1. PROTEST FOUNDED ON PREMISE THAT AGENCY IS OBLIGED TO EXCEED ITS
MINIMUM REQUIREMENTS IN ORDER TO NEUTRALIZE ADVANTAGE OF INCUMBENT IS
DENIED.
2. ALLEGATION OF "BUYING IN" PRESENTS NO LEGAL BASIS UPON WHICH AN
AWARD MAY BE DISTURBED.
3. WHERE SPECIFICATION SETS OUT DETAILED DESIGN CHARACTERISTICS AND
ALSO STATES THAT EQUIPMENT FURNISHED SHALL BE OF COMMERCIAL TYPE, USE OF
TERM "COMMERCIAL TYPE" DID NOT MEAN, AS CONTENDED BY PROTESTER, THAT
BIDDERS WERE BEING ASKED TO FURNISH EQUIPMENT EXCEEDING THE DESIGN
CHARACTERISTICS. HOWEVER, RECOMMENDATION IS MADE THAT TERM "COMMERCIAL
TYPE" BE DEFINED IN FUTURE SOLICITATIONS.
4. WHETHER BIDDER WILL FURNISH EQUIPMENT WHICH WILL CONFORM TO
SPECIFICATION REQUIREMENTS IS MATTER OF RESPONSIBILITY, AND AGENCY'S
AFFIRMATIVE DETERMINATION IN THIS REGARD WILL NOT BE REVIEWED BY GAO
EXCEPT IN LIMITED CIRCUMSTANCES. MOREOVER, WHETHER OR NOT EQUIPMENT
ACTUALLY FURNISHED UNDER THE CONTRACT CONFORMS TO THE SPECIFICATION
REQUIREMENTS IS A MATTER OF CONTRACT ADMINISTRATION WHICH WILL NOT BE
REVIEWED BY GAO.
5. CLAIM FOR BID PREPARATION COSTS IS DENIED WHERE GAO HAS NOT
CONCLUDED THAT AGENCY HAS ACTED IMPROPERLY. ALSO EXPENSES INCURRED IN
PURSUING PROTEST ARE NONCOMPENSABLE.
IMBA, INCORPORATED:
IMBA, INCORPORATED (IMBA), PROTESTS THE AWARD OF A CONTRACT TO
ALLIANCE PROPERTIES, INC. (ALLIANCE FOR FURNISHING, INSTALLING AND
MAINTAINING WASHER-DRYER SERVICES AT FORT CAMPBELL, KENTUCKY UNDER
INVITATION FOR BIDS (IFB) DAKF 23-77-B-0019 (IFB-19) (B-188364). THIS
SOLICITATION REPRESENTS THE SECOND EFFORT AT FULFILLING FORT CAMPBELL'S
WASHER-DRYER SERVICE REQUIREMENT. THE FIRST SOLICITATION, IFB DAKF
23-76-B-0164 (IFB-164), WAS CANCELED IN THE WAKE OF A PRIOR IMBA PROTEST
(B-187404). IMBA ALSO PROTESTED THE CANCELLATION OF IFB-164 (B-187404).
THE IMBA CONTENTIONS HAVE THROUGHOUT CENTERED ON THE NATURE OF THE
SPECIFICATIONS USED TO DESCRIBE THE ARMY'S REQUIREMENT. IMBA TAKES THE
POSITION THAT THE SPECIFICATIONS ARE BOTHE RESTRICTIVE AND DEFECTIVE.
IMBA HAS ARGUED THAT THE SPECIFICATIONS RESTRICTED COMPETITION IN TWO
WAYS; FIRST, BY ALLOWING AN UNDULY SHORT INSTALLATION PERIOD UNDER
IFB-164 AND SECOND, UNDER BOTH IFB-164 AND IFB-19 BY ALLOWING BIDDERS TO
PROVIDE THE REQUIRED SERVICES UTILIZING OTHER THAN NEW EQUIPMENT (I.E.,
USED OR REFURBISHED). IMBA HAS LIKEWISE ARGUED THAT THE SPECIFICATIONS
WERE DEFECTIVE IN TWO WAYS; FIRST, IMBA CLAIMS IFB-164 WAS DEFECTIVE TO
THE EXTENT THAT THE COST OF ON-BASE OFFICE AND STORAGE SPACE WAS NOT
INDICATED AND SECOND, BOTH IFB-164 AND IFB-19 WERE DEFECTIVE IN THE
DESCRIPTION OF WHAT WOULD CONSTITUTE ACCEPTABLE ITEMS OF EQUIPMENT. THE
ARMY CANCELED IFB-164 BECAUSE IT AGREED WITH IMBA'S CONTENTION THAT THE
INSTALLATION PERIOD ALLOWED WAS RESTRICTIVE OF COMPETITION. MOREOVER,
THE SECOND SOLICITATION, IFB-19, CURED THE DEFECT REGARDING THE COST OF
ON-BASE OFFICE AND STORAGE SPACE. IMBA, HOWEVER, PROTESTED THE
CANCELLATION OF IFB-164 ON THE GROUND THAT THE ARMY SHOULD HAVE EXAMINED
THE BALANCE OF THE ISSUES IMBA PRESENTED IN ITS FIRST PROTEST.
WE HAVE FOR CONSIDERATION IMBA'S ARGUMENTS THAT THE IFB-19 IMPROPERLY
PERMITTED THE USE OF USED EQUIPMENT AND DID NOT ADEQUATELY DESCRIBE WHAT
CONSTITUTED ACCEPTABLE EQUIPMENT.
IMBA'S CONTENTION, THAT AN IFB WHICH ALLOWS THE USE OF OTHER THAN NEW
EQUIPMENT IS RESTRICTIVE OF COMPETITION, IS REFLECTIVE OF THE
PECULIARITIES OF WASHER-DRYER SERVICE PROCUREMENTS. THE SUCCESSFUL
CONTRACTOR IS EXPECTED TO PROVIDE A LARGE QUANTITY OF EQUIPMENT FOR
GOVERNMENT USE, IN THIS CASE APPROXIMATELY 380 WASHING MACHINES AND 380
DRYERS. IMBA STATES THAT THIS NECESSITATES A LARGE INITIAL INVESTMENT
IN EQUIPMENT WHICH MUST BE AMORTIZED OVER THE TERM OF THE CONTRACT.
WHERE THE GOVERNMENT USES A ONE YEAR CONTRACT WITH AN OPTION TO EXTEND
TO A MAXIMUM OF THREE YEARS, A NEW BIDDER, COMPETING WITH AN INCUMBENT,
MAY BE FORCED TO ASSUME THE RISK OF SPREADING THE RECOVERY OF ITS
INITIAL INVESTMENT OVER A THREE-YEAR PERIOD INSTEAD OF A ONE-YEAR
PERIOD, IN ORDER TO OFFER THE GOVERNMENT A COMPETITIVE PRICE. THERE IS
OF COURSE THE DANGER THAT THE GOVERNMENT WILL NOT EXERCISE THE OPTIONS.
IMBA, IN URGING THE ARMY TO REQUIRE NEW EQUIPMENT, HAS PRESENTED A
COROLLARY ARGUMENT IN WHICH IMBA TAKES THE POSITION THAT THE
GOVERNMENT'S USE OF ONE YEAR CONTRACTS WITH TWO YEAR OPTIONS FORCES THE
NEW BIDDER TO BUY IN." WE WILL DISCUSS THE COROLLARY ARGUMENT FIRST AND
THEN EXAMINE IMBA'S PRINCIPAL ARGUMENT THAT PERMITTING THE USE OF NEW
EQUIPMENT IS RESTRICTIVE.
IMBA'S COMPETITOR, ALLIANCE, HAS OFFERED NEW EQUIPMENT WHICH IMBA
CALCULATES ALLIANCE CAN NOT AMORTIZE IN ONLY ONE YEAR AT ITS BID PRICE.
