B-163051, MAY 2, 1968

B-163051, MAY 2, 1968

TO MR. SECRETARY:

REFERENCE IS MADE TO A LETTER OF APRIL 10, 1968, FROM THE ADMINISTRATOR, AGENCY FOR INTERNATIONAL DEVELOPMENT, SUBMITTING FOR OUR CONSIDERATION UNDER THE MERITORIOUS CLAIMS ACT, 31 U.S.C. 236, THE CLAIM OF C.H. LEAVELL AND COMPANY FOR REIMBURSEMENT OF EXPENDITURES MADE IN CONNECTION WITH THE PROPOSED CONSTRUCTION OF THE KHARTOUM NORTH SEWERAGE PROJECT IN SUDAN. THE CLAIM HAS NOT BEEN FINALIZED AS TO AMOUNT, AND THE CONTRACTOR STATES THAT IT DOES NOT WAIVE OR FOREGO ANY LEGAL REMEDIES IT MAY HAVE UNDER THE CONTRACT WITH THE SUDANESE, THE LOAN AGREEMENT, OR THE GUARANTY CONTRACT.

IT IS REPORTED THAT UNDER THE AUTHORITY OF THE FOREIGN ASSISTANCE ACT OF 1961, AS AMENDED, 22 U.S.C. 2151 ET SEQ., THE UNITED STATES, ACTING THROUGH THE AGENCY FOR INTERNATIONAL DEVELOPMENT (AID) ENTERED INTO A LOAN AGREEMENT DATED DECEMBER 7, 1963 (AS AMENDED NOVEMBER 3, 1966), WITH THE GOVERNMENT OF THE REPUBLIC OF SUDAN, WHICH WAS INTENDED TO FINANCE THE COSTS OF THE KHARTOUM NORTH SEWERAGE PROJECT. THE LEAVELL FIRM, AS THE CONSTRUCTION CONTRACTOR PURSUANT TO ITS CONTRACT OF DECEMBER 10, 1966, WITH THE GOVERNMENT OF THE REPUBLIC OF SUDAN, SHIPPED EQUIPMENT AND MATERIALS TO SUDAN PRIOR TO THE MIDDLE EAST WAR OF JUNE 1967. SUCH SHIPMENTS WERE MADE IN ADVANCE OF A LETTER OF CREDIT WHICH SHOULD HAVE BEEN FURNISHED THE CONTRACTOR BY THE SUDANESE CONCURRENTLY WITH THE NOTICE TO PROCEED WITH THE WORK. SINCE THE FREEZING OF AID LOAN FUNDS AND CANCELLATION OF AID'S LETTER OF COMMITMENT IN RESPONSE TO THE GOVERNMENT OF SUDAN'S SERVERANCE OF DIPLOMATIC RELATIONS, LEAVELL'S INVOICES FOR PARTIAL PAYMENTS DUE UNDER ITS CONTRACT HAVE REMAINED UNPAID AND IT APPEARS UNLIKELY THAT PAYMENT WILL BE MADE FROM THAT OR ANY OTHER SOURCE. THE MATERIALS WERE SHIPPED IN ADVANCE AND HAVE BEEN PLACED IN STORAGE BY THE CONTRACTOR AT KHARTOUM NORTH.

AFTER THE SUSPENSION OF AID FINANCING FOR PROJECTS IN SUDAN, A CONTRACT OF GUARANTY WAS EXECUTED BETWEEN LEAVELL AND AID ON JULY 7, 1967, UNDER 22 U.S.C. 2181 (B), PROTECTING LEAVELL AGAINST SEIZURE OF ITS EQUIPMENT BY THE GOVERNMENT OF SUDAN AND AGAINST DESTRUCTION OF THE EQUIPMENT BY WAR, REVOLUTION, OR INSURRECTION. LEAVELL'S APPLICATION FOR COMPENSATION UNDER SUCH GUARANTY CONTRACT WAS DENIED BY AID ON NOVEMBER 1, 1967, ON THE BASIS THAT NONE OF THE EVENTS COVERED IN THE CONTRACT HAD BEEN SHOWN TO HAVE OCCURRED.

AUTHORITY FOR ADMINISTRATIVE SETTLEMENT OF CLAIMS ARISING AS A RESULT OF AID'S INVESTMENT GUARANTY OPERATIONS IS PROVIDED IN 22 U.S.C. 2395 (I) AS FOLLOWS:

"CLAIMS ARISING AS A RESULT OF INVESTMENT GUARANTY OPERATIONS MAY BE SETTLED, AND DISPUTES ARISING AS A RESULT THEREOF MAY BE ARBITRATED WITH THE CONSENT OF THE PARTIES, ON SUCH TERMS AND CONDITIONS AS THE PRESIDENT MAY DIRECT. PAYMENT MADE PURSUANT TO ANY SUCH SETTLEMENT, OR AS A RESULT OF AN ARBITRATION AWARD, SHALL BE FINAL AND CONCLUSIVE NOTWITHSTANDING ANY OTHER PROVISION OF LAW.'

