B-81477, MAR 7, 1949

B-81477: Mar 7, 1949

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WITH THE REQUEST THAT AN ADVANCE DECISION BE RENDERED AS TO WHETHER PAYMENT ON THE VOUCHER IS AUTHORIZED. UNDER THE TERMS OF THE CONTRACT THE CONTRACTOR WAS REQUIRED TO "FURNISH THE LABOR. THE CONTRACTOR WAS TO RECEIVE REIMBURSEMENT AS PROVIDED IN ARTICLE II OF THE CONTRACT AND WAS TO BE PAID A FIXED FEE WHICH WAS TO CONSTITUTE COMPLETE COMPENSATION FOR THE CONTRACTOR'S SERVICES. LOSSES OR EXPENSES NOT COMPENSATED BY INSURANCE OR OTHERWISE (INCLUDING SETTLEMENTS MADE WITH THE WRITTEN CONSENT OF THE CONTRACTING OFFICER) ACTUALLY SUSTAINED BY THE CONTRACTOR IN CONNECTION WITH THE WORK AND FOUND AND CERTIFIED BY THE CONTRACTING OFFICER TO BE JUST AND REASONABLE UNLESS REIMBURSEMENT THEREFOR IS EXPRESSLY PROHIBITED.

B-81477, MAR 7, 1949

PRECIS-UNAVAILABLE

LIEUTENANT COLONEL C. W. CONKLIN, F.D., U.S. ARMY:

THERE HAS BEEN RECEIVED BY REFERENCE FROM THE OFFICE OF THE CHIEF OF FINANCE, DEPARTMENT OF THE ARMY, YOUR LAST INDORSEMENT DATED JULY 22, 1948, TRANSMITTED RECLAIM VOUCHER SE898 IN THE AMOUNT OF $173.99 STATED IN FAVOR OF SEATTLE-FIRST NATIONAL BANK, ASSIGNEE FOR S. BIRCH & SONS CONSTRUCTION COMPANY, AL JOHNSON CONSTRUCTION COMPANY, C.F. LYTLE COMPANY, UNDER COST-PLUS-A-FIXED-FEE CONTRACT W-112-ENG-1000, ENTERED INTO MAY 17, 1946, WITH THE REQUEST THAT AN ADVANCE DECISION BE RENDERED AS TO WHETHER PAYMENT ON THE VOUCHER IS AUTHORIZED.

THE VOUCHER COVERS RECLAIM OF AN AMOUNT COLLECTED FROM THE CONTRACTOR AS A RESULT OF EXCEPTION TAKEN BY THE AUDIT DIVISION OF THE GENERAL ACCOUNTING OFFICE, TO REIMBURSEMENT OF PAYMENT MADE TO GERNIE E. FREEMAN, JR., CONTRACTOR'S EMPLOYEE, COVERING THE COST OF EMPLOYEE'S PERSONAL TOOLS LOST OR STOLEN WHILE IN THE CUSTODY OF THE CONTRACTOR.

UNDER THE TERMS OF THE CONTRACT THE CONTRACTOR WAS REQUIRED TO "FURNISH THE LABOR, MATERIALS, TOOLS, MACHINERY, EQUIPMENT, FACILITIES, SUPPLIES, AND SERVICES NOT FURNISHED BY THE GOVERNMENT; AND DO ALL THINGS NECESSARY FOR THE COMPLETION" OF THE WORK DESCRIBED IN ARTICLE I OF THE CONTRACT. IN CONSIDERATION FOR THE UNDERTAKING, THE CONTRACTOR WAS TO RECEIVE REIMBURSEMENT AS PROVIDED IN ARTICLE II OF THE CONTRACT AND WAS TO BE PAID A FIXED FEE WHICH WAS TO CONSTITUTE COMPLETE COMPENSATION FOR THE CONTRACTOR'S SERVICES, INCLUDING PROFIT AND ALL GENERAL OVERHEAD EXPENSES.