IMBA BELIEVES THAT ALLIANCE'S BID CONSTITUTES A "BUY IN" AND THAT SUCH A
BID IS PROHIBITED BY ARMED SERVICES PROCUREMENT REGULATION (ASPR) SEC.
1-311 (1976 ED.) WHICH STATES THAT THE DEPARTMENT OF DEFENSE DOES NOT
FAVOR " BUYING IN." WE NOTE THAT TITLE TO THE EQUIPMENT REMAINS WITH THE
CONTRACTOR SO THAT AFTER THE CONTRACT TERM HAS ENDED IT MAY EITHER SELL
THE EQUIPMENT OR PUT IT TO USE IN ITS BUSINESS. MOREOVER, IF THE
OPTIONS ARE EXERCISED, THE CONTRACT HAS PREDETERMINED THE AMOUNTS
ALLIANCE MAY BE PAID IN THE SUBSEQUENT OPTION YEARS. IN ANY EVENT, WE
MAY NOT LEGALLY OBJECT TO THE AWARD OF A CONTRACT EVEN IF IT WERE
ESTABLISHED THAT THE SUCESSFUL CONTRACTOR HAD IN FACT "BROUGHT INTO" THE
PROCUREMENT. SEE 52 COMP. GEN. 653, 660 (1973) AND CASES CITED THEREIN.
FURTHER, WE ARE NOT PERSUADED BY IMBA'S PRINCIPAL ARGUMENT TO THE
EFFECT THAT SPECIFICATIONS WHICH ALLOW THE USE OF USED OR REFURBISHED
EQUIPMENT ARE UNDULY RESTRICTIVE OF COMPETITION. IT MAY BE THAT AN
INCUMBENT HAVING ALREADY AMORTIZED THE COST OF HIS NOW USED EQUIPMENT
HAS AN ADVANTAGE OVER OTHER COMPETITORS. FORCING AN INCUMBENT TO BID
NEW EQUIPMENT WOULD REMOVE THIS COMPETITIVE ADVANTAGE. HOWEVER,
SPECIFICATIONS ARE ONLY SUPPOSED TO PRESCRIBE THE MINIMUM STANDARDS TO
WHICH ARTICLES REQUIRED BY THE GOVERNMENT SHALL CONFORM. B-161839,
NOVEMBER 2, 1967. THE ARMY HAS INDICATED THAT IT DOES NOT NEED NEW
MACHINES AND THAT ANY MACHINE WHICH IS IN WORKING ORDER AND WILL MEET
THE SPECIFICATION REQUIREMENTS WILL DO. WE ARE OF THE OPINION THAT THE
GOVERNMENT IS NOT OBLIGED TO EQUALIZE THE COMPETITIVE POSITIONS OF ALL
POTENTIAL BIDDERS. PRICE WATERHOUSE & CO., B-186779, NOVEMBER 15, 1976,
76-2 CPD 412. THE PURPOSE OF COMPETITIVE PROCUREMENT IS NOT TO INSURE
THAT ALL BIDDERS FACE THE SAME ODDS IN COMPETING FOR GOVERNMENT
CONTRACTS. RATHER, THE PURPOSE IS TO INSURE THAT THE GOVERNMENT OBTAINS
ITS MINIMUM REQUIREMENTS AT THE MOST FAVORABLE PRICE. WE DO NOT THINK
THAT THE POSITION IMBA ESPOUSES WOULD LEAD TO THIS RESULT.
IMBA ALSO ARGUES THAT IFB-19 IS DEFECTIVE, IN THAT IT FAILS TO
ADEQUATELY DESCRIBE WHAT WOULD CONSTITUTE ACCEPTABLE EQUIPMENT. THE
EQUIPMENT SPECIFICATIONS IN IFB-19 READ, IN PART, AS FOLLOWS:
"2. MACHINES:
A. MACHINES FURNISHED UNDER THIS CONTRACT SHALL BE OF A COMMERCIAL
TYPE AND SHALL CONFORM TO THE FOLLOWING DESCRIPTION. MACHINES MAY
EXCEED THIS DESCRIPTION IN ONE OR MORE FEATURES; HOWEVER, FOR THE
PURPOSE OF EVALUATING OFFERS IN RESPONSE TO THIS SOLICITATION, SUCH
MACHINES WILL BE CONSIDERED EQUAL WITH RESPECT TO MACHINES WHICH CONFORM
TO THE REQUIREMENTS STATED.
B. ALL MACHINES INSTALLED UNDER THIS CONTRACT SHALL BE WITHOUT
MECHANICAL OR OTHER DEFECTS WHICH WILL ADVERSELY AFFECT OPERATION OF THE
MACHINES.
"3. WASHERS: WASHERS SHALL BE ELECTRIC, AUTOMATIC, NONVIBRATING, 15
ILBS MINIMUM CAPACITY, 1/3 HP MOTOR, 115 VOLT, 60 CYCLE, AC 3 PRONG
CORD, WITH PORCELIAN OR ACRYLIC ENAMEL FINISH CABINET. ***
"4. DRYERS: THE DRYERS SHALL BE ELECTRIC, AUTOMATIC, NONVIBRATING,
16 LBS MINIMUM CAPACITY, 1/6 HP MOTOR, 115 VOLTS, 60 CYCLE, WITH HEATING
ELEMENT 208-240 VOLTS AND 4750-5200 WATTS, UL LISTED FOR ALL ELECTRIC
SYSTEMS, PORCELAIN OR ACRYLIC FINISH CABINET.
IMBA CONTENDS THAT THE ARMY IN FACT EXPRESSED A DESIRE FOR COMMERCIAL
EQUIPMENT AS OPPOSED TO DOMESTIC EQUIPMENT AT AN AUGUST 26, 1976
CONFERENCE IN CONNECTION WITH IFB-164. HOWEVER, IFB-19 RETAINED THE
15/16 POUNDS MINIMUM CAPACITY AND 1/3 1/6 HORSEPOWER MOTOR REQUIREMENTS
FOR THE WASHERS AND DRYERS WHICH CONTINUED TO INDICATE TO IMBA THE
ACCEPTABILITY OF A DOMESTIC MACHINE.
IMBA CONTENDS THAT THE ABOVE QUOTED SPECIFICATION LANGUAGE CREATES A
CONFLICT BECAUSE PARAGRAPHS 3 AND 4 DESCRIBE WHAT IMBA CONTENDS ARE
DOMESTIC TYPE MACHINES WHILE PARAGRAPH 2(A) REQUIRES HEAVY DUTY MACHINES
CAPABLE OF COMMERICAL TYPE WORK AS OPPOSED TO HOUSEHOLD PERFORMANCE.
IMBA, PRIOR TO BID OPENING OF IFB-19, TIMELY PROTESTED THIS ASPECT OF
THE SOLICITATION URGING THAT THE DETAILED REQUIREMENTS OF PARAGRAPHS 3
AND 4, QUOTED ABOVE, WERE IN CONFLICT WITH THE MORE GENERAL TERM
"COMMERCIAL TYPE" FOUND IN PARAGRAPH 2(A). IMBA ARGUES THAT, IN THE
TRADE, THE TERM "COMMERCIAL TYPE" FOUND IN PARAGRAPH 2(A). IMBA ARGUES
THAT, IN THE TRADE, THE TERM "COMMERCIAL TYPE" HAS DESIGN CONNOTATIONS
WHICH, WHEN READ TOGETHER WITH THE DESIGN CRITERIA EXPRESSLY SET OUT IN
PARAGRAPHS 3 AND 4, CREATE AN AMBIGUITY.
