B-28641, SEPTEMBER 19, 1942, 22 COMP. GEN. 250

B-28641, SEPTEMBER 19, 1942, 22 COMP. GEN. 250

CONTRACTS - COST-PLUS - TRAVELING EXPENSES OF CONTRACTORS' EMPLOYEES UNDER A COST-PLUS-A-FIXED-FEE CONTRACT PROVIDING THAT REIMBURSEMENT FOR TRANSPORTATION AND TRAVELING EXPENSES WILL BE LIMITED TO THE COST OF TRANSPORTATION AND AN ALLOWANCE OF $6 PER DAY IN LIEU OF ALL OTHER EXPENSES, THE CONTRACTOR MAY NOT BE REIMBURSED TO THE FULL EXTENT OF THE ALLOWANCE OF $6 PER DAY FOR TRAVEL OF AN EMPLOYEE UNLESS IT BE SHOWN THAT THE EMPLOYEE ACTUALLY WAS IN A TRAVEL STATUS FOR AN ENTIRE DAY AND THAT NOT LESS THAN $6 WAS PAID TO THE EMPLOYEE BY THE CONTRACTOR AS REIMBURSEMENT FOR THE EMPLOYEE'S TRAVEL EXPENSES FOR EACH SUCH DAY.

COMPTROLLER GENERAL WARREN TO THE SECRETARY OF WAR, SEPTEMBER 19, 1942:

I HAVE YOUR LETTER OF SEPTEMBER 1, 1942, AS FOLLOWS:

AT THE INCEPTION OF THE WAR PROGRAM, TRAVEL PROVISIONS OF CONTRACTS OF THE ORDNANCE DEPARTMENT FOR THE CONSTRUCTION AND OPERATION OF ORDNANCE PLANTS PROVIDED FOR REIMBURSEMENT TO THE CONTRACTOR ON THE ACTUAL EXPENSE BASIS.

THIS PROVISION WAS USED IN PREFERENCE TO THE STANDARDIZED GOVERNMENT TRAVEL REGULATIONS BECAUSE THE CONTRACTORS WE WERE DEALING WITH WERE ACCUSTOMED TO TRAVEL UNDER CIRCUMSTANCES NOT SO RESTRICTED. AFTER THE FIRST FEW CONTRACTS HAD BEEN NEGOTIATED, IT BECAME APPARENT, DUE TO DIFFICULTIES WITH DISBURSING OFFICERS, THAT THIS METHOD OF REIMBURSEMENT WOULD NOT BE SATISFACTORY, BECAUSE OF THE NECESSITY OF ITEMIZATION AND OBTAINING RECEIPTS IN SUBSTANTIATION OF CERTAIN DISBURSEMENTS MADE BY THE CONTRACTOR'S TRAVELERS.

TO OBVIATE THE NECESSITY OF THIS ITEMIZATION AND OBTAINING OF RECEIPTS BY TRAVELERS, AND AT THE SAME TIME TO COMPENSATE THE CONTRACTORS FOR EXPENDITURES IN CONNECTION WITH TRAVEL AS NEARLY AS POSSIBLE, IT WAS CONCLUDED THAT THE METHOD OF DETERMINING THE AMOUNT THE CONTRACTOR SHOULD RECEIVE SHOULD BE CHANGED.

WITH THIS OBJECTIVE IN MIND, AND THE FACT THAT IT WAS THE DESIRE OF THE CONTRACTOR AND THE ORDNANCE DEPARTMENT THAT THE CONTRACTORS' EMPLOYEES SHOULD BE PERMITTED TO TRAVEL IN CIRCUMSTANCES COMPARABLE WITH THE CONTRACTORS' ORGANIZATIONAL POLICY FOR TRAVEL WITHOUT DIMINUTION, AND THAT THE CONTRACTOR SHOULD COME OUT WHOLE WITH RESPECT TO NECESSARY TRAVEL, THE FOLLOWING PROVISION WAS NEGOTIATED IN SUBSEQUENT CONTRACTS:

"D. TRANSPORTATION AND TRAVELING EXPENSES TO AND FROM THE SITE OF THE PLANT OF THE NECESSARY FIELD FORCES FOR THE ECONOMICAL AND SUCCESSFUL PROSECUTION OF THE WORK; TRANSPORTATION AND TRAVELING EXPENSES OF SUCH OTHER EMPLOYEES OF THE CONTRACTOR WHOSE FULL TIME IS DEVOTED TO THE WORK UNDER THIS CONTRACT AS IS ACTUALLY INCURRED IN CONNECTION WITH SUCH WORK; AND COSTS AND EXPENSES REIMBURSED TO PERMANENT EMPLOYEES OF THE CONTRACTOR TRANSFERRED TO OR FROM THE PLANT ON ACCOUNT OF TRANSPORTATION OF THEMSELVES, THEIR FAMILIES AND THEIR HOUSEHOLD GOODS.

