Skip to Highlights
Highlights

IT WOULD BE PROPER TO CHARGE THE CONTRACT UNDER WHICH RECOVERY HAD BEEN MADE SINCE SEVERAL COST-PLUS CONTRACTS WERE IN EXISTENCE AT TIME (1959). CROWDER: REFERENCE IS MADE TO YOUR LETTER OF JANUARY 23. 217.83 AND $780.61 WERE RECLAIMED ON THE BASIS OF OUR DECISION. WHEREIN IT WAS DETERMINED THAT ALLOCATED PORTIONS OF THE COMPANY'S FISCAL- YEAR 1959 EXPENSES IN PREPARING AND MAINTAINING EXHIBITS AT INTERNATIONAL AERONAUTICAL EXPOSITIONS. PROVIDED THAT AN ADMINISTRATIVE REVIEW OF THE CONTRACTS UNDER WHICH THE RELATED PORTIONS OF THE COMPANY'S FISCAL YEARS 1958 AND 1959 OVERHEAD COSTS WERE REIMBURSED DISCLOSED THAT THEIR PROVISIONS ARE SIMILAR TO THE PROVISIONS OF CONTRACT NO. IT IS REPORTED THAT THE ADMINISTRATIVE REVIEW AND DETERMINATION AS REQUIRED BY OUR DECISION OF DECEMBER 5.

View Decision

B-157310, FEB. 7, 1968

CONTRACTS - PAYMENTS - CONTRACT IDENTIFICATION DECISION TO CONTRACTING OFFICER, DEFENSE SUPPLY AGENCY CONCERNING PAYMENT ON RECLAIMS OF DOUGLAS AIRCRAFT CO. UNDER COST-PLUS-FIXED-FEE CONTRACTS WITH AIR FORCE. AN AMOUNT WHICH REPRESENTS PART OF AN AMOUNT COLLECTED AS RESULT OF AUDIT EXCEPTION TO CERTAIN OVERHEAD EXPENSES OF COST-PLUS-FIXED-FEE CONTRACTOR MAY BE RETURNED TO THE CONTRACTOR, EVEN THOUGH THE PARTICULAR CONTRACT CANNOT BE IDENTIFIED, AND IT WOULD BE PROPER TO CHARGE THE CONTRACT UNDER WHICH RECOVERY HAD BEEN MADE SINCE SEVERAL COST-PLUS CONTRACTS WERE IN EXISTENCE AT TIME (1959).

TO MR. CROWDER:

REFERENCE IS MADE TO YOUR LETTER OF JANUARY 23, 1968 (DCRTROC), RELATIVE TO OUR DECISION DATED DECEMBER 5, 1967, WHICH CONCERNED THE QUESTION WHETHER PAYMENT SHOULD BE MADE ON VOUCHERS IN THE AMOUNTS OF $2,217.83 AND $780.61, COVERING RECLAIMS OF THE DOUGLAS AIRCRAFT COMPANY, TULSA DIVISION, UNDER AIR FORCE COST-PLUS-A-FIXED-FEE CONTRACT NOS. AF 04/607/- 2062 AND AF 01/601/-52664.

THE CLAIMS INVOLVE PORTIONS OF SUMS COLLECTED FROM THE DOUGLAS AIRCRAFT COMPANY AS THE RESULT OF NOTICES OF EXCEPTION ISSUED BY OUR OFFICE WHICH QUESTIONED THE REIMBURSEMENT OF PORTIONS OF CERTAIN OF THE COMPANY'S OVERHEAD EXPENSES DURING ITS FISCAL YEARS 1958 AND 1959 UNDER AIR FORCE COST-PLUS-A-FIXED-FEE CONTRACTS. THE SUMS OF $2,217.83 AND $780.61 WERE RECLAIMED ON THE BASIS OF OUR DECISION, B 157310, FEBRUARY 7, 1966, WHEREIN IT WAS DETERMINED THAT ALLOCATED PORTIONS OF THE COMPANY'S FISCAL- YEAR 1959 EXPENSES IN PREPARING AND MAINTAINING EXHIBITS AT INTERNATIONAL AERONAUTICAL EXPOSITIONS, AND IN MAKING PAYMENT OF INTEREST ON DEBENTURE BONDS, REASONABLY COULD BE CONSIDERED AS ALLOWABLE COSTS UNDER AIR FORCE CONTRACT NO. AF 04/645/ 65. WE AGREED THAT PAYMENT ON THE RECLAIM VOUCHERS FOR $2,217.83 AND $780.61 SHOULD BE MADE, PROVIDED THAT AN ADMINISTRATIVE REVIEW OF THE CONTRACTS UNDER WHICH THE RELATED PORTIONS OF THE COMPANY'S FISCAL YEARS 1958 AND 1959 OVERHEAD COSTS WERE REIMBURSED DISCLOSED THAT THEIR PROVISIONS ARE SIMILAR TO THE PROVISIONS OF CONTRACT NO. AF 04/645/-65 WITH RESPECT TO THE MATTER OF DETERMINING ALLOWABLE PERFORMANCE COSTS.

