B-28129, DECEMBER 14, 1943, 23 COMP. GEN. 430

B-28129, DECEMBER 14, 1943, 23 COMP. GEN. 430

CONTRACTS - COST-PLUS - COMPENSATION PAID IN LIEU OF LEAVE ACCRUED BUT NOT TAKEN AT TIME OF EMPLOYEE'S DEATH WHERE A COST-PLUS-A-FIXED-FEE CONTRACT CONTAINS NO SPECIFIC PROVISION AUTHORIZING REIMBURSEMENT TO THE CONTRACTOR FOR COMPENSATION PAID IN LIEU OF LEAVE ACCRUED BUT NOT TAKEN BY AN EMPLOYEE AT THE TIME OF HIS DEATH, AND IT IS NOT SHOWN THAT SUCH PAYMENT WAS MADE PURSUANT TO REGULATIONS GOVERNING THE GRANTING OF LEAVE BENEFITS TO EMPLOYEES, OR SHOWN TO BE REASONABLY INCIDENT TO PERFORMANCE OF THE CONTRACT WORK AND SERVE A USEFUL PURPOSE IN FULFILLING THE CONTRACT REQUIREMENTS THERE IS NO LEGAL BASIS FOR REGARDING THE EXPENDITURE AS A PROPER CHARGE TO THE GOVERNMENT UNDER THE CONTRACT.

COMPTROLLER GENERAL WARREN TO COL. W. B. MILLER, U. S. ARMY, DECEMBER 14, 1943:

REFERENCE IS MADE TO YOUR LETTER OF NOVEMBER 5, 1943, AS FOLLOWS:

TRANSMITTED HEREWITH FOR ADVANCE DECISION IS VOUCHER IN THE AMOUNT OF $39.75 COVERING REIMBURSEMENT CLAIM OF THE AUSTIN COMPANY, OKLAHOMA CITY, OKLAHOMA. COST-1PLUS-A-1FIXED-1FEE CONTRACT NO. W-957-ENG-664, FOR EXCEPTION TAKEN ON PAYROLLS WITH RESPECT TO PAYMENT OF ANNUAL LEAVE ACCRUED TO THE CREDIT OF AN EMPLOYEE OF THE CONTRACTOR AT THE TIME OF EMPLOYEE'S DEATH.

CONTRACTOR STATES THAT EMPLOYEE WAS INJURED WHILE ON DUTY AND LOST HIS LIFE AS A DIRECT RESULT OF THE INJURY. CONTRACTOR FURTHER STATES THAT THERE WAS ACCRUED TO EMPLOYEE'S CREDIT A BALANCE OF 5 DAYS LEAVE BENEFIT IN LIEU OF SICKNESS OR VACATION LEAVE WHICH HAS BEEN PAID TO HIS WIDOW. THE CONTRACTING OFFICER STATES THAT PROPRIETY OF REIMBURSEMENT IS DOUBTED INASMUCH AS IT IS THE OPINION OF HIS OFFICE THAT REGULATIONS GOVERNING THE GRANTING OF LEAVE TO EMPLOYEES OF A COST-1PLUS-A-1FIXED-1FEE CONTRACTOR ARE PATTERNED CLOSELY AFTER CIVIL SERVICE REGULATIONS PERTAINING TO GOVERNMENT EMPLOYEES, AND SUCH REGULATIONS DO NOT PERMIT PAYMENT FOR LEAVE ACCRUED TO THE CREDIT OF A GOVERNMENT EMPLOYEE AT THE TIME OF HIS DEATH. ( COPIES OF CORRESPONDENCE ENCLOSED FOR READY REFERENCE).

THIS OFFICE DOUBTS PROPRIETY OF REIMBURSEMENT FOR THE SAME REASON SET FORTH BY THE CONTRACTING OFFICER.

PENDING RECEIPT OF DECISION, NO ACTION WILL BE TAKEN BY THIS OFFICE TOWARD PAYMENT OF THE ENCLOSED CLAIM WHICH HAS BEEN PRESENTED TO THE UNDERSIGNED, AN ACCOUNTABLE DISBURSING OFFICER, FOR PAYMENT.

THE VOUCHER INVOLVED COVERS THE AMOUNT CLAIMED BY THE CONTRACTOR AS HAVING BEEN PAID TO THE WIDOW OF AN EMPLOYEE, V. L. RUTHERFORD, AS FIVE DAYS' SALARY IN LIEU OF ACCRUED ANNUAL LEAVE TO HIS CREDIT AT THE TIME OF HIS INJURY AND DEATH ON FEBRUARY 19, 1943. IN SUPPORT THEREOF, AND AS A JUSTIFICATION FOR THE EXPENDITURE THE CONTRACTOR, IN HIS LETTER OF APRIL 3, 1943, STATES:

MR. V. L. RUTHERFORD WAS EMPLOYED ON THIS PROJECT IN A NON-MANUAL CAPACITY AND ENTITLED TO LEAVE BENEFITS IN ACCORDANCE WITH INSTRUCTIONS ISSUED BY THE DISTRICT ENGINEER, CONTRACTING OFFICER. (COPY OF INSTRUCTIONS ATTACHED).

