B-100847, APRIL 17, 1951, 30 COMP. GEN. 404

B-100847, APRIL 17, 1951, 30 COMP. GEN. 404

CONTRACTS - INCREASED COSTS - WAGES - FAILURE OF CONTRACTOR TO SPECIFY PREDOMINANT OCCUPATIONAL CLASS OF EMPLOYEES WHERE COAL PURCHASE CONDITIONS MADE PART OF THE CONTRACT PROVIDED FOR A PERCENTAGE PRICE ADJUSTMENT IN CASE OF WAGE CHANGES AFTER OPENING OF BIDS, BASED ON THE PREDOMINANT OCCUPATIONAL CLASS OF LABOR RECEIVING THE SAME WAGE RATE SPECIFIED BY THE CONTRACTOR, AND THE CONTRACTOR, WITH THE EXCEPTION OF ONE MINE, DID NOT CORRECTLY DESIGNATE THE PREDOMINANT OCCUPATIONAL CLASS OF LABOR UNTIL AFTER AN INCREASE IN WAGE RATES BECAME EFFECTIVE, PAYMENT OF ANY AMOUNT IN ADDITION TO THE CONTRACT PRICE IS UNAUTHORIZED EXCEPT FOR SHIPMENTS MADE FROM THE MINE WHERE THE PREDOMINANT CLASS OF LABOR WAS CORRECTLY DESIGNATED.

COMPTROLLER GENERAL WARREN TO THE FORESTON COAL COMPANY, INC., APRIL 17, 1951:

REFERENCE IS MADE TO YOUR LETTER OF NOVEMBER 17, 1950, REQUESTING RECONSIDERATION OF THE ACTION TAKEN IN GENERAL ACCOUNTING OFFICE SETTLEMENTS OF MAY 17 AND JULY 25, 1950, WHEREIN THERE WERE DISALLOWED YOUR CLAIMS FOR $309.20 AND $176.16, RESPECTIVELY, REPRESENTING AMOUNTS DEDUCTED FROM PAYMENTS OTHERWISE DUE YOU TO COVER CERTAIN OVERPAYMENTS MADE FOR COAL FURNISHED THE VETERANS ADMINISTRATION UNDER CONTRACT NO. VAM -22663, DATED APRIL 24, 1947. ALSO, YOU PROTEST THE ACTION TAKEN BY THE ADMINISTRATIVE OFFICE IN ASSERTING A FURTHER CLAIM IN THE CORRECTED SUM OF $3,856.37, FOR SIMILAR OVERPAYMENTS MADE UNDER THE SAME CONTRACT.

THE RECORD BEFORE THIS OFFICE SHOWS THAT IN RESPONSE TO INVITATION YOU SUBMITTED A BID TO FURNISH COAL TO SEVERAL DESIGNATED VETERANS ADMINISTRATION FACILITIES, WHICH BID WAS ACCEPTED ON APRIL 24, 1947, AS TO CERTAIN OF THE ITEMS LISTED THEREIN. PARAGRAPH 6 OF THE SPECIAL PURCHASE CONDITIONS MADE A PART OF THE CONTRACT PROVIDED THAT IN THE EVENT CHANGES SHOULD OCCUR IN THE WAGE SCALES OR OTHER CONDITIONS OF EMPLOYMENT RESULTING "IN AN INCREASE OR DECREASE IN THE WAGE RATE PAID TO THE PREDOMINANT OCCUPATIONAL CLASS OF LABOR EMPLOYED AT THE MINE, (THE PREDOMINANT OCCUPATIONAL CLASS OF LABOR EMPLOYED TO BE THAT STATED IN THE BID), THE CONTRACT PRICE OF THE COAL SHALL BE AUTOMATICALLY INCREASED OR DECREASED BY AN AMOUNT WHICH IS THE PRODUCT OF THE F.O.B. MINE PRICE TIMES 0.64, TIMES THE PERCENT OF THE INCREASE OR DECREASE IN THE WAGE RATE OF THE PREDOMINANT OCCUPATIONAL CLASS OF LABOR EMPLOYED AT THE MINE.'

YOUR BID FAILED TO STATE THE WAGE RATE AND PREDOMINANT OCCUPATIONAL CLASS OF LABOR AT THE MINES SET FORTH THEREIN, AND YOU WERE SO ADVISED BY THE ADMINISTRATIVE OFFICE UNDER DATE OF JUNE 24,1947. IN REPLY THERETO YOU STATED IN LETTER OF JUNE 27, 1947, THAT "THE IDENTIFYING DESCRIPTION OF WAGE SCALE IN EFFECT ON THE DATE OUR BID WAS OPENED, WAS WITH UNITED MINE WORKERS" AND THAT THE PREDOMINANT OCCUPATIONAL CLASS OF MINE EMPLOYEES EMPLOYED AT THE VARIOUS MINES WAS " MINERS AND BREAKER-MEN.' THEREAFTER, BY AGREEMENT DATED JULY 10, 1947, BETWEEN REPRESENTATIVES OF THE UNITED MINE WORKERS OF AMERICA AND THE MINE OPERATORS, THE WAGE SCALES OF THE MINE EMPLOYEES WERE INCREASED EFFECTIVE AUGUST 1, 1947.

