B-144473, DEC. 30, 1960

B-144473, DEC. 30, 1960

TO JAMES W. RIDDLEBERGER, DIRECTOR, INTERNATIONAL COOPERATION ADMINISTRATION:

WE REFER TO A LETTER OF NOVEMBER 15, 1960, FROM THE ACTING GENERAL COUNSEL, INTERNATIONAL COOPERATION ADMINISTRATION, REQUESTING A DECISION REGARDING PAYMENT OF TRAVEL EXPENSES OF APPROXIMATELY $4,000 INCURRED DURING THE PERIOD DECEMBER 6, 1957, TO JANUARY 21, 1958, BY MR. LEONARD A. LOVELL, A PARTNER OF TIPPETTS ABBETT MCCARTHY STRATTON, A NEW YORK ENGINEERING FIRM.

THE TRIP WAS UNDERTAKEN PURSUANT TO AN ICA-FINANCED CONTRACT DATED JULY 26, 1957, WHICH NAMED AS PARTIES THE SHIHMEN DEVELOPMENT COMMISSION, AN AGENCY OF THE REPUBLIC OF CHINA, AND TIPPETTS ABBETT MCCARTHY STRATTON, ENGINEERS, 62 WEST 47TH STREET, NEW YORK 36, NEW YORK. THE CONTRACT CALLED FOR THE PARTNERSHIP TO FURNISH ARCHITECTURAL AND ENGINEERING SERVICES TO THE COMMISSION REGARDING THE SHIHMEN DAM ON TAIWAN.

SECTION 7.12 OF THE CONTRACT PROVIDED: "ENGINEER, WITH PRIOR WRITTEN APPROVAL OF ICA, AND COMMISSION MAY UTILIZE IN TAIWAN THE SERVICES OF ITS PARTNERS AND HOME OFFICE PERSONNEL, (NOT PERMANENTLY ASSIGNED THERETO), FOR WORK IN CONNECTION WITH THIS PROJECT.'

MR. LEONARD A. LOVELL TRAVELED TO TAIWAN DURING THE PERIODS JULY 18 TO AUGUST 16, 1957, AND DECEMBER 6, 1957, TO JANUARY 21, 1958, IN CONNECTION WITH WORK ON THE SHIHMEN DAM PROJECT. THE FIRST TRIP WAS UNDERTAKEN PURSUANT TO A LETTER OF AGREEMENT PRIOR TO THE SIGNING OF THE CONTRACT IN QUESTION ON JULY 26, 1957, AND NO PRIOR WRITTEN APPROVAL FROM ICA FOR THE TRIP WAS REQUIRED BY THE LETTER. ALTHOUGH THE TRIP BEGINNING DECEMBER 6, 1957, WAS MADE WITHOUT A FORMAL REQUEST FOR WRITTEN APPROVAL FROM ICA, THE ENGINEERING NECESSITY FOR THAT TRIP HAD BEEN DISCUSSED WITH THE ICA PROJECT ENGINEER, MR. JOHN G. LIGHTFOOT. IN A MEMORANDUM ON THE SUBJECT, DATED MAY 9, 1960, MR. LIGHTFOOT STATED AS FOLLOWS:

"IT IS THE WRITER'S OPINION THAT TAMS' FAILURE TO OBTAIN PRIOR WRITTEN APPROVAL FOR THE SECOND TRIP WAS AN OVERSIGHT. BEING AWARE OF THE NEED FOR THE SECOND TRIP TO AUTHORITATIVELY REVIEW SITE GEOLOGIC AND MATERIALS EXPLORATION WORK, THE WRITER WOULD HAVE RECOMMENDED APPROVAL BY ICA OF THE TRIP HAD A SPECIFIC REQUEST BEEN RECEIVED. IT IS RECOMMENDED THAT, IF POSSIBLE, MEASURES BE TAKEN TO REIMBURSE TAMS FOR MR. LOVALL'S TRAVEL COSTS FOR THE SECOND TRIP.