"REIMBURSEMENT FOR TRANSPORTATION AND TRAVELING EXPENSES WILL BE LIMITED TO THE COST OF TRANSPORTATION INCLUDING PULLMAN WHERE NECESSARY AND AN ALLOWANCE OF SIX DOLLARS ($6.00) PER DAY IN LIEU OF ALL OTHER EXPENSES. TRANSPORTATION BY AUTOMOBILE ON SUCH REQUIRED TRAVEL SHALL BE REIMBURSED AT THE RATE OF FIVE CENTS (?05) PER MILE AS REPRESENTING THE ACTUAL COST OF SUCH TRANSPORTATION.

"ALL TRAVEL SHALL BE EITHER AUTHORIZED OR APPROVED IN WRITING BY THE CONTRACTING OFFICER. SHOULD THE CONTRACTOR OR ANY REPRESENTATIVE THEREOF, REMAIN IN A TRAVEL STATUS IN EXCESS OF SIX (6) DAYS AT ANY ONE TIME, NOT INCLUDING THE TIME CONSUMED IN TRAVEL, THE COST FOR SUCH EXCESS TRAVEL STATUS SHALL BE AT THE EXPENSE OF THE CONTRACTOR, UNLESS OTHERWISE ORDERED IN WRITING BY THE CONTRACTING OFFICER.'

IT WILL BE NOTED FROM THE ABOVE QUOTATION THAT THE CONTRACTOR IS TO BE REIMBURSED FOR TRANSPORTATION AND TRAVELING EXPENSES AND HAVE AN ALLOWANCE OF SIX DOLLARS PER DAY IN LIEU OF ALL OTHER EXPENSES. IT WOULD SEEM PROPER AT THIS POINT TO STATE THAT AT THE TIME OF THE NEGOTIATION OF THIS PROVISION OF THE CONTRACT, IT WAS THE INTENTION OF THE NEGOTIATORS, BOTH GOVERNMENT AND CONTRACTOR, THAT THE CONTRACTOR WAS TO RECEIVE SIX DOLLARS PER DAY FOR EVERY DAY THE CONTRACTOR'S EMPLOYEES WERE IN A TRAVEL STATUS, REGARDLESS OF WHETHER THE CONTRACTOR PAID A GREATER OR LESSER AMOUNT TO THE TRAVELER, AND REGARDLESS OF WHAT PERIOD OF THE DAY WAS CONSUMED IN TRAVEL. THE CONTRACTOR WAS GIVEN AN ALLOWANCE OF SIX DOLLARS PER DAY BECAUSE OF THE FACT, AMONG OTHERS, THAT IN MANY INSTANCES THE CONTRACTOR'S EMPLOYEES, WHILE TRAVELING (ESPECIALLY THE HIGHER BRACKET EMPLOYEES) SPEND GREATLY IN EXCESS OF THIS FIGURE, FOR WHICH THE CONTRACTOR IN ITS NORMAL RELATIONS REIMBURSES THE EMPLOYEE, AND FURTHER, THE CONTRACT PROVIDES THAT " SHOULD THE CONTRACTOR OR ANY REPRESENTATIVE THEREOF REMAIN IN A TRAVEL STATUS IN EXCESS OF SIX (6) DAYS AT ANY ONE TIME, NOT INCLUDING THE TIME CONSUMED IN TRAVEL, THE COST OF SUCH EXCESS TRAVEL SHALL BE AT THE EXPENSE OF THE CONTRACTOR UNLESS OTHERWISE ORDERED IN WRITING BY THE CONTRACTING OFFICER.' THUS IT WILL BE SEEN THAT EVEN THOUGH THE CONTRACTOR MAY BENEFIT IN SOME INSTANCES, IT IS JUST AS LIKELY THAT HE WILL BE REQUIRED TO ABSORB A LIKE OR GREATER AMOUNT IN OTHERS. THIS MATTER WAS CONSIDERED IN DETAIL AT THE TIME THE DECISION WAS MADE TO USE THE CLAUSE CITED. THE CLEAR TERMS OF THE CONTRACT ARE TO BE IGNORED AND IT IS HELD THAT THE CONTRACTOR MAY ONLY CLAIM THE AMOUNT THAT HE ACTUALLY PAYS TO HIS EMPLOYEES, THAT IS, SIX DOLLARS OR LESS, IT WOULD SEEM JUST AS LOGICAL AND EQUITABLE TO HOLD THAT THE CONTRACTOR IS ENTITLED TO THE AMOUNT HE SPENDS IN EXCESS OF THE SIX DOLLAR LIMITATION FOR THAT IS THE BASIS UPON WHICH THE CONTRACTOR AGREED TO THE LIMITATION OF SIX DOLLARS PER DAY. IF ONE FAILS, THE OTHER FAILS. THIS WAS NOT CONTEMPLATED FOR THE REASON THAT THERE WOULD IMMEDIATELY ARISE THE NECESSITY FOR ITEMIZATION AND THE OBTAINING OF RECEIPTS, THE VERY REQUIREMENTS THAT IT WAS DESIRED TO AVOID.