ARTICLE II, SECTION 1, SUBPARAGRAPHS 1 AND U OF THE CONTRACT PROVIDE AS FOLLOWS:

"1. LOSSES OR EXPENSES NOT COMPENSATED BY INSURANCE OR OTHERWISE (INCLUDING SETTLEMENTS MADE WITH THE WRITTEN CONSENT OF THE CONTRACTING OFFICER) ACTUALLY SUSTAINED BY THE CONTRACTOR IN CONNECTION WITH THE WORK AND FOUND AND CERTIFIED BY THE CONTRACTING OFFICER TO BE JUST AND REASONABLE UNLESS REIMBURSEMENT THEREFOR IS EXPRESSLY PROHIBITED; PROVIDED THAT SUCH REIMBURSEMENT SHALL NOT INCLUDE ANY AMOUNT FOR WHICH THE CONTRACTOR WOULD HAVE BEEN INDEMNIFIED OR COMPENSATED BY INSURANCE EXCEPT FOR FAILURE OF THE CONTRACTOR TO PROCURE OR MAINTAIN BONDS OR INSURANCE IN ACCORDANCE WITH THE REQUIREMENTS OF THE CONTRACTING OFFICER.

"U. IT IS MUTUALLY RECOGNIZED THAT THERE ARE DETAILS RELATIVE TO EMPLOYMENT OF LABOR AND PERSONNEL WITH REFERENCE TO PAYMENT OF WAGES AND SALARIES AND ALLOTMENTS THEREOF, INSURANCE AND OTHER MATTERS WHICH WILL BE COVERED BY SEPARATE AGREEMENTS TO BE ENTERED INTO BETWEEN THE CONTRACTOR AND ITS EMPLOYEES. SUCH EMPLOYMENT CONTRACTS WILL BE ADVANTAGEOUS THE ACCOMPLISHMENT OF THE WORK AND SERVICES UNDER THIS CONTRACT AND THE CONTRACTOR MAY, SUBJECT TO THE WRITTEN APPROVAL OF THE CONTRACTING OFFICER, ENTER INTO SUCH AGREEMENT OR AGREEMENTS OF EMPLOYMENT NOT INCONSISTENT WITH ANY OF THE EXPRESS PROVISIONS OF THIS CONTRACT AS MAY BE DEEMED NECESSARY OR DESIRABLE. AUTHORIZED DISBURSEMENTS UNDER THE PROVISIONS OF SUCH APPROVED EMPLOYMENT AGREEMENTS SHALL BE CONSIDERED LABOR COSTS REIMBURSABLE UNDER THIS CONTRACT."

THE EMPLOYMENT AGREEMENT UNDER WHICH THE EMPLOYEE WAS HIRED, PROVIDES IN PERTINENT PART, AS FOLLOWS:

"12. MISCELLANEOUS EMPLOYMENT CONDITIONS:

"B. TOOLS AND CLOTHING: THE EMPLOYEE WILL FURNISH AND BRING WITH HIM ALL OF THE TOOLS NORMALLY SUPPLIED BY EMPLOYEES IN HIS TRADE OR OCCUPATION AND ALSO PROCURE SUCH CLOTHING AND PERSONAL EQUIPMENT AS MAY BE NECESSARY TO MEET CLIMATIC CONDITIONS. TRANSPORTATION COSTS WILL BE ALLOWED ONLY FOR TOOLS AND PERSONAL POSSESSIONS REASONABLY NECESSARY TO THE SUCCESSFUL PERFORMANCE OF THE EMPLOYEE'S ASSIGNMENT.

"15. SETTLEMENT OF DISPUTES: THE SETTLEMENT OF ALL DISPUTES UNDER THIS CONTRACT SHALL BE MADE IN THE FOLLOWING MANNER:

"C. NOTICE OF CLAIM: THE EMPLOYEE AGREES THAT HE WILL, WITHIN THIRTY-DAYS AFTER ANY CLAIM ARISES, GIVE A WRITTEN NOTICE TO THE EMPLOYER SETTING FORTH IN DETAIL THE NATURE OF ANY DEBT, CLAIM, CHARGE, OR CAUSE OF ACTION GROWING OUT OF OR IN ANY WAY RELATING TO THIS AGREEMENT OR THE EMPLOYMENT HEREIN PROVIDED FOR; THAT HE WILL FILE A WRITTEN PROOF OF CLAIM WITH THE EMPLOYER WITHIN THIRTY-DAYS AFTER THE LAPSE OF THE AFORESAID THIRTY-DAY PERIOD ***."

