B-164952, OCTOBER 17, 1968, 48 COMP. GEN. 209

B-164952, OCTOBER 17, 1968, 48 COMP. GEN. 209

VESSELS - GOVERNMENT-OWNED - DAMAGES - DISPOSITION OF FUNDS RECOVERED THE COMPENSATION PAID BY AN INSURANCE FIRM TO THE COST-PLUS CONTRACTOR OPERATING AND MAINTAINING A RESEARCH VESSEL FOR THE NATIONAL SCIENCE FOUNDATION TO COVER THE DAMAGES SUSTAINED BY THE VESSEL WHILE BEING OVERHAULED AND REPAIRED BY A SUBCONTRACTOR MAY NOT BE USED TO AUGMENT THE FOUNDATION'S APPROPRIATIONS, ABSENT SPECIFIC STATUTORY AUTHORITY, AND THE MONEYS, EVEN IF PAID TO THE PRIME CONTRACTOR, ARE FOR DEPOSIT AS MISCELLANEOUS RECEIPTS INTO THE TREASURY OF THE UNITED STATES IN CONSONANCE WITH SECTION 3617, REVISED STATUTES, 31 U.S.C. 484.

TO THE DIRECTOR, NATIONAL SCIENCE FOUNDATION, OCTOBER 17, 1968:

WE REFER TO YOUR LETTER OF JULY 26, 1968, CONCERNING THE USE OF FUNDS RECEIVED BY THE ALPINE GEOPHYSICAL ASSOCIATES, INC., AS COMPENSATION FOR DAMAGES TO THE RESEARCH VESSEL ANTON BRUUN, A GOVERNMENT-OWNED VESSEL UNDER THE CONTROL OF THE NATIONAL SCIENCE FOUNDATION. THE ALPINE GEOPHYSICAL ASSOCIATES, INC., IS A COST-PLUS CONTRACTOR OF THE NATIONAL SCIENCE FOUNDATION FOR THE OPERATION AND MAINTENANCE OF THE ANTON BRUUN.

THE OPERATION AND MAINTENANCE BY ALPINE OF THE ANTON BRUUN AS A RESEARCH SUPPORT FACILITY OF THE NATIONAL SCIENCE FOUNDATION BEGAN IN 1963. THE VESSEL, WITH CREW AND SUPPLIES FURNISHED BY ALPINE, PARTICIPATED IN THE INTERNATIONAL INDIAN OCEAN EXPEDITION AND THE SOUTHWESTERN PACIFIC BIOLOGICAL OCEANOGRAPHIC PROGRAM OF THE UNITED STATES.

WITH THE CONCLUSION OF THE SOUTHWESTERN PACIFIC BIOLOGICAL OCEANOGRAPHIC PROGRAM IN 1966 THE ANTON BRUUN WAS INACTIVATED. CUSTODY OF THE SHIP WAS RETAINED BY ALPINE UNDER ITS CURRENT CONTRACT, NSF-C-443, EFFECTIVE SEPTEMBER 1, 1965. IN APRIL 1967 THE FOUNDATION DECIDED TO REHABILITATE AND MODIFY THE ANTON BRUUN IN ORDER TO TRANSFER HER TO THE GOVERNMENT OF INDIA FOR OCEANOGRAPHIC RESEARCH. PURSUANT TO AMENDMENTS OF THE CONTRACT FOR THAT PURPOSE, ALPINE ENTERED INTO A FIXED PRICE SUBCONTRACT, IN THE AMOUNT OF $159,636 WITH IRA S. BUSHEY AND SONS, INC., FOR THE OVERHAUL AND REPAIR OF THE ANTON BRUUN.

THE DAMAGING OF THE ANTON BRUUN AND THE SUBSEQUENT ACTIVITIES OF ALPINE ARE SET FORTH IN YOUR LETTER AS FOLLOWS:

ON JUNE 28, 1967, THE SHIP WAS DELIVERED INTO THE CUSTODY OF BUSHEY. BUSHEY TOWED THE VESSEL TO ITS YARD, PLACED IT IN DRYDOCK, AND COMMENCED WORK UNDER THE SUBCONTRACT. ON THE NIGHT OF JUNE 30, 1967, THE DRYDOCK CAPSIZED AND SANK DOING MINOR STRUCTURAL DAMAGE TO ANTON BRUUN BUT ENTAILING A GREAT DEAL OF DAMAGE AS A RESULT OF FLOODING. ANTON BRUUN WAS RAISED ON JULY 15, 1967, AND STEPS WERE TAKEN TO CLEAN AND PRESERVE THE SHIP. NEGOTIATIONS WERE IMMEDIATELY ENTERED INTO CONCERNING THE RESTORATION OF THE SHIP TO HER PREVIOUS CONDITION AND ALSO FOR THE COMPLETION OF THE ORIGINAL OVERHAUL AND REPAIR WORK. BUSHEY DENIED LIABILITY BUT EVENTUALLY THE HARTFORD FIRE INSURANCE COMPANY, INSURER OF THE BUSHEY YARD, AGREED WITH ALPINE AND OURSELVES TO SETTLE THE CLAIM. ACCORDINGLY, ON MARCH 5, 1968, HARTFORD PAID TO ALPINE $500,000.00 AND ASSUMED ALL CHARGES BY BUSHEY APPLICABLE TO THE CLEANING AND MAINTENANCE OF THE SHIP FOLLOWING THE CASUALTY. IT WAS CONTEMPLATED THAT ALPINE WOULD USE THE FUNDS TO RECTIFY THE DAMAGE TO ANTON BRUUN IN ACCORDANCE WITH ARTICLE 15 (F) OF CONTRACT NSF-C-443.

FROM JULY 1, 1967, UNTIL MARCH 22, 1968, ANTON BRUUN REMAINED AT BUSHEY'S YARD. DURING MOST OF THIS PERIOD ALPINE MAINTAINED A TWENTY FOUR HOUR WATCH AND INCURRED OTHER EXPENSES IN CONNECTION WITH SURVEYING THE DAMAGE AND IN PREPARATION OF SPECIFICATIONS FOR REPAIR. IN ADDITION ALPINE INCURRED AND IS STILL INCURRING COSTS IN CONNECTION WITH MANAGEMENT AND OPERATION OF THE VESSEL SUCH AS THE SERVICES OF SENIOR OFFICIALS OF ALPINE, TRAVEL, TELEPHONE AND LEGAL FEES, ALL OF WHICH TOGETHER WITH OVERHEAD ARE REIMBURSABLE UNDER THE TERMS OF CONTRACT C-443 WHICH WILL, UNLESS FURTHER AMENDED, EXPIRE OCTOBER 31, 1968. * * *

YOUR LETTER GOES ON TO STATE THAT THE FOUNDATION IS NOW CONCERNED WITH THE DISPOSITION OF THE ANTON BRUUN AND THE PROCEEDS RESULTING FROM THE CASUALTY. ALTHOUGH THE GOVERNMENT OF INDIA HAS INFORMED THE UNITED STATES THAT IT NO LONGER WISHES THE ANTON BRUUN, IT IS CURRENTLY RECONSIDERING ITS DECISION. IN ADDITION, SEVERAL ALTERNATIVES ARE BEING CONSIDERED BY THE FOUNDATION, INCLUDING THE SALE OR GIFT OF THE VESSEL IN HER PRESENT CONDITION.

ASSUMING THE FOUNDATION DECIDES NOT TO RESTORE THE ANTON BRUUN, YOU REQUEST OUR OPINION ON THE EXPRESSED BELIEF THAT IT WOULD BE APPROPRIATE TO HAVE ALPINE REIMBURSE ITSELF FROM THE MONEY PAID BY HARTFORD FOR ITS EXPENSES UNDER CONTRACT C-443 FROM JULY 1, 1967, TO THE EXPIRATION OF THE CONTRACT WHENEVER THAT MAY OCCUR. IN THAT CONNECTION YOU INVITE OUR ATTENTION TO ARTICLE 15 (F) (4) OF CONTRACT NSF-C-443, WHICH AS POINTED OUT IS SUBSTANTIALLY THE SAME AS SECTION(G) (4) OF THE CLAUSE SET OUT IN PARAGRAPH 13.703, ARMED SERVICES PROCUREMENT REGULATION. ALSO, THE FOUNDATION CONTEMPLATES THE DEPOSIT IN THE TREASURY AS MISCELLANEOUS RECEIPTS OF THE CASUALTY MONEYS REMAINING ON COMPLETION OF CONTRACT NSF- 443.