INASMUCH AS THIS IS AN ALLOWANCE TO THE CONTRACTOR, NEGOTIATED AND FIXED, AND NOT A MATTER OF REIMBURSEMENT CONTINGENT ON THE DISBURSEMENT OF A SPECIFIED AMOUNT TO THE TRAVELER BY THE CONTRACTOR, IT IS THE CONTENTION OF THE ORDNANCE DEPARTMENT THAT IT MAKES NO DIFFERENCE WHETHER THE CONTRACTOR ACTUALLY PAYS A GREATER OR LESSER AMOUNT TO THE TRAVELER OR WHAT PORTION OF THE DAY IS CONSUMED IN TRAVEL, THAT THE CONTRACTOR SHOULD BE REQUIRED UNDER THIS PROVISION OF THE CONTRACT TO SUPPORT HIS CLAIM FOR THE SIX DOLLARS PER DIEM, ONLY WITH EVIDENCE SUFFICIENT TO ESTABLISH THE FACT THAT THE TRAVELER WAS IN A TRAVEL STATUS ON THE DAYS CLAIMED BY THE CONTRACTOR WHETHER FOR A FULL DAY OR LESS, AND THAT SUCH TRAVEL WAS PROPERLY AUTHORIZED OR APPROVED BY THE CONTRACTING OFFICER.

WHEN IT IS CONSIDERED THAT MANY OF THE CONTRACTOR'S EMPLOYEES SPENT GREATLY IN EXCESS OF SIX DOLLARS PER DAY, AND THAT THE CONTRACTOR UNDER THE TERMS OF THE CONTRACT MAY BE REQUIRED TO ABSORB THIS AND ANY PER DIEM IN EXCESS OF THE SIX DAY LIMITATION, IT WILL READILY BE SEEN THAT THIS FIGURE AS AN AVERAGE COST FOR PER DIEM, REGARDLESS OF WHETHER THE CONTRACTOR PAYS A GREATER OR LESSER AMOUNT TO THE TRAVELER, IS NOT EXCESSIVE.

DUE TO THE FACT THAT DISBURSING OFFICERS ARE ATTEMPTING TO APPLY THE STANDARDIZED GOVERNMENT TRAVEL REGULATIONS AND DECISIONS OF YOUR OFFICE ON THE SUBJECT, THE ORDNANCE DEPARTMENT HAS EXPERIENCED SOME DIFFICULTY IN REIMBURSING CONTRACTORS ON THE CONTRACTUAL BASIS OF AN ALLOWANCE WHERE IT IS NOT SHOWN TO THE SATISFACTION OF SUCH DISBURSING OFFICERS THAT THE CONTRACTOR PAID THE SIX DOLLARS TO THE TRAVELER. IN THIS CONNECTION, SEE B-22344, DATED DECEMBER 22, 1941, WHEREIN IT IS STATED AS FOLLOWS:

"SINCE AS UNDERSTOOD, THE PERSONS HERE INVOLVED ARE NOT OFFICERS OR EMPLOYEES OF THE UNITED STATES, THEY WOULD NOT COME WITHIN THE TERMS OF THE SUBSISTENCE EXPENSE ACT OF 1926, 44 STAT. 688, AS AMENDED BY THE ACT OF JUNE 30, 1932, 47 STAT. 405, WHICH SUBSISTENCE ACT IS LIMITED TO ,CIVILIAN OFFICERS AND EMPLOYEES OF THE DEPARTMENTS AND ESTABLISHMENTS" OR WITHIN THE PROVISIONS OF THE STANDARDIZED GOVERNMENT TRAVEL REGULATIONS, WHICH ARE LIMITED TO "CIVILIAN OFFICIALS AND EMPLOYEES OF THE SEVERAL EXECUTIVE DEPARTMENTS AND INDEPENDENT ESTABLISHMENTS.'" SEE ALSO, B- 21165, DATED NOVEMBER 3, 1941, WHEREIN IT IS STATED AS FOLLOWS:

"IF--- AS IT IS ASSUMED--- MR. BOND WAS NOT AN OFFICER OR EMPLOYEE OF THE UNITED STATES DURING THE TRAVEL TIME INVOLVED, HIS TRANSPORTATION AND TRAVELING EXPENSES WERE NOT SUBJECT TO THE GENERAL RESTRICTIONS PRESCRIBED BY STATUTE, THE STANDARDIZED GOVERNMENT TRAVEL REGULATIONS, AND THE RULES STATED IN THE DECISIONS OF THIS OFFICE THEREUNDER, APPLICABLE TO OFFICERS AND EMPLOYEES OF THE UNITED STATES, BUT HIS RIGHT TO REIMBURSEMENT IS GOVERNED BY THE TERMS OF THE AGREEMENT UNDER WHICH THE TRAVEL WAS PERFORMED.'

SINCE THE TERMS OF THE AGREEMENT UNDER WHICH THE TRAVEL WAS PERFORMED ARE THAT THE CONTRACTOR IS TO HAVE AN ALLOWANCE OF SIX DOLLARS PER DAY FOR EVERY DAY OR FRACTIONAL PART OF DAY HIS EMPLOYEES ARE IN A TRAVEL STATUS, AND SINCE THE CONTRACTOR IS AN INDEPENDENT CONTRACTOR AND NOT AN AGENCY OF THE GOVERNMENT, WHOSE EMPLOYEES ARE NOT EMPLOYEES OF THE UNITED STATES (SEE ALABAMA V. KING AND BOOZER, ET AL, 314 U.S. 1), IT WOULD SEEM CLEAR THAT THE STANDARDIZED GOVERNMENT TRAVEL REGULATIONS AND THE RULES STATED IN THE DECISIONS OF YOUR OFFICE THEREUNDER ARE INDISPUTABLY NOT FOR APPLICATION. THIS BEING TRUE, WHERE THEN ARE WE TO LOOK FOR GUIDANCE OTHER THAN TO THE PROVISIONS OF THE CONTRACT, AND THE INTENT OF THE CONTRACTING PARTIES.

IN VIEW OF THE ABOVE, AND THE FACT THAT THIS OFFICE HAS NUMEROUS CONTRACTORS' REIMBURSEMENT VOUCHERS INVOLVING THIS QUESTION, RUNNING INTO LARGE SUMS OF MONEY, AND IS UNABLE TO EFFECTUATE PAYMENT TO THE CONTRACTORS, YOUR EARLY DECISION ON THE MATTER WILL BE GREATLY APPRECIATED.