"THE BENEFITS DERIVED FROM THIS TRIP WERE VERY FRUITFUL AND CONSISTED OF: ESTABLISHING THE TYPE OF DAM TO BE DESIGNED; PREPARING PRELIMINARY COST ESTIMATES ON SUCH AN UNDERTAKING; AND PREPARATION OF THE DESIGN PLANNING SCHEDULE AS WELL AS A SUGGESTED CONSTRUCTION SCHEDULE. THIS WORK WAS PERFORMED AND DETAILED REPORTS WERE SUBMITTED ON DECEMBER 19, 1957, JANUARY 7, 1958, JANUARY 9, 1958 AND JANUARY 21, 1958 TO THE SHIHMEN DEVELOPMENT COMMISSION WITH COPIES TO ICA. IN ADDITION LETTERS WERE SENT TO THE WRITER ON MARCH 3 AND 6, 1958 OUTLINING THIS WORK ALONG WITH THE DECISIONS OF THE SHIHMEN DEVELOPMENT COMMISSION.'

OUR OFFICE AND THE COURTS HAVE HELD, IN CASES INVOLVING CONTRACTS CONTAINING CLAUSES UNDER WHICH THE REIMBURSEMENT OF A CONTRACTOR FOR SPECIFIED COSTS IS MADE DEPENDENT UPON HIS RECEIVING APPROVAL IN ADVANCE IN WRITING FROM THE GOVERNMENT CONTRACTING OFFICER, THAT A CONTRACTOR WHO HAS AGREED TO SUCH A CLAUSE IS NOT FREE TO DISREGARD IT, AND HIS FAILURE TO GET PRIOR WRITTEN APPROVAL IS SUFFICIENT WITHOUT ANYTHING ELSE TO PREVENT RECOVERY. 24 COMP. GEN. 565, 572, AND COURT CASES CITED THEREIN. THE PURPOSE OF SUCH A CLAUSE IS TO PROVIDE A MEANS OF SUPERVISING THE REIMBURSABLE COSTS INCURRED BY THE CONTRACTOR. HOWEVER, IN THE PRESENT CASE, THE GOVERNMENT WAS NOT DEPRIVED OF ITS RIGHT OF SUPERVISION OF REIMBURSABLE EXPENSES, SINCE THE RECORD SHOWS THAT MR. LOVELL'S TRIP TO TAIWAN BEGINNING DECEMBER 6, 1957, WAS UNDERTAKEN ONLY AFTER CAREFUL CONSIDERATION OF THE NECESSITY FOR THE TRIP AND EXTENSIVE PLANNING WITH BOTH THE SHIHMEN COMMISSION AND ICA.

IN CERTAIN INSTANCES SIMILAR TO THE CASE AT HAND, WHERE APPROVAL IN WRITING WOULD HAVE BEEN FORTHCOMING IF FORMALLY REQUESTED AND THE GOVERNMENT RECEIVED THE BENEFIT OF THE SERVICES PERFORMED, OUR OFFICE HAS ALLOWED RECOVERY. SEE OUR DECISION B-123139 OF MAY 18, 1955, TO THE DIRECTOR OF THE FOREIGN OPERATIONS ADMINISTRATION.

ON THE BASIS OF THE RECORD BEFORE US, WE ARE OF THE OPINION THAT MR. LOVELL'S TRIP WAS NECESSARY BEFORE THE CONSTRUCTION OF THE SHIHMEN DAM COULD GO FORWARD, AND THE BENEFIT TO ICA AS A RESULT OF THE TRIP WAS SUBSTANTIAL. WHILE THE CORRESPONDENCE AND CONVERSATIONS INVOLVED IN PLANNING THE TRIP DID NOT CONSTITUTE PRIOR WRITTEN APPROVAL BY ICA, SUCH APPROVAL WOULD HAVE BEEN GRANTED IF A FORMAL REQUEST HAD REACHED THE CONTRACTING OFFICER.

UNDER THE CIRCUMSTANCES, WE FIND NO OBJECTION TO PAYMENT OF THE EXPENSES OF MR. LOVELL'S TRIP FROM DECEMBER 6, 1957, TO JANUARY 21, 1958, IF OTHERWISE ALLOWABLE UNDER THIS CONTRACT.