IN THIS REGARD THE ARMY CONTENDS THAT THE TERM "COMMERCIAL TYPE" AS
USED IN THE SPECIFICATION DOES NOT NECESSARILY MEAN THE SAME AS "HEAVY
DUTY" BUT THAT THIS REQUIREMENT MAY BE MET BY MACHINES HAVING THE
SPECIFIED CAPACITY. ALTHOUGH IT IS UNCLEAR WHAT SPECIFIC PROPERTIES
"COMMERCIAL" MACHINES POSSESS THAT ARE NOT POSSESSED BY "DOMESTIC"
MACHINES OF IDENTICAL CAPACITY, WE BELIEVE THAT THE SPECIFICATIONS,
REASONABLY READ, REQUIRED INSTALLATION OF MACHINES WHICH MET THE EXPRESS
CRITERIA OF PARAGRAPHS 3 AND 4. WE DO NOT AGREE WITH THE PROTESTER'S
ARGUMENT THAT THE TERM "COMMERCIAL TYPE" MEANT THAT BIDDERS WERE BEING
ASKED TO FURNISH EQUIPMENT EXCEEDING THE DESIGN CHARACTERISTICS OF
PARAGRAPHS 3 AND 4. HOWEVER, WE RECOMMEND THAT IN FUTURE PROCUREMENTS
OF THIS TYPE THAT THE PARTICULAR CHARACTERISTICS OF "COMMERCIAL"
MACHINES WHICH THE AGENCY DETERMINES ARE NECESSARY TO MEET ITS NEEDS BE
SPECIFICALLY SET FORTH IN THE SPECIFICATION.
IMBA FURTHER CONTENDS THAT THE MACHINES WHICH ARE BEING SUPPLIED BY
ALLIANCE AND WHICH ARE BEING PURCHASED FROM SEARS, ROEBUCK AND COMPANY
(SEARS), DO NOT MEET THE CAPACITY REQUIREMENTS BECAUSE THEY DO NOT HAVE
THE MINIMUM 15 AND 16 POUND CAPACITY FOR WASHIERS AND DRYERS SET FORTH
IN THE SPECIFICATION. IN THIS REGARD IMBA CONTENDS THAT A SEARS
OFFICIAL HAS INDICATED THAT THE SEARS EQUIPMENT PROPOSED BY ALLIANCE
WILL NOT MEET THE SPECIFICATION. THE ARMY TAKES THE POSITION THAT IMBA
HAS NOT BEEN ABLE TO PROVE THAT ITS ASSERTIONS ARE CORRECT. SEARS AS AN
ORGANIZATION HAS LIMITED ITS COMMENTS TO THE OBSERVATION THAT IT
MEASURES THE CAPACITY OF ITS EQUIPMENT IN UNITS OF VOLUME RATHER THAN BY
WEIGHT. NOTWITHSTANDING THE FACT THAT THE CAPACITY OF SEARS EQUIPMENT
IS NO LONGER EXPRESSED IN TERMS OF WEIGHT THE ARMY MAINTAINS THAT ITS
CONTRACTING OFFICER ACTED PROPERLY IN MAKING THE DETERMINATION THAT
ALLIANCE WAS A RESPONSIBLE AND RESPONSIVE BIDDER BASED ON THE PREAWARD
SURVEY PREPARED BY THE SAN DIEGO DEFENSE CONTRACT ADMINISTRATIVE SERVICE
(DCAS) OFFICE. THE DCAS REPORT DATED MARCH 11, 1977 STATES:
"THE OFFEROR (ALLIANCE) IS FAMILIAR WITH THE MAJORITY OF WASHIERS AND
DRYERS BEING CURRENTLY MANUFACTURED. THE MODELS SELECTED FOR THIS
PROPOSED CONTRACT ARE MANUFACTURED BY SEARS ROEBUCK COMPANY AND THEY
COMPLY WITH THE REQUIREMENTS OF THE PROPOSED CONTRACT SPECIFICATIONS."
BASED ON THE ABOVE ALLIANCE WAS DETERMINED TO BE A RESPONSIBLE BIDDER
AND AWARDED THE CONTRACT ON APRIL 1, 1977.
UNLESS SOMETHING ON THE FACE OF THE BID LIMITS, REDUCES OR MODIFIES
THE OBLIGATION OF THE PROSPECTIVE CONTRACTOR TO PERFORM IN ACCORDANCE
WITH THE TERMS OF THE INVITATION, THE BID MUST BE CONSIDERED RESPONSIVE.
53 COMP. GEN. 396 (1973). HERE, ALLIANCE UNQUALIFIEDLY OFFERED TO MEET
ALL THE REQUIREMENTS FOR THE WASHER AND DRYER SERVICE INCLUDING THE
CAPACITY REQUIREMENTS FOR THE MACHINES TO BE USED IN FURNISHING THE
SERVICE. ITS BID WAS, THEREFORE, RESPONSIVE.
THE ABILITY OF ALLIANCE TO SUPPLY THE APPROPRIATE MACHINES WITH WHICH
TO SUPPLY THE SERVICE IS A MATTER OF RESPONSIBILITY. 53 COMP. GEN. 396,
SUPRA. IMBA'S ARGUMENTS THAT THE MACHINES WHICH ALLIANCE INTENDS TO
SUPPLY WILL NOT MEET THE SPECIFICATION CONSTITUTES A PROTEST AGAINST THE
ARMY'S AFFIRMATIVE DETERMINATION OF ALLIANCE'S RESPONSIBILITY.
THIS OFFICE DOES NOT REVIEW PROTESTS AGAINST SUCH AFFIRMATIVE
DETERMINATIONS OF RESPONDIBILITY UNLESS EITHER FRAUD IS ALLEGED ON THE
PART OF PROCURING OFFICIALS OR THE SOLICITATION CONTAINS DEFINITIVE
RESPONSIBILITY CRITERIA WHICH ALLEGEDLY HAVE NOT BEEN APPLIED. CENTRAL
METAL PRODUCTS, INCORPORATED, 54 COMP. GEN. 66 (1974), 74-2 CPD 64;
YARDNEY ELECTRIC CORPORATION, 54 COMP. GEN. 509 (1974), 74-2 CPD 376.
SINCE FRAUD IS NOT ALLEGED AND THE IFB CONTAINS NO DEFINITIVE
RESPONSIBILITY CRITERIA THIS ISSUE IS NOT FOR OUR CONSIDERATION.
MOREOVER, WHETHER OR NOT ALLIANCE IS ACTUALLY FURNISHING CONFORMING
EQUIPMENT UNDER THE CONTRACT IS A MATTER OF CONTRACT ADMINISTRATION
WHICH WILL NOT BE REVIEWED BY THIS OFFICE. DYNETERIA, INC., B-186828,
JULY 22, 1976, 76-2 CPD 72.
FINALLY, IMBA HAS ASKED FOR REIMBURSEMENT OF ITS BID PREPARATIONS
COSTS AND OF THE EXPENSES INCURRED IN PURSUING ITS PROTEST. SINCE WE
HAVE NOT CONCLUDED THAT THE ARMY HAS ACTED IMPROPERLY IN CONDUCTING THIS
PROCUREMENT IT WOULD LOGICALLY FOLLOW THAT THERE WAS NO ARBITRARY OR
CAPRICIOUS ACTION TOWARD THE PROTESTER, AND THUS THAT THERE IS NO BASIS
TO SUPPORT RECOVERY OF ITS BID PREPARATION COSTS. AMPEX CORPORATION,
RCA CORPORATION, B-183839, NOVEMBER 14, 1974, 74-2 CPD 304. REGARDING
IMBA'S CLAIM FOR EXPENSES INCURRED IN PURSUING ITS PROTEST WE HAVE HELD
IN THE PAST THAT SUCH EXPENSES ARE NONCOMPENSABLE. T & H COMPANY, 54
COMP. GEN. 1021, 1027 (1975), 75-1 CPD 345.
ACCORDINGLY, THE PROTEST IS DENIED.
B-188627, NOV 9, 1977
HEADNOTES-UNAVAILABLE
PRIOR DECISION, HOLDING THAT BIDDER'S FAILURE TO ACKNOWLEDGE
SOLICITATION AMENDMENT MAY BE WAIVED, IS AFFIRMED WHERE AGENCY'S REQUEST
FOR RECONSIDERATION FAILS TO SHOW THAT AMENDMENT HAD MORE THAN TRIVIAL
EFFECT ON PRICE.