IT IS UNDERSTOOD THAT THE MAIN QUESTION INVOLVED HERE IS AS TO WHETHER, UNDER THE QUOTED CONTRACT PROVISION, A PRIME CONTRACTOR IS ENTITLED TO BE PAID THE FULL AMOUNT OF $6 SPECIFIED THEREIN AS A PER DIEM ALLOWANCE FOR ALL TRAVELING EXPENSES--- OTHER THAN TRANSPORTATION COSTS--- FOR EACH DAY AN EMPLOYEE PERFORMS TRAVEL IN CONNECTION WITH THE CONTRACT WORK DESPITE THE FACT THAT THE PRIME CONTRACTOR MAY NOT HAVE REIMBURSED THE EMPLOYEE TO THE EXTENT OF THE FULL AMOUNT OF $6 PER DAY, EITHER BECAUSE HE WAS NOT IN A TRAVEL STATUS FOR AN ENTIRE DAY OR FOR SOME OTHER REASON. HOWEVER, NO REFERENCE IS MADE TO ANY PARTICULAR CONTRACT NOR TO THE FACTS PERTAINING TO ANY PARTICULAR VOUCHER WHICH HAS BEEN PRESENTED FOR PAYMENT INVOLVING THE QUESTION. IN THIS CONNECTION, IT MAY BE SAID THAT THE DETERMINATION OF THE TYPES AND AMOUNTS OF EXPENSES FOR WHICH A PRIME CONTRACTOR IS TO BE REIMBURSED BY THE GOVERNMENT UNDER A "COST-PLUS" CONTRACT IS DEPENDENT PRIMARILY ON THE TERMS OF THE PARTICULAR CONTRACT INVOLVED AND ON THE FACTS PERTAINING TO A PARTICULAR TRANSACTION RATHER THAN ON THE BASIS OF ANY GENERAL THEORIES RELATING TO THE STATUS OF COST-PLUS-A-FIXED-FEE CONTRACTORS OR THEIR EMPLOYEES. SEE ALABAMA V. KING AND BOOZER, ET AL., 314 U.S. 1; 20 COMP. GEN. 632, AND 21 COMP. GEN. 273, 835. MOREOVER, IT IS A RULE OF CONTRACT CONSTRUCTION--- SO WELL ESTABLISHED THAT THE CITATION OF AUTHORITIES WOULD APPEAR UNNECESSARY--- THAT THE INTENT AND MEANING OF A CONTRACT ARE NOT TO BE DETERMINED BY THE CONSIDERATION OF AN ISOLATED SECTION OR PROVISION THEREOF BY ITSELF, BUT THAT THE CONTRACT IS TO BE CONSIDERED IN ITS ENTIRETY AND EACH PROVISION IS TO BE CONSTRUED IN ITS RELATIONSHIP TO OTHER PROVISIONS AND IN THE LIGHT OF THE GENERAL PURPOSE INTENDED TO BE ACCOMPLISHED BY THE CONTRACTING PARTIES. 13 C.J. 525; 17 C.J.S. 707, AND CASES CITED THEREIN.

THEREFORE, AS A BASIS FOR ANSWERING THE QUESTION PRESENTED, THERE HAS BEEN CONSIDERED--- AS REPRESENTATIVE OF THE CURRENT TYPE OF "COST PLUS" CONTRACT BEING USED BY THE ORDNANCE DEPARTMENT--- CONTRACT NO. W ORD-635 DATED MARCH 31, 1942, WITH THE SUNBEAM ELECTRIC MANUFACTURING COMPANY. ARTICLE III-A THEREOF, ENTITLED " REIMBURSEMENT FOR CONTRACTOR'S EXPENDITURES," PROVIDES AS OLLOWS:

1. THE CONTRACTOR SHALL BE REIMBURSED IN THE MANNER HEREINAFTER DESCRIBED FOR SUCH OF ITS ACTUAL EXPENDITURES IN THE PERFORMANCE OF THE WORK UNDER THIS CONTRACT, AS MAY BE APPROVED OR RATIFIED BY THE CONTRACTING OFFICER, AND AS ARE INCLUDED IN BUT NOT LIMITED TO THE FOLLOWING ITEMS:

D. * * *

REIMBURSEMENT FOR TRANSPORTATION AND TRAVELING EXPENSES WILL BE LIMITED TO THE COST OF TRANSPORTATION, INCLUDING PULLMAN WHERE NECESSARY AND AN ALLOWANCE OF SIX DOLLARS ($6.00) PER DAY IN LIEU OF ALL OTHER EXPENSES. TRANSPORTATION BY AUTOMOBILE ON SUCH REQUIRED TRAVEL SHALL BE REIMBURSED AT THE RATE OF FIVE CENTS ($0.05) PER MILE AS REPRESENTING THE ACTUAL COST OF SUCH TRANSPORTATION.

ALL TRAVEL SHALL BE EITHER AUTHORIZED OR APPROVED IN WRITING BY THE CONTRACTING OFFICER. SHOULD THE CONTRACTOR OR ANY REPRESENTATIVE THEREOF, REMAIN IN A TRAVEL STATUS IN EXCESS OF SIX (6) DAYS AT ANY ONE TIME, NOT INCLUDING THE TIME CONSUMED IN TRAVEL, THE COST FOR SUCH EXCESS TRAVEL STATUS SHALL BE AT THE EXPENSE OF THE CONTRACTOR, UNLESS OTHERWISE ORDERED IN WRITING BY THE CONTRACTING OFFICER.