THE CIRCUMSTANCES SURROUNDING THE DISAPPEARANCE OF THE TOOLS AND THE CONTRACTOR'S CONTENTION AS TO WHY THE ITEM IS REIMBURSABLE ARE SET FORTH IN LETTER OF MAY 5, 1948, FROM THE CONTRACTOR TO THE DISTRICT ENGINEER, SEATTLE, WASHINGTON. BRIEFLY, IT APPEARS THEREFROM THAT THE EMPLOYEE WAS FIRST HIRED BY THE CONTRACTOR AT ANCHORAGE, ALASKA; THAT HE WAS NOT ONLY A JOURNEYMAN CARPENTER BUT ALSO A HEAVY DUTY MECHANIC AND WELDER AND HAD WITH HIM THE TOOLS OF BOTH TRADES; THAT THE CONTRACTOR CALLED FOR VOLUNTEER FOR A PROJECT AT NOME, TO WHICH CALL THE EMPLOYEE RESPONDED, AFTER WHICH HE WAS ASSIGNED TO DUTY THERE; THAT HIS ACCEPTANCE OF THIS MISSION WAS DEFINITELY AN ACCOMMODATION TO THE CONTRACTOR; THAT THE WORK DESIRED OF HIM AT NOME WAS ONLY THAT OF A CARPENTER AND, AS A RESULT, THE CONTRACTOR AGREED TO AND DID STORE HIS MECHANIC'S TOOLS FOR SAFEKEEPING WHILE HE WAS AWAY. THE CONTRACTOR FURTHER STATES THAT ITS AGREEMENT TO ACCEPT THE EMPLOYEE'S TOOLS FOR SAFEKEEPING WAS FOR ITS CONVENIENCE AS WELL AS FOR THE CONVENIENCE OF THE EMPLOYEE, AND CONTENDS THAT UNDER THE CIRCUMSTANCES IT WAS INCIDENT TO THE PERFORMANCE OF THE WORK UNDER THE CONTRACT.

THE CONTRACTOR ALSO CONTENDS THAT THE AUTHORITY FOR THE REIMBURSEMENT OF SAID SETTLEMENT BY THE GOVERNMENT IS CONTAINED IN AT LEAST TWO EXPRESS PROVISIONS OF THE PRIME CONTRACT, NAMELY, ARTICLE II, SECTION 1, SUBPARAGRAPHS 1 AND U, AND THAT UNDER PARAGRAPH 15 OF THE DULY APPROVED STANDARD FORM OF EMPLOYMENT CONTRACT, THE EMPLOYER, THE EMPLOYEE, AND THE GOVERNMENT, REPRESENTED BY THE CONTRACTING OFFICER, EFFECTED THE FINAL SETTLEMENT WHICH RESULTED IN PAYMENT, AND THE GIVING OF A GENERAL RELEASE.

THE RECORD SHOWS THAT THE EMPLOYEE WAS FIRST HIRED SEPTEMBER 3, 1946, AT ANCHORAGE, ALASKA; WAS TRANSFERRED TO NOME, ALASKA, SEPTEMBER 29, 1946; THAT HIS EMPLOYMENT TERMINATED DECEMBER 9, 1946, FOR CAUSE OF "INSUFFICIENT TURNOUT OF DAYS WORK"; THAT HE RETURNED TO ANCHORAGE, DECEMBER 12, 1946; WAS REHIRED AS JOURNEYMAN CARPENTER, DECEMBER 14, 1946, CHANGED CLASSIFICATION TO WELDER, EFFECTIVE JANUARY 17, 1947, AND REQUESTED THE RETURN OF HIS TOOLS ON THAT DAY; THAT EMPLOYMENT TERMINATED MARCH 25, 1947; AND WRITTEN PROOF OF CLAIM SUBMITTED ON MARCH 25, 1947.