B&W STAT LABORATORY, INC.; QUAL-MED ASSOCIATES, INC. _ REQUEST FOR
RECONSIDERATION:
BY LETTER OF OCTOBER 12, 1977, THE DISTRICT OF COLUMBIA DEPARTMENT OF
GENERAL SERVICES REQUESTS RECONSIDERATION OF OUR DECISION IN B&W STAT
LABORATORY, INC.; QUAL-MED ASSOCIATES, INC., B-188627, AUGUST 26, 1977.
IN THAT DECISION, WE HELD THAT THE FAILURE OF B&W STAT LABORATORY, INC.
(B&W) TO ACKNOWLEDGE ADDENDUM NO. 2 TO INVITATION FOR BIDS NO.
0117-AA-65-0-7-BM SHOULD BE WAIVED AS A MINOR INFORMALITY UNDER SECTION
2620.14 OF THE DISTRICT OF COLUMBIA PROCUREMENT REGULATIONS BECAUSE IT
HAD NO SIGNIFICANT EFFECT ON THE SOLICITATION'S QUALITY, QUANTITY OR
DELIVERY TERMS AND BECAUSE ITS EFFECT ON PRICE ($209) WAS TRIVIAL IN
COMPARISON WITH THE PROTESTER'S BID PRICE ($145,460) AND THE DIFFERENCE
($198,939) BETWEEN THE PROTESTER'S BID PRICE AND THAT OF THE NEXT
HIGHEST BIDDER. ALGERNON BLAIR, INC., B-182626, FEBRUARY 4, 1975, 75-1
CPD 76. THE ONLY SUBSTANTIVE CHANGE MADE BY ADDENDUM NO. 2 WAS IN
REQUIRING THE USE OF "NO-CARBON REQUIRED" REPORT FORMS INSTEAD OF "AN
ORIGINAL AND THREE CARBON COPIES."
THE D. C. DEPARTMENT OF GENERAL SERVICES CONTENDS THAT THE COST OF
PROVIDING THE FORMS REQUIRED BY ADDENDUM NO. 2 IS NOT TRIVIAL AND,
THEREFORE, FAILURE TO ACKNOWLEDGE THE ADDENDUM MAY NOT BE WAIVED.
IN SUPPORT OF ITS POSITION, THE D. C. DEPARTMENT OF GENERAL SERVICES
HAS SUBMITTED A MEMORANDUM FOR THE PRINTING BRANCH OF THE D. C.
GOVERNMENT INDICATING THAT THE ESTIMATED COST OF PRINTING 43,000 4-PART,
NO-CARBON FORMS IS $2,250,00. THIS IS IN LINE WITH THE $3,000.00
ESTIMATED COST' REFERRED TO IN PRIOR SUBMISSIONS OF THE D.C. GOVERNMENT,
DATED APRIL 7, 1977 AND MAY 11, 1977. THE D. C. DEPARTMENT OF GENERAL
SERVICES HAS ENTRODUCED NO EVIDENCE AS TO THE EFFECT OF THE ADDENDUM ON
THE CONTRACT PRICE, HOWEVER. UNDER D.C. PROCUREMENT REGULATIONS SEC.
2620.14(B) (4) (B), THE EFFECT ON PRICE DETERMINES THE PROPRIETY OF
WAIVING A BIDDER'S FAILURE TO ACKNOWLEDGE AN AMENDMENT. IN OUR DECISION
WE NOTED THAT THE PROTESTER CONTENDED THAT ADDENDUM NO. 2 INCREASED THE
COST OF PERFORMANCE BY ONLY $150.000, A FIGURE WHICH WAS SUBSTANTIATED
BY THE $209.00 ESTIMATE SUPPLIED OUR OFFICE BY THE U.S. GOVERNMENT
PRINTING OFFICE. SINCE THE D. C. GOVERNMENT'S REQUEST FOR
RECONSIDERATION IS NOT SUPPORTED BY ANY EVIDENCE INDICATING THAT THE
EFFECT OF THE UNACKNOWLEDGED ADDENDUM WAS OTHER THAN TRIVIAL, OUR PRIOR
DECISION SUSTAINING B&W'S PROTEST IS AFFIRMED.
B-190168, NOV 9, 1977
HEADNOTES-UNAVAILABLE
!. THE CORRECTION IN 1976 OF AN APPARENT CLEARICAL ERROR OMITTING
CREDIT FOR INACTIVE NATIONAL GUARD SERVICE IN A FORMER ARMY MEMBER'S
ARMED FORCES REPORT OF TRANSFER OF DISCHARGE (DEPARTMENT OF DEFENSE FORM
214) PREPARED AT THE TIME OF HIS SEPARATION FROM ACTIVE DUTY IN 1967,
DID NOT CREATE ANY NEW CLAIM OR LEGAL ENTITLEMENT FOR THE FORMER MEMBER,
WHERE THE CORRECTIVE ACTION LEFT UNCHANGED THE BASIC FACTS OF HIS
MILITARY SERVICE AS SET FORTH IN HIS ORIGINAL MILITARY PERSONNEL
RECORDS.
2. A CLAIM BY A FORMER ARMY MEMBER FOR ARREARS TO PAY WHICH ACCRUED
MORE THAN 6 FULL YEARS PRIOR TO THE TIME IT WAS RECEIVED IN THE GENERAL
ACCOUNTING OFFICE IN 1977 IS BARRED BY OPERATION OF LAW, NOTWITHSTANDING
THE ADJUTANT GENERAL'S CORRECTION WITHIN THE 6-YEAR PERIOD OF CERTAIN
CLERICAL ERRORS IN A DOCUMENT RELATING TO THE CLAIMANT'S MILITARY
SERVICE, WHERE SUCH CORRECTION NEITHER CHANGED THE UNDERLYING FACTS OF
RECORD CONTAINED IN HIS MILITARY PERSONNEL FILE NOR GAVE HIM ANY NEW
LEGAL RIGHTS WHICH HE DID NOT PREVIOUSLY HAVE. 31 U.S.C. 71A (SUPP.
IV, 1974).
3. AN UNTIMELY CLAIM BY A FORMER ARMY MEMBER FOR ARREARS OF PAY,
BARRED FROM CONSIDERATION FOR THE REASON THAT IT WAS NOT RECEIVED IN THE
GENERAL ACCOUNTING OFFICE WITHIN 6 YEARS OF THE TIME IT ACCRUED, COULD
NOT HAVE BEEN FAVORABLY CONSIDERED EVEN IF IT HAD BEEN TIMELY FILED,
WHERE NO RECORDS EXIST WHICH MIGHT ESTABLISH THAT THE CLAIMANT WAS EVER
ACTUALLY UNDERPAID IN THE COURSE OF HIS MILITARY SERVICE, SINCE IN THE
ABSENCE OF SUCH RECORDS THIS OFFICE WOULD HAVE HAD NO ALTERNATIVE BUT TO
DISALLOW THE CLAIM.
MR. MELVIN GRAY:
THIS ACTION IS IN RESPONSE TO A LETTER FROM MR. MELVIN GRAY, SSAN
000-00-1428, 715 SOUTH KINGSLEY DRIVE, LOS ANGELES, CALIFORNIA 90005, A
FORMER MEMBER OF THE UNITED STATES ARMY, WHICH CONSTITUTES AN APPEAL
FROM THE SETTLEMENT BY OUR CLAIMS DIVISION DATED JUNE 21, 1977. THAT
SETTLEMENT DISALLOWED HIS CLAIM FOR AMOUNTS BELIEVED DUE BY REASON OF
THE CORRECTION IN 1976 OF HIS DEPARTMENT OF DEFENSE FORM 214 (DD FORM
214). "ARMED FORCES OF THE UNITED STATES REPORT OF TRANSFER OR
DISCHARGE," ISSUED IN 1967, THE LIST AN ADDITIONAL 4 MONTHS AND 11 DAYS
OF INACTIVE SERVICE HE PERFORMED AS A MEMBER OF THE ILLINOIS ARMY
NATIONAL GUARD AS A PART OF HIS TOTAL REPORTED MILITARY SERVICE
CREDITABLE FOR BASIC PAY PURPOSES.