MR. RUTHERFORD WAS INJURED WHILE ON DUTY STATUS AND LOST HIS LIFE AS A DIRECT RESULT OF THE INJURY. THERE WAS ACCRUED TO HIS CREDIT A BALANCE OF FIVE DAYS' LEAVE BENEFIT IN LIEU OF SICKNESS OR VACATION LEAVE WHICH HAS BEEN PAID TO HIS WIDOW.

1. UNDER THE LAWS OF THE STATE OF OKLAHOMA, INJURED EMPLOYEES CANNOT RECEIVE COMPENSATION INSURANCE PRIOR TO FIVE DAYS AFTER DISABILITY BEGINS. MR. RUTHERFORD WAS PAID FIVE DAYS LEAVE IN ACCORDANCE WITH PARAGRAPH (I) CONTAINED IN OUR PROCEDURAL DIRECTIVE BY THE DISTRICT ENGINEER FOR THE PERIOD OF DISABILITY NOT COVERED BY COMPENSATION INSURANCE.

2. THE U.S. ENGINEER DISTRICT OFFICE HAS ADVISED THROUGH THE AREA ENGINEER UNDER DATE OF MARCH 3, 1943, THAT---

"1. IN VIEW OF THE FACT THAT REGULATIONS GOVERNING THE GRANTING OF OF LEAVE TO EMPLOYEES OF A COST-PLUS-A-FIXED-FEE CONTRACTOR ARE PATTERNED CLOSELY AFTER CIVIL SERVICE REGULATIONS GOVERNING THE GRANTING OF LEAVE TO GOVERNMENT EMPLOYEES AND THE LATTER REGULATIONS DOT NOT PERMIT PAYMENT FOR LEAVE ACCRUED TO THE CREDIT OF A GOVERNMENT EMPLOYEE AT THE TIME OF HIS DEATH, IT IS THE OPINION OF THIS OFFICE THAT REIMBURSEMENT TO THE AUSTIN COMPANY WOULD NOT BE PROPER UNDER THE ABOVE DESCRIBED CIRCUMSTANCES.'

THE AUSTIN COMPANY IS NOT GOVERNED BY CIVIL SERVICE REGULATIONS BUT BY CONTRACT AS ADMINISTERED BY THE CONTRACTING OFFICER THROUGH HIS AUTHORIZED REPRESENTATIVE.

3. THE CIRCUMSTANCES OF THE SUBJECT CASE HAVE BEEN REVIEWED BY THE U.S. ENGINEER AREA OFFICE. THE ATTACHED FORM NO. T-5, REQUEST FOR LEAVE WITH PAY, HAS BEEN VERIFIED AND APPROVED THAT THE REQUESTED LEAVE IS IN ACCORDANCE WITH REGULATIONS, U.S. ENGINEER AREA OFFICE.

IN VIEW OF THE ABOVE FACTS, IT IS REQUESTED THAT VOUCHER FOR REIMBURSEMENT OF LEAVE PAYMENT TO MR. V. L. RUTHERFORD, ATTACHED HERETO, BE APPROVED FOR REIMBURSEMENT. PAYMENT TO THE WIDOW OF MR.RUTHERFORD HAS BEEN MADE IN GOOD FAITH IN AN ENDEAVOR TO FOLLOW INSTRUCTIONS CONTAINED IN THE GOVERNING DIRECTIVE ISSUED BY THE CONTRACTING OFFICER. THE REFERRED- TO DIRECTIVE RELATIVE TO EARNED VACATION TIME AND SICK LEAVE FOR EMPLOYEES IS EMBODIED IN A LETTER OF APRIL 30, 1942, FROM THE CONTRACTING OFFICER, ADDRESSED TO THE CONTRACTOR, WHEREIN HE EXPLAINS THE POLICY WITH RESPECT TO THE MATTER, IN PERTINENT PART AS FOLLOWS:

B. LEAVE SHALL ACCRUE WITH PAY AT THE RATE OF TWO DAYS FOR EACH FULL MONTH OF SERVICE IN LIEU OF ANY SICK OR VACATION ALLOWANCE.