THE REFERRED TO ARTICLE 15 (F) (4) OF THE CONTRACT PROVIDES: "IN THE EVENT THE CONTRACTOR IS INDEMNIFIED, REIMBURSED, OR OTHERWISE COMPENSATED FOR ANY LOSS OR DESTRUCTION OR DAMAGE TO THE GOVERNMENT PROPERTY, HE SHALL USE THE PROCEEDS TO REPAIR, RENOVATE OR REPLACE THE GOVERNMENT PROPERTY INVOLVED, OR SHALL CREDIT SUCH PROCEEDS AGAINST THE COST OF THE WORK COVERED BY THE CONTRACT, OR SHALL OTHERWISE REIMBURSE THE GOVERNMENT, AS DIRECTED BY THE CONTRACTING OFFICER. * * *" UNDER THAT PROVISION, READ IN THE LIGHT OF THE ENTIRE ARTICLE 15, GOVERNMENT PROPERTY, THE DISPOSITION OF THE PROCEEDS IS A MATTER FOR DETERMINATION BY THE CONTRACTING OFFICER, WHO IN THE EXERCISE OF THAT RESPONSIBILITY MUST NECESSARILY GIVE DUE CONSIDERATION TO STATUTORY GUIDES.

WHILE THE NATIONAL SCIENCE FOUNDATION HAS BEEN EMPOWERED "TO DO ALL THINGS NECESSARY" TO CARRY OUT THE PROVISIONS OF THE NATIONAL SCIENCE FOUNDATION ACT OF 1950, THAT AUTHORITY IS QUALIFIED BY THE PHRASE "WITHIN THE LIMITS OF AVAILABLE APPROPRIATIONS," 42 U.S.C. 1870. AND IN SITUATIONS IN WHICH THE APPROPRIATIONS OF THE NATIONAL SCIENCE FOUNDATION MAY BE AUGUMENTED, OR IMPLEMENTED, WE FIND THE EXISTENCE OF SPECIFIC STATUTORY PROVISIONS. THUS THE NATIONAL SCIENCE FOUNDATION ACT GRANTS THE FOUNDATION THE AUTHORITY "TO RECEIVE AND USE FUNDS DONATED BY OTHERS" (SECTION 1870 (F) (. SEE, ALSO, SECTION 1873 (H). AND RECENT APPROPRIATIONS FOR THE FOUNDATION CARRY THE PROVISION: "THAT RECEIPTS FOR SCIENTIFIC SUPPORT SERVICES AND MATERIALS FURNISHED BY THE NATIONAL RESEARCH CENTERS MAY BE CREDITED TO THIS APPROPRIATION," PUBLIC LAW 90- 121, APPROVED NOVEMBER 3, 1967, 81 STAT. 341, 350.

YOU ARE ADVISED WE PERCEIVE NO VALID BASIS FOR THE USE OF THE MONEYS RECEIVED BECAUSE OF THE PHYSICAL DAMAGE TO THE ANTON BRUUN FOR WHAT ARE ESSENTIALLY ADMINISTRATIVE OR MANAGEMENT EXPENSES OF THE FOUNDATION. SPECIFICALLY, WE ARE OF THE VIEW THE FOUNDATION, ASSUMING THE ANTON BRUUN IS NOT TO BE RESTORED, WOULD NOT BE JUSTIFIED IN SUBSTITUTING THE USE OF THE CASUALTY RECEIPTS FOR ITS APPROPRIATED FUNDS. RATHER, WE ARE OF THE OPINION THAT THE SUM COLLECTED FROM THE HARTFORD INSURANCE COMPANY SHOULD BE DEPOSITED INTO THE TREASURY OF THE UNITED STATES IN CONSONANCE WITH SECTION 3617, REVISED STATUES, 31 U.S.C. 484, GENERALLY REQUIRING THE GROSS AMOUNT OF ALL MONEYS RECEIVED FROM WHATEVER SOURCE FOR THE USE OF THE UNITED STATES TO BE DEPOSITED AND COVERED INTO THE TREASURY AS MISCELLANEOUS RECEIPTS. SEE 5 COMP. GEN. 928, 15 ID. 683; 22 ID. 1133; 47 ID. 70). THAT THE MONEYS RECEIVED FROM HARTFORD, EVEN THOUGH PAID TO ALPINE, WERE FOR THE USE OF THE UNITED STATES APPEARS OF LITTLE DOUBT UNDER THE TERMS OF THE CONTRACT AND THE SITUATION PRESENTED.