THE AVAILABLE RECORDS INDICATE THAT THE CLAIMANT ENLISTED IN THE ARMY
NATIONAL GUARD OF ILLINOIS ON NOVEMBER 5, 1963, AND SERVED WITH THAT
ORGANIZATION IN AN INACTIVE STATUS UNTIL MARCH 14, 1964, WHEN HE WAS
ORDERED TO ACTIVE DUTY FOR TRAINING. ON AUGUST 14, 1964, HE WAS
RELEASED FROM ACTIVE DUTY UPON COMPLETION OF TRAINING AND WAS
TRANSFERRED BACK TO INACTIVE STATUS IN THE ILLINOIS ARMY NATIONAL GUARD.
HE WAS HONORABLY DISCHARGED FROM THE NATIONAL GUARD ON AUGUST 16, 1964,
AND ON AUGUST 17, 1964, HE ENLISTED IN THE REGULAR ARMY IN THE GRADE OF
PRIVATE (E-2). HE SERVED CONTINUOUSLY ON ACTIVE DUTY THEREAFTER UNTIL
HIS SEPARATION FROM ACTIVE SERVICE ON JULY 31, 1967, IN THE GRADE OF
SPECIALIST FOUR (E-4).
AT THE TIME OF THE CLAIMANT'S RELEASE IN JULY 1967, A STANDARD DD
FORM 214 WAS PREPARED TO SUMMARIZE HIS RECORD OF MILITARY SERVICE. ITEM
22A OF THE FORM, AS CLERICALLY PREPARED AT THAT TIME, READS AS FOLLOWS:
__________
_________________________________________________________________
22 STATEMENT OF SERVICE YEARS MONTHS DAYS
__________________________________
_________________________________________
A. (1) NET SERVICE THIS PERIOD 02 11 14
_____________________________________________________
CREDITABLE (2) OTHER SERVICE 00 05 03
_____________________________________________________
FOR BASIC PAY (3) TOTAL (LINE (1) PLUS
PURPOSES LINE (2)) 03 04 17
__________________________________
_________________________________________
IT THUS APPEARS THAT ONLY THE CLAIMANT'S ACTIVE DUTY SERVICE WAS
LISTED IN ITEM 22A OF THE DD FORM 214, EVEN THOUGH PERIODS OF ENLISTED
TIME IN THE NATIONAL GUARD ARE CREDITABLE FOR THE PURPOSE OF COMPUTING
BASIC PAY UNDER THE PROVISIONS OF 37 U.S.C. 205 (1970). HOWEVER, THE
CLAIMANT'S SIGNATURE APPEARS IN THE AUTHENTICATION BLOCK OF THE
INCORRECTLY PREPARED DD FORM 214, AND WE HAVE BEEN ADVISED THAT THE
AVAILABLE RECORDS DO NOT SHOW OR VERIFY THAT THE CLAIMANT THEN OR AT ANY
PRIOR TIME TOOK EXCEPTION TO ENTRIES IN HIS RECORDS OR OBJECTED TO THE
METHOD EMPLOYED IN COMPUTING HIS PAY.
ARMY RECORDS SHOW THAT MORE THAN 9 YEARS LATER, ON AUGUST 23, 1976,
THE CLAIMANT REQUESTED CORRECTION OF HIS DD FORM 214. BASED UPON THIS
REQUEST, THE ADJUTANT GENERAL OF THE ARMY ON DECEMBER 6, 1976, CORRECTED
ITEM 22A OF THE DD FORM 214 TO SHOW A TOTAL OF 3 YEARS, 8 MONTHS AND 28
DAYS OF SERVICE CREDITABLE FOR BASIC PAY PURPOSES, THUS INCLUDING THE 4
MONTHS AND 11 DAYS OF INACTIVE NATIONAL GUARD SERVICE ERRONEOUSLY
OMMITTED AT THE TIME THE FORM WAS ORIGINALLY PREPARED IN JULY 1967.
AFTER THE DD FORM 214 WAS CORRECTED, THE CLAIMANT BY COMMUNICATION TO
THE UNITED STATES ARMY FINANCE CENTER DATED DECEMBER 15, 1976, REQUESTED
COMPENSATION IN AN UNSPECIFIED AMOUNT, ON THE BASIS THAT THE ERROR HAD
AFFECTED "THE ENTIRE LENGTH OF MY SERVICE INCLUDING PAY AND PROMOTIONS."
THE ARMY FINANCE CENTER FORWARDED THE MATTER TO OUR CLAIMS DIVISION,
WHICH FIRST RECEIVED IT FOR CONSIDERATION ON MAY 11, 1977.
THE CLAIMS DIVISION DISALLOWED THE REQUEST ON JUNE 21, 1977, FOR THE
REASON THAT THE LAW PROVIDES ANY CLAIM NOT RECEIVED IN THE GENERAL
ACCOUNTING OFFICE WITHIN 6 FULL YEARS AFTER THE DATE THE CLAIM FIRST
ACCRUED IS BARRED. IN HIS LETTER OF APPEAL, THE CLAIMANT HAS QUESTIONED
THE CORRECTNESS OF THAT DISALLOWANCE, AND AN OFFICIAL ATTACHED TO THE
ARMY FINANCE CENTER HAS FURTHER SUGGESTED THAT THE CLAIM MAY BE TIMELY,
SINCE THE DD FORM 214 WAS NOT CORRECTED UNTIL DECEMBER 1976.
IN THE JUNE 21, 1977 SETTLEMENT, IT WAS DETERMINED THAT THE BARRING
ACT OF OCTOBER 9, 1940, 54 STAT. 1061, AS AMENDED BY TITLE VIII OF
PUBLIC LAW 93-604, APPROVED JANUARY 2, 1975, 88 STAT. 1965, CODIFIED AS
31 U.S.C. 71A (SUPP. IV, 1974), WAS APPLICABLE TO MR. GARY'S CLAIM.
THAT ACT PROVIDES IN PERTINENT PART:
"(1) EVERY CLAIM OR DEMAND *** AGAINST THE UNITED COGNIZABLE BY THE
GENERAL ACCOUNTING OFFICE *** SHALL BE FOREVER BARRED UNLESS SUCH CLAIM
*** SHALL BE RECEIVED IN SAID OFFICE WITHIN 6 YEARS AFTER THE DATE SUCH
CLAIM FIRST ACCRUED ***."
UNDER THAT PROVISION OF LAW, AS A CONDITION PRECEDENT TO A CLAIMANT'S
RIGHT TO HAVE HIS CLAIM CONSIDERED BY THE GENERAL ACCOUNTING OFFICE, HIS
CLAIM MUST BE "RECEIVED IN SAID OFFICE" WITHIN THE 6-YEAR PERIOD. THE
PRIMARY PURPOSE OF THE BARRING ACT IS TO RELIEVE THE GOVERNMENT OF THE
NECESSITY OF RETAINING AND GOING BACK OVER OLD RECORDS FOR THE PURPOSE
OF SETTLING STALE CLAIMS. THIS OFFICE DOES NOT HAVE AUTHORITY TO WAIVE
ANY OF THE PROVISIONS OF THE ACT OR MAKE ANY EXCEPTIONS TO THE TIME
LIMITATION IT IMPOSES. SEE DECISION B-187084, OCTOBER 22, 1976.