IT WILL BE NOTED THAT THE TWO CLAUSES LAST ABOVE QUOTED ARE IDENTICAL WITH THE TWO CLAUSES QUOTED IN YOUR LETTER WHICH ARE MATERIAL TO THE POINT HERE UNDER CONSIDERATION. IT IS STATED IN YOUR LETTER THAT AT THE TIME THE PROVISION IN QUESTION WAS NEGOTIATED IT WAS THE INTENTION, BOTH OF THE CONTRACTORS AND OF THE REPRESENTATIVES OF THE ORDNANCE DEPARTMENT, THAT THE CONTRACTORS WERE TO RECEIVE $6 PER DAY FOR EVERY DAY THEIR EMPLOYEES WERE IN A TRAVEL STATUS, REGARDLESS OF WHETHER THE CONTRACTORS PAID A GREATER OR LESSER AMOUNT TO THE EMPLOYEES, AND REGARDLESS OF WHAT PERIOD OF THE DAY WAS CONSUMED IN TRAVEL. IN OTHER WORDS, IT IS URGED THAT THE $6 PER DAY WAS INTENDED TO CONSTITUTE AN ARBITRARY ALLOWANCE TO THE CONTRACTORS RATHER THAN A MATTER OF REIMBURSEMENT UPON A SHOWING THAT SAID AMOUNT ACTUALLY WAS DISBURSED BY THE CONTRACTORS. ACCORDINGLY, IT IS CONTENDED BY THE ORDNANCE DEPARTMENT THAT, UNDER THE CONTRACT PROVISION INVOLVED, IN ORDER FOR A CONTRACTOR TO BE ENTITLED TO THE ALLOWANCE OF $6 PER DAY, THERE NEED ONLY BE SHOWN THAT AN EMPLOYEE WAS IN A TRAVEL STATUS ON A PARTICULAR DAY, WHETHER FOR A FULL DAY OR LESS, AND THAT SUCH TRAVEL WAS PROPERLY AUTHORIZED OR APPROVED BY THE CONTRACTING OFFICER.

HOWEVER, IT IS READILY SEEN FROM THE TERMS OF ARTICLE III-A, PARAGRAPH 1 OF THE CONTRACT, SUPRA, THAT THE GENERAL INTENTION AND PURPOSE OF THE PARTIES THERETO WAS TO REIMBURSE THE CONTRACTOR FOR THE ACTUAL EXPENDITURES INCURRED BY IT IN THE PERFORMANCE OF THE WORK COVERED BY THE CONTRACT. SUCH PURPOSE AND INTENTION, OF COURSE, CONSTITUTE THE VERY ESSENCE OF A "COST-PLUS" CONTRACT. IT APPEARS FURTHER THAT SUBPARAGRAPH D, SUPRA, EXPRESSLY PROVIDES THAT "REIMBURSEMENT" FOR TRAVELING EXPENSES WILL BE LIMITED TO AN ALLOWANCE OF $6 PER DAY IN LIEU OF ALL EXPENSES OTHER THAN FOR TRANSPORTATION. THEREFORE, WHEN THE TERMS OF SUBPARAGRAPH D OF PARAGRAPH 1 OF ARTICLE III-A ARE CONSIDERED, EITHER BY THEMSELVES OR IN CONNECTION WITH THE TERMS OF THE FIRST CLAUSE OF SAID PARAGRAPH 1, IT IS APPARENT FROM THE PLAIN AND UNAMBIGUOUS LANGUAGE USED BY THE PARTIES THAT THE PURPOSE OF SAID SUBPARAGRAPH D WAS NOT TO PROVIDE FOR AN ARBITRARY ALLOWANCE OF $6 TO THE CONTRACTOR FOR EACH DAY AN EMPLOYEE MAY HAVE BEEN IN A TRAVEL STATUS, REGARDLESS OF THE TIME SPENT IN TRAVELING OR REGARDLESS OF WHETHER THE CONTRACTOR REIMBURSED THE TRAVELER THE FULL AMOUNT OF $6, BUT THAT ITS PURPOSE WAS (1) TO PROVIDE FOR THE ALLOWANCE OF SAID SUM TO THE CONTRACTOR AS A REIMBURSEMENT OF AMOUNTS PAID BY IT TO ITS EMPLOYEES IN LIEU OF ALL ACTUAL EXPENSES OF TRAVEL, EXCEPT TRANSPORTATION COSTS, INCURRED BY THEM DURING THE COURSE OF A DAY'S TRAVEL AND (2) TO FIX A LIMITATION ON THE EXTENT TO WHICH SUCH EXPENSES WOULD BE REIMBURSED TO THE CONTRACTOR BY THE GOVERNMENT, NAMELY $6 PER DAY.

