILE THE CONTRACTORS'"VOUCHER ACCOUNT" WAS MAINTAINED FOR MORE GENERAL PURPOSES, SUCH AS THE PAYMENT OF EXPENSES INCURRED IN THE PURCHASE OF SUPPLIES REQUIRED IN THE PERFORMANCE OF THE CONTRACT. ALSO, IT APPEARS THAT THE DUPLICATE BANK STATEMENTS WERE FURNISHED SOLELY FOR THE CONVENIENCE OF THE PROJECT AUDITOR OF THE CORPS OF ENGINEERS.

UNDER THE CIRCUMSTANCES, AND ON THE BASIS OF THE REFERRED-TO PROVISIONS OF ARTICLE II OF THE CONTRACT, IT CLEARLY APPEARS THAT THE CONTRACTORS ARE ENTITLED TO REIMBURSEMENT FOR THE EXPENSES OF MAINTAINING THE "PETTY CASH BANK ACCOUNT" AND FOR AMOUNTS CHARGED BY THE BANK OF GUAM FOR THE FURNISHING OF DUPLICATE BANK STATEMENTS. FURTHER, IN VIEW OF THE CONTRACTING OFFICERS' OF DUPLICATE BANK FURTHER, IN VIEW OF THE CONTRACTING OFFICERS' FINDING THAT THE ACCOUNTS HERE INVOLVED WERE MAINTAINED AT THE BANK ONLY IN CONNECTION WITH ESSENTIAL CONTRACT OPERATIONS, IT REASONABLY MAY BE CONCLUDED THAT THE COST OF MAINTAINING THE CONTRACTORS'"VOUCHER ACCOUNT" IS AN ITEM OF REIMBURSABLE EXPENSE WITHIN THE CONTEMPLATION OF ARTICLE II OF THE CONTRACT, RATHER THAN AN ITEM OF GENERAL OVERHEAD EXPENSE OF THE TYPE SPECIFICALLY EXCLUDED FROM REIMBURSEMENT BY THE TERMS OF ARTICLE I OF THE CONTRACT.

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