WITH RESPECT TO THE MATTER OF THE CORRECTION OF THE CLAIMANT'S DD
FORM 214, IT HAS CONSISTENTLY BEEN HELD THAT CORRECTIONS OF CLERICAL
ERRORS IN MILITARY DOCUMENTS WHICH ARE BASED UPON FACTS ALREADY PRESENT
IN A MEMBER'S MILITARY PRSONNEL RECORDS DO NOT AFFECT OR TOLL THE
RUNNING OF THE LIMITATION PERIOD OF THE BARRING ACT. ONLY A CORRECTION
OF MILITARY RECORDS WHICH CHANGES THE BASIC FACTS AS SET OUT IN THE
ORIGINAL RECORD, THEREBY CREATING A NEW RIGHT OR LEGAL ENTITLEMENT WHICH
DID NOT PREVIOUSLY EXIST, MAY AFFECT THE BARRING ACT, SINCE SUCH
CIRCUMSTANCES GIVE RISE TO THE ACCRUAL OF AN ENTIRELY NEW CLAIM. SEE 45
COMP. GEN. 538 (1966); 48 COMP. GEN. 235, 238 (1968); B-130796,
AUGUST 29, 1966; B-186322, AUGUST 20, 1976; AND COMPARE HAISLIP V.
UNITED STATES, 152 CT. CL. 339 (1961).
IN THE PRESENT CASE, IT APPEARS THAT A CLERICAL ERROR WAS MADE IN THE
PREPARATION OF THE CLAIMANT'S DD FORM 214 WHEN HE WAS RELEASED FROM
ACTIVE DUTY IN JULY 1967, IN THAT HIS INACTIVE NATIONAL GUARD SERVICE
WAS OMITTED IN ITEM 22A OF THE FORM. THE NATIONAL PERSONNEL RECORDS
CENTER, ST. LOUIS, MISSOURI, HAS ADVISED US THAT THE CLAIMANT'S MILITARY
RECORDS PRIOR TO JULY 1967 CONTAINED ENTRIES FULLY REPORTING AND
SUBSTANTIATING THE PERFORMANCE OF SUCH SERVICE. HOWEVER, NEITHER THAT
ACTIVITY NOR THE ARMY FINANCE CENTER HAS ON FILE ANY PAY OR PERSONNEL
RECORDS WHICH MIGHT SUBSTANTIATE THE CLAIMANT'S CONTENTION THAT HE WAS
UNDERPAID OR WAS ASSIGNED AN INCORRECT SERVICE DATE FOR BASIC PAY
PURPOSES DURING THE TIME HE WAS IN THE ARMY. THUS, IT APPEARS THAT THE
ACTION TAKEN BY THE ARMY ADJUTANT GENERAL IN DECEMBER 1976 TO CORRECT
THE CLERICAL ERROR IN ITEM 22A OF THE CLAIMANT'S DD FORM 214 WAS BASED
ON FACTS ALREADY PRESENT IN THE CLAIMANT'S MILITARY RECORDS EXISTING
PRIOR TO JULY 1967. IT FURTHER APPEARS THAT NO RECORDS EXIST WHICH
MIGHT INDICATE THAT THE ERROR IN THE PREPARATION OF THE DD FORM 214 HAD
ANY ADVERSE EFFECT ON HIS MILITARY PAY OR THAT HE WAS ACTUALLY EVER
UNDERPAID DURING HIS ARMY SERVICE
IT IS, THEREFORE, OUR VIEW THAT ANY CLAIM MR. GRAY MAY HAVE HAD FOR
ARREARS OF MILITARY PAY BASED UPON AN INCORRECT COMPUTATION OF HIS PAY
RATES ACCRUED NO LATER THAN THE TIME OF HIS SEPARATION FROM MILITARY
SERVICE. THE ACTION TAKEN BY THE ADJUTANT GENERAL OF THE ARMY IN
DECEMBER 1976 TO CORRECT THE CLERICAL ERROR IN THE PREPARATION OF HIS DD
FORM 214 DID NOT GIVE RISE TO A NEW CLAIM, SINCE THE CORRECTION DID NOT
CHANGE ANY OF THE BASIC FACTS OF HIS MILITARY SERVICE AS SET OUT IN THE
ORIGINAL UNDERLYING PERSONNEL RECORDS EXISTING PRIOR TO JULY 1967.
HENCE, THE ACT OF OCTOBER 9, 1940, AS AMENDED, 31 U.S.C. 71A, SUPRA,
PRECLUDES US FROM GIVING ANY CONSIDERATION TO THE CLAIM, INASMUCH AS IT
WAS NOT RECEIVED IN THIS OFFICE UNTIL MAY 11, 1977, WELL OVER 6 YEARS
AFTER THE TIME IT ACCRUED IN 1967.
MOREOVER, IT APPEARS THAT WE WOULD BE UNABLE TO GIVE MR. GARY'S CLAIM
FAVORABLE CONSIDERATION EVEN IF IT WERE NOT BARRED BY REASON OF ITS
UNTIMELINESS. AS PREVIOUSLY INDICATED, NO RECORDS EXIST IN GOVERNMENT
FILES WHICH MIGHT ESTABLISH WHAT AMOUNT OF MONEY, IF ANY, THE CLAIMANT
MAY HAVE BEEN UNDERPAID IN THE COURSE OF HIS MILITARY SERVICE. THE
BURDEN OF PROOF AS TO THE EXISTENCE AND NONPAYMENT OF A VALID CLAIM
AGAINST THE FEDERAL GOVERNMENT IS ON THE PERSON ASSERTING THE CLAIM, AND
IN A SITUATION SUCH AS THIS WHERE RECORDS WHICH MIGHT PROVE OR DISPROVE
ITS VALIDITY ARE UNAVAILABLE, THIS OFFICE WOULD HAVE HAD NO ALTERNATIVE
BUT TO DISALLOW THE CLAIM. SEE DECISIONS B-189212, JULY 5, 1977; AND
B-183900, AUGUST 3, 1976.
ACCORDINGLY, THE SETTLEMENT OF OUR CLAIMS DIVISION DISALLOWING THE
CLAIM IS CORRECT AND IS SUSTAINED.
B-170686, NOV 8, 1977
HEADNOTES-UNAVAILABLE
MINING ENFORCEMENT AND SAFETY ADMINISTRATION HAS AUTHORITY UNDER 30
U.S.C. SEC. 951(A) (1970) (SECTION 501(A) OF FEDERAL COAL MINE HEALTH
AND SAFETY ACT OF 1969) TO MAKE GRANT TO UNION FOR STUDY, RESEARCH,
EXPERIMENT, OR DEMONSTRATION PROJECT FOR EMERGENCY MEDICAL TECHNICIAN
TRAINING PROGRAMS FOR COAL MINERS. PROPOSED PROGRAM IS SUFFICIENTLY
CLOSELY RELATED TO COAL MINE SAFETY (AS OPPOSED TO HEALTH) TO BE WITHIN
JURISDICTION OF DEPARTMENT OF INTERIOR WHICH UNDER SECTION 951 IS
RESPONSIBLE FOR SAFETY MATTERS.
GRANT PROPOSAL FOR EMERGENCY MEDICAL TECHNICIAN TRAINING FOR COAL
MINERS:
THIS DECISION RESPONDS TO A REQUEST BY THE DEPUTY UNDER SECRETARY OF
INTERIOR FOR OUR OPINION WHETHER THERE IS AUTHORITY UNDER THE FEDERAL
COAL MINE HEALTH AND SAFETY ACT OF 1969, AS AMENDED (THE ACT), 30 U.S.C.
SEC. 801-960 (1970 AND SUPP. V 1975), FOR THE MINING ENFORCEMENT AND
SAFETY ADMINISTRATION (NESA) TO FUND EMERGENCY MEDICAL TECHNICIAN
TRAINING PROGRAMS CONDUCTED BY PRIVATE PARTIES OR ORGANIZATIONS.
UNITED MINE WORKERS OF AMERICA (UMWA) HAS PROPOSED THAT MESA, WHICH
HAS BEEN DELEGATED CERTAIN OF THE AUTHORITIES OF THE SECRETARY OF THE
INTERIOR UNDER THE ACT, FUND SUCH A PROGRAM, TO BE ADMINISTERED BY UMWA.