WHILE, AS CONTENDED BY THE CONTRACTOR, THE RELATIONSHIP BETWEEN THE CONTRACTOR AND THE EMPLOYEE WITH RESPECT TO THE LATTER'S TOOLS WAS A BAILMENT RELATIONSHIP UNDER WHICH THE CONTRACTOR, AS BAILEE, WAS REQUIRED TO USE ORDINARY CARE, AND WHILE IT WELL MAY BE THAT UNDER THE CIRCUMSTANCES THE CONTRACTOR WAS JUSTIFIED IN UNDERTAKING THE CARE OF THE TOOLS WHILE THE EMPLOYEE WAS ABSENT FROM ANCHORAGE ON THE TEMPORARY ASSIGNMENT AT NOME, IT WOULD APPEAR HOWEVER, THAT WHEN THE REASON THEREFOR -- NAMELY, THE EMPLOYEE'S TEMPORARY ASSIGNMENT TO NOME-- CEASED TO EXIST, THEN ANY REASON FOR CONTINUING THE BAILMENT ALSO CEASED. THUS, IT WOULD FOLLOW THAT THERE WAS NO BASIS FOR CONSIDERING THE AMOUNT PAID BY THE CONTRACTOR FOR ANY LOSS THEREAFTER OCCURRING UNDER THE BAILMENT AS A REIMBURSABLE ITEM OF COST TO THE CONTRACTOR.

THE RECORD INDICATES THAT THE TOOLS WERE STORED IN THE REAR OF THE CONTRACTOR'S OFFICE BUILDING AT THE FORT RICHARDSON RESERVATION AND THAT THE CONTRACTOR MOVED THE OFFICE FURNITURE FROM THAT LOCATION ON DECEMBER 21, 1946, TO ANOTHER OFFICE. IT ALSO APPEARS, AS INDICATED ABOVE, THAT THE EMPLOYEE RETURNED FROM NOME ON DECEMBER 12, 1946-- OR NINE DAYS BEFORE THE CONTRACTOR MOVED FROM THE OLD OFFICE. WHILE THE CONTRACTOR STATES IN ITS LETTER OF MAY 5, 1948, THAT THE EMPLOYEE RETURNED FROM NOME ON DECEMBER 12 AND THAT DILIGENT SEARCH WAS MADE FOR THE TOOLS, IT DOES NOT APPEAR THEREFROM THAT THE REQUEST FOR THE RETURN OF THE TOOLS OR THE SEARCH THEREFOR WAS MADE PROMPTLY UPON THE EMPLOYEE'S RETURN OR WITHIN A REASONABLE TIME THEREAFTER. IN FACT, IT APPEARS FROM A LETTER OF JUNE 27, 1947, OF THE LABOR RELATIONS MANAGER OF THE CONTRACTOR ANCHORAGE THAT THE EMPLOYEE DID NOT CALL FOR HIS TOOLS UNTIL JANUARY 17, 1947-- OR MORE THAN A MONTH AFTER HIS RETURN FROM NOME, WHEN, AS INDICATED ABOVE, ANY REASON FOR CONTINUING THE BAILMENT CEASED-- THUS, INDICATING THAT IT WAS NOT UNTIL THEN THAT A SEARCH FOR THE TOOLS WAS MADE. THERE IS NO SHOWING THAT THE TOOLS COULD NOT HAVE BEEN LOCATED AND RETURNED TO THE EMPLOYEE HAD HE MADE REQUEST THEREFORE PROMPTLY UPON HIS RETURN FROM NOME OR WITHIN A REASONABLE TIME THEREAFTER.

FURTHERMORE, SECTION 15C OF THE CONTRACT OF EMPLOYMENT, WHICH SECTION IS HEREINABOVE QUOTED, PROVIDED THAT THE EMPLOYEE WOULD WITHIN 30 DAYS AFTER ANY CLAIM AROSE GIVE WRITTEN NOTICE THEREOF, AND WOULD FILE A CLAIM WITH THE EMPLOYER WITHIN 30 DAYS AFTER THE LAPSE OF THE FIRST MENTIONED 30-DAY PERIOD. HOWEVER, IT DOES NOT APPEAR THAT THE EMPLOYEE COMPLIED WITH EITHER OF THOSE CONDITIONS. IN THIS CONNECTION, THE RECORD FAILS TO SHOW THAT THE EMPLOYEE FILED A WRITTEN NOTICE OF THE CLAIM AT ALL AND DOES SHOW THAT HE DID NOT FILE A WRITTEN PROOF OF CLAIM UNTIL MARCH 25, 1947-- WHICH WAS WELL AFTER THE EXPIRATION OF THE TIME LIMITED THEREFORE.

ACCORDINGLY, THE VOUCHER, TOGETHER WITH SUPPORTING PAPERS, IN RETURN HEREWITH, AND YOU ARE ADVISED THAT PAYMENT THEREON IS NOT AUTHORIZED.