HOWEVER, THERE IS NOTHING IN SUBPARAGRAPH D, OR ELSEWHERE IN THE CONTRACT, INDICATING THAT THE PARTIES INTENDED ALLOWANCE OF THE ENTIRE SUM OF $6 TO THE CONTRACTOR WHETHER OR NOT AN EMPLOYEE WAS IN A TRAVEL STATUS FOR AN ENTIRE DAY AND WHETHER OR NOT THE AMOUNT PAID TO THE EMPLOYEE BY THE CONTRACTOR AS REIMBURSEMENT FOR TRAVELING EXPENSES WAS LESS THAN $6 PER DAY. SAID PROVISION EXPRESSLY STIPULATES THAT THE CONTRACTOR WILL BE ALLOWED $6 "PER DAY," AND NOT THAT $6 IS TO BE ALLOWED FOR ANY DAY OR FRACTION THEREOF THAT AN EMPLOYEE OF THE CONTRACTOR IS IN A TRAVEL STATUS. FURTHERMORE, THERE IS NOTHING IN THE LANGUAGE OF SUBPARAGRAPH D, OR ELSEWHERE IN THE CONTRACT, FROM WHICH IT CAN BE SAID THAT THE IMPLIED INTENTION OF THE PARTIES WAS TO PROVIDE FOR AN ARBITRARY ALLOWANCE OF $6 PER DAY TO THE CONTRACTOR FOR EACH DAY OR PART THEREOF THAT AN EMPLOYEE TRAVELED. ON THE CONTRARY, WHEN IT IS CONSIDERED THAT THE PRIMARY PURPOSE OF THE PARTIES TO THE CONTRACT WAS TO REIMBURSE THE CONTRACTOR FOR ITS ACTUAL EXPENDITURES, AND WHEN THERE IS CONSIDERED THE FACT THAT THE SUM OF $6 PER DAY REPRESENTS THE APPROXIMATE AMOUNT OF EXPENSES AN EMPLOYEE WOULD INCUR DURING AN ENTIRE DAY'S TRAVEL, THE ONLY REASONABLE INTERPRETATION THAT CAN BE GIVEN TO THE PROVISION IS THAT THE ALLOWANCE OF $6 WAS INTENDED TO SERVE AS THE MEASURE OF REIMBURSEMENT FOR AN ENTIRE DAY'S TRAVEL. IN THIS CONNECTION IT MAY BE SAID THAT AN ALLOWANCE OF AN ARBITRARY AMOUNT TO A CONTRACTOR IN LIEU OF ACTUAL EXPENSES OR COSTS PAID BY IT--- EVEN IF SHOWN TO HAVE BEEN CONTEMPLATED--- WOULD BE CONTRARY TO THE ESSENCE OF A "COST-PLUS" CONTRACT.

CONSIDERATION HAS BEEN GIVEN TO THE STATEMENT IN YOUR LETTER THAT IT WAS THE INTENTION OF THE ORDNANCE DEPARTMENT AND THE CONTRACTORS THAT CONTRACTORS WERE TO BE PAID AN ALLOWANCE OF $6 FOR ANY DAY THAT AN EMPLOYEE WAS IN A TRAVEL STATUS REGARDLESS OF THE FACT THAT THE EMPLOYEE WAS TRAVELING FOR PART OF A DAY, ONLY, AND OF THE FURTHER FACT THAT THE CONTRACTOR DID NOT REIMBURSE THE EMPLOYEE TO THE FULL EXTENT OF $6. HOWEVER, AS APPEARS FROM THE FOREGOING, THERE IS NOTHING IN THE TERMS OF THE CONTRACT INDICATING THAT SUCH WAS THE INTENTION OF THE PARTIES. THE CONTRARY, THE PLAIN TERMS OF THE CONTRACT SHOW THAT THE PARTIES INTENDED THE ALLOWANCE OF $6 PER DAY TO SERVE AS A MEASURE OF REIMBURSEMENT TO THE CONTRACTOR FOR THE AMOUNT PAID BY IT IN LIEU OF THE ACTUAL TRAVELING EXPENSES WHICH MIGHT BE INCURRED BY AN EMPLOYEE DURING THE COURSE OF AN ENTIRE DAY'S TRAVEL. EVEN IF IT COULD BE ESTABLISHED THAT THERE WAS A SECRET UNDERSTANDING OR INTENTION OF THE ORDNANCE DEPARTMENT AND THE CONTRACTORS THAT THE PROVISION WOULD BE CONSTRUED AS PROVIDING AN ARBITRARY ALLOWANCE OF $6 FOR EACH DAY OR PART OF A DAY AN EMPLOYEE OF THE CONTRACTOR WAS IN A TRAVEL STATUS, SUCH UNDERSTANDING CANNOT BE ACCEPTED TO VARY THE PLAIN INTENT OF THE PARTIES AS EXPRESSED IN THE CONTRACT. SEE COLD BLAST TRANSPORTATION CO. V. KANSAS CITY BOLT, ETC., CO., 114 FED. 77 AND 13 C.J. 523.