WHILE YOUR LETTER OF JUNE 27, 1947, STATES THAT MINERS AND BREAKER MEN WERE THE PREDOMINANT CLASSES OF EMPLOYEES IN WAGES (AND A CORRESPONDING INCREASE IN THE CONTRACT PRICE OF THE COAL WAS TO BECOME EFFECTIVE), YOU INFORMED THE ADMINISTRATIVE OFFICE THAT, WITH THE EXCEPTION OF THE ST. CLAIR MINE, LABORERS WERE THE PREDOMINANT OCCUPATIONAL CLASS OF WORKERS. SUCH INFORMATION WAS FURNISHED TO THE VETERANS ADMINISTRATION BY YOUR LETTERS OF AUGUST 28 AND DECEMBER 31, 1947, AND JANUARY 23, 1948, TRANSMITTING LETTERS YOU HAD RECEIVED FROM THE SEVERAL CONCERNS OPERATING THE VARIOUS MINES. IN OFFICE DECISION OF OCTOBER 10, 1938, 18 COMP. GEN. 320, AFFIRMED ON DECEMBER 8, 1938, 18 COMP. GEN. 514, IT WAS HELD, QUOTING FROM THE SYLLABUS, THAT---

WHERE COAL PURCHASE CONDITIONS AND CONTRACT PROVIDED FOR A PERCENTAGE CONTRACT PRICE ADJUSTMENT IN CASE OF WAGE CHANGES AFTER THE OPENING OF BIDS, BASED ON THE PREDOMINANT OCCUPATIONAL CLASS OF LABOR RECEIVING THE SAME WAGE RATE, SPECIFIED BY THE CONTRACTOR, AND THE CONTRACTOR'S BID NEVERTHELESS SPECIFIED SEVERAL CLASSES OF EMPLOYEES RECEIVING SEVERAL DIFFERENT WAGE RATES, EVEN TO THE INCLUSION, CLERICAL EMPLOYEES, THERE IS NO AUTHORITY FOR PAYMENT OF ANY AMOUNT IN ADDITION TO THE CONTRACT PRICE, NOTWITHSTANDING THE CONTRACTOR MAY HAVE INCREASED THE WAGE RATES OF MINE EMPLOYEES, AS THE CONTRACT DOES NOT AUTHORIZE THE SELECTION OF A PREDOMINANT CLASS AFTER A CHANGE IN WAGE RATES AT THE TIME AND AN ADJUSTMENT IN PRICE BASED ON THE PERCENTAGE INCREASE IN THE WAGE RATE OF THE CLASS SO SELECTED.

LIKEWISE, IN THIS CASE, EXCEPT AS TO THE ST. CLAIR MINE, THE PREDOMINANT OCCUPATIONAL CLASS OF LABOR WAS NOT CORRECTLY DESIGNATED UNTIL AFTER THE INCREASE IN WAGE RATES BECAME EFFECTIVE, AND WHAT WAS SAID IN THAT DECISION EQUALLY IS FOR APPLICATION HERE. PRIOR TO THE DATE THE INCREASED WAGES OF EMPLOYEES WENT INTO EFFECT YOU DESIGNATED MINERS AND BREAKER-MEN AS THE PREDOMINANT CLASSES OF WORKERS, WHEREAS THE RECORD SHOWS THAT AT THE OTTO COLLIERY, AND AT THE FLORENCE, WINTON, AND BLACKWOOD MINES THE PREDOMINANT CLASS OF WORKERS DURING THE CONTRACT PERIOD WAS LABORERS. WHILE THE TERM MINER MAY DESCRIBE, BROADLY, ANYONE WORKING IN A MINE INCLUDING (MINE) LABORER, IN THE INDUSTRY IT IS APPARENT THAT IT HAS A MORE SPECIFIC MEANING AS EVIDENCED BY THE USE OF THE TERM IN CONNECTION WITH THE ST CLAIR MINE WHERE THE PREDOMINANT OCCUPATIONAL CLASS WAS DESIGNATED AS MINER.

SINCE THE ONLY CORRECT DESIGNATION MADE BY YOU AS TO THE PREDOMINANT CLASS OF WORKERS, PRIOR TO THE DATE OF INCREASE, WAS THAT STATED IN CONNECTION WITH THE ST. CLAIR MINE, THERE IS NO LEGAL BASIS FOR THIS OFFICE TO AUTHORIZE A CORRESPONDING INCREASE IN THE PRICE OF COAL FURNISHED UNDER THE CONTRACT EXCEPT THOSE SHIPMENTS MADE FROM THE ST. CLAIR MINE. ACCORDINGLY, APPROPRIATE INSTRUCTIONS WILL BE ISSUED TO THE CLAIMS DIVISION OF THIS OFFICE TO REEXAMINE YOUR ACCOUNT IN THE LIGHT OF THE FOREGOING, EXTENDING CREDIT FOR THE PROPER INCREASE IN PRICE AS PROVIDED FOR BY THE CONTRACT FOR ALL COAL DELIVERED FROM THE ST. CLAIR MINE.