F. EMPLOYEES WHO RESIGN, OR ARE INVOLUNTARILY SEPARATED FOR CAUSES NOT DUE TO THEIR OWN MISCONDUCT, SHALL BE ENTITLED TO ALL LEAVE TO AND INCLUDING DATE OF SEPARATION. (NOTE: INCOMPETENCE SHALL NOT BE DEEMED MISCONDUCT, PROVIDED THAT EMPLOYEE IS PERFORMING TO THE BEST OF HIS ABILITY).

I. LEAVE MAY NOT BE GRANTED FOR DAYS OF DISABILITY BECAUSE OF ACCIDENTS WHICH ARE COVERED BY COMPENSATION INSURANCE.

CONTRACT NO. W-957-ENG-664, DATED JANUARY 24, 1942, ENTERED INTO WITH THE AUSTIN COMPANY COVERS THE FURNISHING OF ARCHITECT-ENGINEER SERVICE BY THE CONTRACTOR FOR THE PREPARATION OF NECESSARY REPORTS, DESIGNS, DRAWINGS AND SPECIFICATIONS, AND REQUIRES THE CONTRACTOR TO DO ALL THINGS NECESSARY FOR THE CONSTRUCTION OF AN AIRPLANE ASSEMBLY PLANT AT OKLAHOMA CITY, OKLAHOMA, NOT PERFORMED BY THE GOVERNMENT OR UNDER CONTRACTS ENTERED INTO BY THE GOVERNMENT, IN CONSIDERATION OF REIMBURSEMENT BY THE GOVERNMENT OF THE CONTRACTOR'S COSTS, AS DEFINED IN THE CONTRACT, PLUS STIPULATED FIXED FEES. ARTICLE XI THEREOF SETS FORTH THE ITEMS OF COST FOR WHICH THE CONTRACTOR IS TO BE REIMBURSED, AND INCLUDES THE FOLLOWING:

A. ALL LABOR, MATERIALS, TOOLS, MACHINERY, EQUIPMENT, SUPPLIES, SERVICES, POWER AND FUEL NECESSARY FOR EITHER TEMPORARY OR PERMANENT USE FOR THE BENEFIT OF THE WORK.

H. SALARIES OF RESIDENT ENGINEERS, PRINCIPAL ASSISTANT ENGINEERS, ENGINEERS, ARCHITECTS, SUPERINTENDENTS, TIMEKEEPERS, FOREMEN, AND OTHER TECHNICAL ADMINISTRATIVE AND OTHER EMPLOYEES OF THE A-E-M DIRECTLY ENGAGED ON THE WORK WHETHER AT THE SITE OF THE WORK OR ELSEWHERE. IN CASE THE FULL TIME OF ANY EMPLOYEE OF THE A-E-M IS NOT APPLIED TO THE WORK, HIS SALARY SHALL BE INCLUDED IN THIS ITEM ONLY IN PROPORTION TO THE ACTUAL TIME APPLIED THERETO. NO PERSON SHALL BE ASSIGNED TO SERVICE BY THE A-E-M AS SUPERINTENDENT OF CONSTRUCTION, CHIEF ENGINEER, CHIEF ARCHITECT, CHIEF PURCHASING AGENT, CHIEF ACCOUNTANT, OR SIMILAR POSITION IN THE A-E-M'S FIELD ORGANIZATION, OR AS PRINCIPAL ASSISTANT TO ANY SUCH PERSON, UNTIL THERE HAS BEEN SUBMITTED TO AND APPROVED BY THE CONTRACTING OFFICER A STATEMENT OF THE QUALIFICATION, EXPERIENCE, AND SALARY OF THE PERSON PROPOSED FOR SUCH ASSIGNMENT. THE REGULAR SALARY OR COMPENSATION RATE OF ANY SUCH PERSON SHALL BE REIMBURSABLE ONLY TO THE EXTENT THAT IT IS NOT IN EXCESS OF THE HIGHEST SALARY OR COMPENSATION RATE RECEIVED BY HIM DURING THE YEAR PRECEDING THE DATE OF THIS CONTRACT PLUS SUCH INCREASE AS THE CONTRACTING OFFICER MAY APPROVE. THE PAYMENT OF ANY EXCESS OVER THE SCHEDULED AMOUNTS SHOWN IN THE APPROVED SALARY SCHEDULE AGREED TO AT THE TIME OF THE NEGOTIATIONS OF THIS CONTRACT SHALL NOT BE REIMBURSABLE, UNLESS AND UNTIL THE CHIEF OF THE SUPPLY ARMY OR SERVICE HAS SO APPROVED IN WRITING.