UMWA WOULD USE THE GRANT TO TRAIN MINERS TO PROVIDE EMERGENCY MEDICAL
TREATMENT TO INJURED OR SICK FELLOW MINERS UNTIL PROFESSIONAL MEDICAL
TREATMENT IS AVAILABLE. THE ULTIMATE GOAL OF THE PROGRAM WOULD BE TO
PLACE AT LEAST ONE TRAINED MAN PER SHIFT AT EACH UNION-ORGANIZED MINE,
BUT THE PRESENT PROPOSAL IS APPARENTLY FOR A PROTOTYPE OR DEMONSTRATION
PROGRAM. MESA BELIEVES THAT THE UMWA CONCEPT IS MERITORIOUS AND WOULD
LIKE TO CARRY IT OUT ON EITHER A GRANT OR CONTRACT BASIS IF IT IS
AUTHORIZED TO DO SO.
30 U.S.C. SEC. 951(A) AUTHORIZES THE SECRETARY OF THE INTERIOR AND
THE SECRETARY OF HEALTH, EDUCATION, AND WELFARE (HEW), "AS APPROPRIATE,"
TO CONDUCT STUDIES, RESEARCH, EXPERIMENTS, AND DEMONSTRATIONS FOR
CERTAIN ENUMERATED PURPOSES, AS WELL AS FOR SUCH OTHER PURPOSES AS THEY
DEEM NECESSARY TO FULFILL THE OBJECTIVES OF THE ACT. SECTION 951(C)
AUTHORIZES BOTH SECRETARIES TO ENTER INTO CONTRACTS WITH, AND MAKE
GRANTS TO, PUBLIC AND PRIVATE ORGANIZATIONS AND INDIVIDUALS IN ORDER TO
CARRY OUT THE PROVISIONS OF SECTION 951(A), 952(A), AND 861(B).
ACTIVITIES UNDER SECTION 951 IN THE FIELD OF COAL MINE HEALTH ARE TO BE
CARRIED OUT BY THE SECRETARY OF HEW, WHILE THOSE IN THE FIELD OF COAL
MINE SAFETY ARE DELEGATED TO THE SECRETARY OF THE INTERIOR. 30 U.S.C.
SEC. 951(B). THE TERMS "HEALTH" AND "SAFETY" ARE UNDEFINED IN THE ACT.
THE ASSOCIATE SOLICITOR-MINE HEALTH AND SAFETY, DEPARTMENT OF THE
INTERIOR, BASED ON THE CITED PROVISIONS, CONCLUDES THAT THE EMERGENCY
MEDICAL TECHNICIAN TRAINING PROGRAM IS IN THE PROVINCE OF THE SECRETARY
OF HEW BECAUSE IT IS "OBVIOUSLY A HEALTH-ORIENTED ENDEAVOR." HE
ACKNOWLEDGES, HOWEVER, THAT HEW AND INTERIOR HAVE OVERLAPPING AUTHORITY
UNDER THE ACT WITH RESPECT TO CERTAIN HEALTH MATTERS, AND THAT A
DIFFERENT INTERPRETATION FROM THAT WHICH HE REACHED IS POSSIBLE.
WE GIVE GREAT WEIGHT, IN CONSTRUING A STATUTE, TO THE VIEW OF THE
AGENCY CHARGED WITH CARRYING IT OUT. IN THIS INSTANCE, HOWEVER,
INTERIOR HAS NOT TAKEN A FIRM POSITION. AS ALREADY NOTED, THE ASSOCIATE
SOLICITOR ACKNOWLEDGES SOME DOUBT IN THE MATTER, AS A RESULT OF WHICH HE
RECOMMENDED THAT THE QUESTION BE REFERRED TO US. THE DUPUTY UNDER
SECRETARY CONSIDERS THERE IS AN OVERLAP OF JURISDICTION UNDER THE ACT
BETWEEN HEW AND INTERIOR, AND REQUESTS OUR OPINION BECAUSE THE QUESTION
IS A CLOSE ONE.
WHILE THE FUNCTION OF EMERGENCY MEDICAL TECHNICIANS CERTAINLY RELATES
TO THE HEALTH OF MINERS, IN THAT THE TECHNICIANS WOULD PROVIDE FIRST-AID
IN THE EVENT OF ACCIDENT OR ILLNESS, THERE IS ALSO A REAL SENSE IN WHICH
THE PRESENCE IN A MINE OF A MEDICAL TECHNICIAN TRAINED TO ASSIST MINERS
IN AN EMERGENCY IS A SAFETY FACTOR. THIS IS, AS INTERIOR SUGGESTS, AN
AREA OF OVERLAPPING JURISDICTION, WHERE THE SAME PROGRAM MAY BE RELATED
TO BOTH HEALTH AND SAFETY. THE DEMONSTRATION PROGRAM PROPOSED BY UMWA
IS SUFFICIENTLY CLOSELY RELATED TO SAFETY THAT WE WOULD NOT BE REQUIRED
TO OBJECT IF INTERIOR WERE TO FUND THE PROPOSAL UNDER SECTION 951. WE
WOULD REITERATE THAT SECTION 95U AUTHORIZED ONLY "STUDIES, RESEARCH,
EXPERIMENTS AND DEMONSTRATIONS AS MY BE APPROPRIATE."
IN COMMENTING, AT OUR REQUEST, ON THIS ISSUE, HEW RECOGNIZES THAT
INTERIOR HAS CERTAIN RESPONSIBILITIES UNDER THE ACT IN CONNECTION WITH
EMERGENCY MEDICAL ASSISTANCE AND TRAINING. THUS, HEW POINTS OUT THAT
UNDER SECTION 877(M) OF TITLE 30 (SECTION 317NM) OF THE ACT): E "THE
ACT IMPOSES THE REQUIREMENT TO CONDUCT AN EMERGENCY MEDICAL ASSISTANCE
AND TRAINING PROGRAM UPON UNDERGROUND COAL MINE OPERATORS AND PLACES THE
RESPONSIBILITY FOR THE MONITORING AND ENFORCEMENT OF THE REQUIREMENTS
FOR, AND THE PROVISION OF TECHNICAL ASSISTANCE RELATED TO, SUCH A
PROGRAM UPON THE DEPARTMENT OF THE INTERIOR."
HOWEVER, HEW ALSO STATES THAT IT COULD FUND A PROPERLY DESIGNED
RESEARCH OR DEMONSTRATION PROJECT FOR THE TRAINING OF EMERGENCY MEDICAL
TECHNICIANS AS A HEALTH MATTER UNDER SECTION 951. IT IS NOT NOW
NECESSARY TO DECIDE WHETHER INTERIOR'S FUNDING OF THE UMWA PROPOSAL
WOULD NECESSARILY PREEMPT ANY AUTHORITY WHICH HEW MIGHT HAVE IN THIS
AREA. WE SUGGEST THAT QUESTIONS SUCH AS THIS, INVOLVING THE EXERCISE OF
JURISDICTION IN AREAS WHERE THE BOUNDARY BETWEEN HEALTH AND SAFETY
MATTERS IS NOT CLEAR, MAY BEST BE RESOLVED BY CONSULTATION AND AGREEMENT
BETWEEN HEW AND INTERIOR.
B-188144, NOV 8, 1977
HEADNOTES-UNAVAILABLE
1. WHERE U. S. GOVERNMENT EMPLOYEE WHO SIGNED CONTRACT WITH PRIVATE
PARTY AS "REPRESENTATIVE" OF SOUTH VIETNAMESE GOVERNMENT WAS ACTUALLY
"AGENT" OF U. S. GOVERNMENT, UNITED STATES IS LIABLE TO PRIVATE PARTY
FOR VALID CLAIMS ARISING UNDER CONTRACT ON UNDISCLOSED PRINCIPAL THEORY.
2. IRRECONCILABLY CONFLICTING EVIDENCE AS TO WHETHER OR NOT
CLAIMANT-CONTRACTOR WAS PAID FOR 1 MONTH UNDER CONTRACT HAS NOT CHANGED
ON RECONSIDERATION OF CERTIFICATE OF SETTLEMENT AND IS RESOLVED BY
ACCEPTING GOVERNMENT'S VERSION THAT PAYMENT WAS MADE.