ALSO, WHILE IT MAY BE THAT THE TRAVELING EXPENSES OF CERTAIN EMPLOYEES OF THE CONTRACTOR EXCEED $6 PER DAY SUCH FACT AFFORDS NO BASIS FOR THE GOVERNMENT'S PAYING THE CONTRACTOR THE FULL AMOUNT OF $6 PER DAY IN THOSE CASES WHERE THE ACTUAL AMOUNTS REQUIRED TO BE PAID BY A CONTRACTOR TO ITS EMPLOYEES IS LESS THAN $6 PER DAY. IN THIS CONNECTION IT IS NOTED THAT SUBPARAGRAPH D, ARTICLE III-A, STIPULATES SPECIFICALLY THAT:

REIMBURSEMENT * * * WILL BE LIMITED TO THE COST OF TRANSPORTATION, INCLUDING PULLMAN WHERE NECESSARY AND AN ALLOWANCE OF SIX DOLLARS ($6.00) PER DAY IN LIEU OF ALL OTHER EXPENSES. * * * ( ITALICS SUPPLIED.) THEREFORE, IF DESPITE THIS SPECIFIC LIMITATION ON THE GOVERNMENT'S OBLIGATION FOR REIMBURSEMENT FOR TRAVEL EXPENSES, A CONTRACTOR PERMITS ITS EMPLOYEES TO INCUR EXPENSES IN EXCESS OF $6 PER DAY WHILE TRAVELING, THE EXCESS IS TO BE BORNE BY THE CONTRACTOR OR ITS EMPLOYEES RATHER THAN BY THE UNITED STATES.

FURTHERMORE, WHILE IT IS PROVIDED IN SUBPARAGRAPH D, SUPRA, THAT IF THE CONTRACTOR OR ONE OF ITS EMPLOYEES REMAINS IN A TRAVEL STATUS IN EXCESS OF SIX DAYS AT ANY ONE TIME THE COST FOR SUCH EXCESS SHALL BE AT THE EXPENSE OF THE CONTRACTOR, IT IS PROVIDED FURTHER THAT THE EXPENSE WILL BE BORNE BY THE UNITED STATES IF THE TRAVEL IS ORDERED IN WRITING BY THE CONTRACTING OFFICER. IN THIS CONNECTION IT MAY BE PRESUMED THAT THE CONTRACTING OFFICER WILL ORDER IN WRITING ANY TRAVEL WHICH IS SHOWN TO BE NECESSARY TO THE PERFORMANCE OF THE CONTRACT EVEN THOUGH SUCH TRAVEL MAY EXCEED SIX DAYS AT ONE TIME.

ACCORDINGLY, IN ANSWER TO THE QUESTION PRESENTED IN YOUR LETTER, YOU ARE ADVISED THAT UNDER CONTRACTS CONTAINING PROVISIONS SIMILAR TO THOSE OF CONTRACT NO. W-ORD-635, SUPRA, THERE IS NO AUTHORITY OR LAW FOR REIMBURSING CONTRACTORS TO THE FULL EXTENT OF THE ALLOWANCE OF $6 PER DAY PROVIDED IN SUBPARAGRAPH D UNLESS IT BE SHOWN THAT THE EMPLOYEE ACTUALLY WAS IN A TRAVEL STATUS FOR AN ENTIRE DAY AND THAT NOT LESS THAN $6 WAS PAID TO THE EMPLOYEE BY THE CONTRACTOR AS REIMBURSEMENT FOR THE EMPLOYEE'S TRAVEL EXPENSES FOR EACH SUCH DAY.