S. SUCH OTHER ITEMS NOT EXPRESSLY EXCLUDED BY OTHER PROVISIONS OF THIS CONTRACT AS SHOULD, IN THE OPINION OF THE CONTRACTING OFFICER, BE INCLUDED IN THE COST OF THE WORK. WHEN SUCH AN ITEM IS ALLOWED BY THE CONTRACTING OFFICER, IT SHALL BE SPECIFICALLY CERTIFIED AS BEING ALLOWED UNDER THIS PARAGRAPH.

CLAIM FOR REIMBURSEMENT OF THE EXPENDITURE APPEARS TO BE PREDICATED UPON THE SUPPOSITION THAT IT IS INCLUDED IN THE ITEM OF "LABOR" OR "SALARIES" OF EMPLOYEES ENGAGED ON THE CONTRACT WORK, WHEN CONSIDERED IN CONNECTION WITH THE LEAVE REGULATIONS APPLICABLE TO NONMANUAL EMPLOYEES REPORTED AS HAVING BEEN ESTABLISHED BY THE WAR DEPARTMENT, PARTICULARLY, PARAGRAPH (I) THEREOF, WHEREIN IT IS STATED THAT LEAVE (WITH PAY) MAY NOT BE GRANTED FOR DAYS OF DISABILITY BECAUSE OF ACCIDENTS WHICH ARE COVERED BY COMPENSATION INSURANCE. WHETHER SAID PARAGRAPH IS SUSCEPTIBLE TO THE CONSTRUCTION THAT LEAVE WITH PAY MIGHT BE GRANTED FOR DAYS OF DISABILITY BECAUSE OF ACCIDENTS WHICH ARE NOT COVERED BY COMPENSATION INSURANCE IS IMMATERIAL SINCE THE MATTER IS CLEARLY NOT ONE OF DISABILITY AS IT IS REPORTED THAT THE EMPLOYEE WAS INJURED ON FEBRUARY 19, 1943, AND DIED ON THAT DAY. THE WORD "DISABILITY" GENERALLY IMPLIES ON ACTUAL PHYSICAL EXISTENCE COUPLED WITH INABILITY TO WORK. SEE WORDS AND PHRASES, VOLUME 12, PAGES 511 TO 516. THEREFORE, THE MATTER RESOLVES ITSELF INTO A QUESTION WHETHER THE CONTRACTOR MAY BE REIMBURSED FOR COMPENSATION PAID IN LIEU OF LEAVE ACCRUED BUT NOT TAKEN BY THE EMPLOYEE AT THE TIME OF HIS DEATH.

IT DOES NOT APPEAR THAT THE CONTRACT CONTAINS ANY SPECIFIC PROVISION FOR REIMBURSEMENT OF AN EXPENDITURE SUCH AS HERE INVOLVED, AND AS WAS STATED IN 21 COMP. GEN. 466,"TO BE REIMBURSABLE BY THE GOVERNMENT, AS EXPENSE INCURRED BY THE CONTRACTOR, NOT OTHERWISE SPECIFICALLY PROVIDED FOR, MUST BE SHOWN TO BE REASONABLY INCIDENT TO THE PERFORMANCE OF THE WORK AND TO SERVE A USEFUL PURPOSE IN FULFILLING THE CONTRACT REQUIREMENTS.' MANIFESTLY AN EXPENDITURE COVERING PAYMENT TO THE WIDOW OF AN EMPLOYEE FOR LEAVE ACCRUED AT HIS DEATH AND FOR A PERIOD SUBSEQUENT THERETO DURING WHICH NO SERVICES WERE RENDERED MAY NOT BE REGARDED AS COMPLYING WITH THE STATED ESSENTIAL REQUISITES TO THE REIMBURSEMENT THEREOF BY THE GOVERNMENT.

SINCE, FOR THE REASONS STATED, THE EVIDENCE PRESENTED FAILS TO ESTABLISH THAT THE AMOUNT PAID BY THE CONTRACTOR WAS PURSUANT TO REGULATIONS GOVERNING THE GRANTING OF LEAVE BENEFITS TO EMPLOYEES, OR THAT THE INCURRENCE OF THIS EXPENSE SERVED A USEFUL PURPOSE SO FAR AS THE INTERESTS OF THE GOVERNMENT WERE CONCERNED, OR WAS IN ANY MANNER NECESSARY FOR THE PROPER PERFORMANCE OF THE CONTRACT WORK, THERE IS NO LEGAL BASIS FOR REGARDING THE EXPENDITURE AS A PROPER CHARGE TO THE GOVERNMENT UNDER THE TERMS OF THE CONTRACT INVOLVED.

ACCORDINGLY, THE VOUCHER, TOGETHER WITH ACCOMPANYING PAPERS, IS RETURNED HEREWITH, AND YOU ARE ADVISED THAT PAYMENT THEREON IS NOT AUTHORIZED.