B-119701, JUL. 23, 1957

B-119701, JUL. 23, 1957

TO MR. WILLIAM P. MACCRACKEN, JR.:

REFERENCE IS MADE TO YOUR LETTER OF JANUARY 28, 1957, WITH ENCLOSURES, CONCERNING THE DISALLOWANCE OF A PRO RATA PORTION OF THE SALARY OF MR. DON N. BRIDGES UNDER THE FOLLOWING COST-PLUS-A-FIXED-FEE CONTRACTS BETWEEN THE UNITED STATES AIR FORCE AND THE REMINGTON RAND UNIVAC, DIVISION OF SPERRY RAND CORPORATION, AND ITS PREDECESSORS:

CHART

DISALLOWANCE

FOR PRO RATA

CONTRACT NUMBER PORTION OF SALARY

AF 33/038/-7510 $ 389.12

AF 33/038/-10965 741.99

AF 33/038/-14317 1,738.15

AF 33/038/-14298 2,553.99

AF 33/038/-23069 510.77

AF 33/600/-6293 1,329.82

AF 33/600/-15225 187.35

$ 7,451.19

THE EMPLOYMENT OF MR. BRIDGES AND THE ALLOCATION OF A PRO RATA PORTION OF HIS COMPENSATION TO VARIOUS CONTRACTS WAS ORIGINALLY APPROVED BY THE CONTRACTING OFFICER ON OCTOBER 23, 1950. EXCEPTION WAS TAKEN TO THE INCLUSION OF THE PRO RATA PORTION OF THE SALARY IN DIRECT COSTS UNDER THE FIRST CONTRACT LISTED ABOVE BY REPRESENTATIVES OF OUR OFFICE ON THE BASIS THAT THE SERVICES PERFORMED BY MR. BRIDGES WERE ALMOST SOLELY OF A SALES PROMOTIONAL NATURE AND THEREFORE WERE NOT ALLOWABLE COSTS UNDER AFPI 15- 205 (D) AND (Q) AND UNDER ASPR 15-205 (D) AND (Q). THE CLAIMS UNDER THE SUBSEQUENT CONTRACTS WERE DISALLOWED BY THE AIR FORCE ON THE BASIS AS STATED IN A LETTER TO US OF JUNE 21, 1957, THAT MR. BRIDGES' SERVICES ACTUALLY PERFORMED IN CONNECTION WITH THE CONTRACTS WERE OF A SALES PROMOTIONAL NATURE ONLY AND IN DIRECT CONFLICT WITH THE INFORMATION SUPPLIED BY THE CONTRACTOR IN ITS LETTER OF OCTOBER 10, 1950, WHICH WAS THE BASIS UPON WHICH THE CONTRACTING OFFICER ORIGINALLY APPROVED THE ALLOCATION OF COMPENSATION TO THE SAID EMPLOYEE. IT IS FURTHER STATED IN THE LETTER THAT:

"FROM OUR FURTHER REVIEW AND ANALYSIS OF THIS MATTER, WE HAVE CONCLUDED THAT THE SERVICES ACTUALLY PERFORMED BY MR. BRIDGES WERE NOT IN FACT IN ACCORDANCE WITH THE UNDERSTANDING UNDER WHICH THE ALLOCATION OF HIS SALARY WAS ORIGINALLY APPROVED BY THE ADMINISTRATIVE CONTRACTING OFFICER.'

ON THE BASIS OF OUR FINDINGS AND THOSE OF THE DEPARTMENT OF THE AIR FORCE, WE ARE FORCED TO CONCLUDE THAT NO PORTION OF THE TOTAL OF $7,451.19 IS REIMBURSABLE.

IT SHOULD PERHAPS BE EXPLAINED THAT, ALTHOUGH IN OUR LETTER TO YOU OF MAY 20, 1954, REFERENCE WAS MADE TO POSSIBLE VIOLATION OF THE COVENANT AGAINST CONTINGENT FEES, NO SUCH VIOLATION WAS FOUND. THE DISALLOWANCES RESULT RATHER FROM THE DETERMINATION THAT THE SERVICES PERFORMED BY MR. BRIDGES WERE NOT OF THE CHARACTER DESCRIBED IN THE CONTRACTOR'S LETTER OF OCTOBER 10, 1950, ON THE BASIS OF WHICH HIS EMPLOYMENT WAS APPROVED. THIS DETERMINATION IS OF COURSE CONTRARY TO THE STATEMENTS MADE IN THE AFFIDAVIT SUBMITTED WITH YOUR LETTER, BUT YOU WILL UNDERSTAND THAT IT IS THE RULE OF OUR OFFICE THAT IN DISPUTED QUESTIONS OF FACT WE MUST ACCEPT THE ADMINISTRATIVE VERSION UNLESS IT IS REFUTED BY VIRTUALLY CONCLUSIVE EVIDENCE.