IT IS REPORTED THAT THE ADMINISTRATIVE REVIEW AND DETERMINATION AS REQUIRED BY OUR DECISION OF DECEMBER 5, 1967, HAS BEEN MADE IN REGARD TO THE RECLAIM VOUCHER FOR $2,217.83 AND THAT THE VOUCHER HAS BEEN PROCESSED FOR PAYMENT. HOWEVER, IN VIEW OF THE CIRCUMSTANCES RELATING TO THE AUDIT EXCEPTION WHICH WAS MADE APPLICABLE TO A PAYMENT UNDER CONTRACT NO. AF 01/601/-52664, THE RECLAIM VOUCHER FOR $780.61 HAS BEEN RESUBMITTED FOR FURTHER DETERMINATION AS TO THE PROPRIETY OF MAKING PAYMENT OF THE RECLAIMED AMOUNT.

YOUR LETTER SETS FORTH THAT THE RECLAIM FOR $780.61 REPRESENTS A PART OF THE SUM OF $1,247.58 WHICH WAS COLLECTED FROM THE DOUGLAS AIRCRAFT COMPANY AS THE RESULT OF AN AUDIT EXCEPTION MADE APPLICABLE TO A PAYMENT UNDER CONTRACT NO. AF 01/601/-52664, ALTHOUGH THAT CONTRACT WAS INITIALLY A LETTER CONTRACT DATED JULY 3, 1962, AND IT WAS DEFINITIZED SUBSEQUENT TO FEBRUARY 21, 1963. IT IS INDICATED THAT THE AUDIT EXCEPTION WAS WRITTEN TO EFFECT RECOUPMENT FROM AN AMOUNT DUE UNDER A CURRENT CONTRACT OF AN AMOUNT QUESTIONED WITH RESPECT TO THE REIMBURSEMENT OF CLAIMED FISCAL-YEAR 1959 COSTS. IT IS ALSO INDICATED THAT NO REPLY WAS MADE TO A REQUEST OF THE DOUGLAS AIRCRAFT COMPANY, AT THE TIME THAT IT SUBMITTED A CHECK FOR THE SUM OF $1,247.58, AS TO HOW SUCH AMOUNT WAS APPLICABLE TO CONTRACT NO. AF 01/601/-52664.

WE HAVE NOT MADE AN ATTEMPT TO IDENTIFY THE CONTRACT OR CONTRACTS UNDER WHICH $1,247.58 OF THE QUESTIONED OVERHEAD COSTS FOR THE COMPANY'S FISCAL- YEAR 1959 WAS REIMBURSED, IN VIEW OF THE RELATIVELY SMALL AMOUNT OF THE RECLAIM AND FOR THE REASON THAT IT IS PROBABLE THAT THE SEVERAL COST-TYPE CONTRACTS OF THE COMPANY WHICH WERE IN EFFECT DURING THAT YEAR CONTAINED SUBSTANTIALLY SIMILAR PROVISIONS REGARDING THE MANNER IN WHICH ALLOWABLE CONTRACT PERFORMANCE COSTS WERE TO BE DETERMINED.

ACCORDINGLY, THE RECLAIM VOUCHER IN THE AMOUNT OF $780.61 IS RETURNED HEREWITH AND YOU ARE ADVISED THAT PAYMENT THEREON IS AUTHORIZED AS A CHARGE AGAINST CONTRACT NO. AF 01/601/-52664, THE CONTRACT UNDER WHICH THE AMOUNT OF $1,247.58 WAS RECOVERED AS THE RESULT OF THE PARTICULAR AUDIT EXCEPTION.

GAO Contacts