IN SUBMITTING THE MATTER TO THIS OFFICE THE ADMINISTRATOR STATES:

"WHILE WE ARE OF THE OPINION THAT NO LEGAL BASIS EXISTS FOR ANY PAYMENT TO THE LEAVELL COMPANY BY A.I.D., WE THINK THERE ARE SUFFICIENT -ELEMENTS OF EQUITY- IN THIS CLAIM TO MERIT MY PRESENTING IT TO YOU.'

THE MERITORIOUS CLAIMS ACT OF APRIL 10, 1928, 31 U.S.C. 236, PROVIDES:

"WHEN THERE IS FILED IN THE GENERAL ACCOUNTING OFFICE A CLAIM OR DEMAND AGAINST THE UNITED STATES THAT MAY NOT LAWFULLY BE ADJUSTED BY THE USE OF AN APPROPRIATION THERETOFORE MADE, BUT WHICH CLAIM OR DEMAND IN THE JUDGMENT OF THE COMPTROLLER GENERAL OF THE UNITED STATES CONTAINS SUCH ELEMENTS OF LEGAL LIABILITY OR EQUITY AS TO BE DESERVING OF THE CONSIDERATION OF THE CONGRESS, HE SHALL SUBMIT THE SAME TO THE CONGRESS BY A SPECIAL REPORT CONTAINING THE MATERIAL FACTS AND HIS RECOMMENDATION THEREON.'

WE HAVE CONSISTENTLY HELD THAT THE PROVISIONS OF THE ACT OF APRIL 10, 1928, WERE INTENDED TO BE APPLIED ONLY TO SUCH CASES AS WE COULD CONSIDER WITH A VIEW OF MAKING ALLOWANCE THEREOF BUT FOR THE LACK OF ANY LEGAL AUTHORITY OR APPROPRIATIONS AVAILABLE FOR THE PAYMENT OF SUCH CLAIMS. OTHER WORDS, WE BELIEVE THAT THE ACT WAS INTENDED TO COVER ONLY THOSE CLAIMS WHICH ARE CONSIDERED AND PASSED ON BY THE GENERAL ACCOUNTING OFFICE IN THE COURSE OF OUR REGULAR BUSINESS, SINCE OTHERWISE WE WOULD HAVE TO DEVELOP A FULL FACTUAL RECORD AND EXAMINE INTO THE MERITS OF ALL CLAIMS FILED HERE MERELY TO DETERMINE WHETHER THE CLAIM SHOULD BE REPORTED TO THE CONGRESS, EVEN WHERE THE CONGRESS HAS SPECIFICALLY CONFERRED JURISDICTION ON SOME OTHER AGENCY TO CONSIDER AND SETTLE CLAIMS OF THE KIND INVOLVED, AND THUS REMOVED THEM FROM OUR JURISDICTION.

INSOFAR AS THE CLAIM OF LEAVELL APPEARS TO PERTAIN TO A POSSIBLE BREACH OF ITS CONTRACT WITH THE GOVERNMENT OF SUDAN, IT IS ESSENTIALLY A CLAIM BY A PRIVATE CITIZEN AGAINST A FOREIGN GOVERNMENT UNDER A CONTRACT TO WHICH THE UNITED STATES WAS NOT A PARTY, AND IS THEREFORE NOT WITHIN THE JURISDICTION OF THIS OFFICE TO SETTLE, OUR CLAIMS JURISDICTION BEING LIMITED TO THOSE CLAIMS TO WHICH THE UNITED STATES IS A PARTY. 31 U.S.C. 71. FURTHER, INSOFAR AS THE CLAIM MIGHT BE CONSIDERED A CLAIM AGAINST THE UNITED STATES UNDER THE CONTRACT OF GUARANTY, BY 22 U.S.C. 2181 (B) AND 2395 (I), CONGRESS HAS SPECIFICALLY CONFERRED JURISDICTION TO MAKE FINAL SETTLEMENTS OF CLAIMS ARISING UNDER SUCH GUARANTY OPERATIONS UPON THE PRESIDENT, AND PURSUANT TO DELEGATIONS OF AUTHORITY THAT JURISDICTION HAS BEEN VESTED IN THE AGENCY FOR INTERNATIONAL DEVELOPMENT. SEE EXECUTIVE ORDER NO. 10973, 26 FR 10469, AND DEPARTMENT OF STATE DELEGATION OF AUTHORITY NO. 104, 26 FR 10608.

ACCORDINGLY, SINCE LEAVELL'S CLAIM IS NOT WITHIN THE SETTLEMENT JURISDICTION OF THE GENERAL ACCOUNTING OFFICE, WE MUST DECLINE TO REPORT THE MATTER TO CONGRESS AS A MERITORIOUS CLAIM.