3. CLAIM AGAINST CONTRACTOR FOR REFUND OF OVERPAYMENT BY U.S.
GOVERNMENT NEED NOT BE PURSUED SINCE CONTRACT CALLED FOR PAYMENT IN
SOUTH VIETNAMESE PAISTRES WHICH WOULD BE OF NO MONETARY VALUE AT TIME OF
ANY JUDGMENT.
4. PAYMENT FOR RENDERING OF SERVICES IN TRANSPORTING PETROLEUM
PRODUCTS FROM SOUTH VIETNAM TO SINGAPORE AFTER TERMINATION OF CONTRACT
MAY BE MADE QUANTUM MERUIT BASIS DUE TO CONTRACT IMPLIED FROM FACTS;
HOWEVER, SINCE U. S. GOVERNMENT WAS NOT PARTY TO, OR RESPONSIBLE FOR,
SUBSEQUENT TRANSPORT OF SOUTH VIETNAMESE REFUGEES ORDERED BY SINGAPORE
GOVERNMENT, PAYMENT FOR SUCH SERVICES SHOULD NOT BE MADE.
5. WHERE LAW OF COUNTRY WHICH GOVERNED CONTRACT MADE PAYMENT TO ITS
NATIONAL IN U.S. DOLLARS ILLEGAL, CONTRACT WAS THERFORE AMENDED TO CALL
FOR PAYMENT IN SOUTH VIETNAMESE PIASTRES, AND PAYMENT WAS SO MADE,
PAYMENT NOW IN U. S. DOLLARS WOULD NOT BE PERMISSIBLE.
NAM HAI MARINE LINES:
NAM HAI MARINE LINES APPEALS THE CERTIFICATE OF SETTLEMENT, DATED
JUNE 23, 1977, ISSUED BY OUR CLAIMS DIVISION, REGARDING A CLAIM
AMOUNTING TO $76,000 FOR THE PERIOD OF APRIL 9-JUNE 9, 1975, UNDER
CONTRACT NO. RVNAF-SS-75-2, DATED FEBRUARY 3, 1975. THAT CONTRACT WAS
FOR THE TRANSPORTATION OF PETROLEUM PRODUCTS WITHIN SOUTH VIETNAM AND
WAS SIGNED BY NGUYEN VAN BA AS OWNER OF THE NAM HAI MARINE LINES AND BY
A "REPRESENTATIVE" OF THE SOUTH VIETNAMESE GOVERNMENT. COMPENSATION
UNDER THE CONTRACT WAS ORIGINALLY $38,000 PER MONTH, BUT THIS WAS
CHANGED BY AN AMENDMENT TO THE CONTRACT TO $38,000 TO BE PAID IN THE
EQUIVALENT AMOUNT OF PIASTRES AS DETERMINED BY THE OFFICIAL RATE OF
EXCHANGE ON THE DATE OF PAYMENT. PAYMENT WAS TO BE MADE ON THE NINTH OF
EACH MONTH BY CHECK THROUGH THE NATIONAL BANK OF VIETNAM. ACCORDING TO
THE "REPRESENTATIVE," THE LAST PAYMENT UNDER THE CONTRACT WAS MADE ON
APRIL 26, 1975, IN PIASTRES TO THE WIFE OF MR. BA, COVERING THE APRIL
9-MAY 9 PERIOD. THE CONTRACT WAS TERMINATED ON APRIL 29, 1975. PAYMENT
OF $15,200.04 WAS ALLOWED FOR THE PERIOD OF APRIL 29-MAY 11, 1975, ONLY,
FOR THE FOLLOWING REASONS.
THE DEPARTMENT OF THE ARMY DID NOT BELIEVE THAT A CONTRACT HAD
EXISTED BETWEEN THE CLAIMANT AND THE UNITED STATES GOVERNMENT BECAUSE
THE "REPRESENTATIVE," ALTHOUGH A UNITED STATES GOVERNMENT EMPLOYEE,
SIGNED THE CONTRACT ON BEHALF OF THE SOUTH VIETNAMESE GOVERNMENT.
HOWEVER, INASMUCH AS (1) THE "REPRESENTATIVE" WAS AN EMPLOYEE FROM THE
UNITED STATES GOVERNMENT OFFICE (DAO - DEFENSE ATTACHE OFFICE) WHO HAD,
PRIOR TO THE ADOPTION OF THE "REPRESENTATIVE" CONTRACTING ARRANGEMENT,
PURCHASED PETROLEUM PRODUCTS AND TRANSPORT NEEDS FOR THE SAME PURPOSES
DIRECTLY FOR THE UNITED STATES GOVERNMENT; (2) THE SOUTH VIETNAMESE
GOVERNMENT, UNDER EACH CONTRACTING ARRANGEMENT, MERELY FORWARDED TO THE
UNITED STATES GOVERNMENT A STATEMENT OF ITS PETROLEUM PRODUCT NEEDS TO
BE MET WITHIN BUDGETARY LIMITATIONS; (3) ALL FUNDS UNDER EACH CONTRACT
FOR PAYMENT FOR THE PETROLEUM PRODUCTS AND THE NECESSARY TRANSPORT CAME
FROM THE SAME UNITED STATES-DAO FUNDS; AND (4) THE SOLE REASON FOR
CHANGING THE CONTRACTING ARRANGEMENT WAS THE NEED TO CIRCUMVENT THE ARAB
EMBARGO ON OIL EXPORTS TO THE UNITED STATES, IT WAS FOUND THAT THE
"REPRESENTATIVE" MUST BE CONSIDERED TO HAVE BEEN ACTING AS THE AGENT OF
AN OSTENSIBLY UNDISCLOSED PRINCIPAL - THE UNITED STATES GOVERNMENT. SEE
PACIFIC ROYALTY COMPANY V. WILLIAMS, 227 F.2D 49 (1955); PRASSA V.
CORCORAN, 181 N.E. 2D 138, 24 III. 2D 288 (1962); MCCORD V. ASHBAUGH,
352 P.2D 641, 67 N.M. 61 (1960). A PERSON WHO DEALS WITH AN AGENT OF AN
UNDISCLOSED PRINCIPAL MAY ELECT TO HOLD EITHER THE AGENT OR THE
PRINCIPAL LIABLE. SEE DARR V. KINCHE, 176 SO. 2D 638 (1965); ACORN
PAINTING COMPANY V. BROWN, 385 S.W. 2D 812 (1964); BROWN-WRIGHT HOTEL
SUPPLY CORPORATION V. BAGEN, 145 S.E. 2D 294, 112 GA. APP. 300 (1965).
CONSEQUENTLY, IT WAS DETERMINED THAT RECOVERY AGAINST THE UNITED STATES
GOVERNMENT UNDER THE CONTRACT FOR TRANSPORTATION SIGNED BY THE
"REPRESENTATIVE" AND MR. BA FOR THE NAM HAI MARINE LINES SHOULD BE
CONSIDERED THE SAME AS IF THE CONTRACT HAD BEEN SIGNED BY A
REPRESENTATIVE OF THE UNITED STATES.
AS REGARDED THE CLAIM FOR PAYMENT OF $38,000 FOR THE PERIOD FROM
APRIL 9 TO MAY 9, 1975, STATEMENTS BY THE PARTIES TO THE CONTRACT WHERE
FOUND TO BE IN CONFLICT. THE "REPRESENTATIVE" AND HIS WITNESSES
ASSERTED THAT THE MONEY (SOUTH VIETNAMESE PIASTRES) WAS PAID, ALBEIT IN
A MANNER CONTRARY TO THE TERMS OF THE CONTRACT, TO THE WIFE OF MR. BA.
MR. BA CLAIMED HE WAS NEVER PAID FOR THAT PERIOD. IN VIEW OF THE
IRRECONCILABLY CONFLICTING STATEMENTS ABOUT THE PAYMENT FOR THAT PERIOD,
IT WAS FOUND THAT THE CLAIMANT HAD NOT SUSTAINED THE BURDEN OF
AFFIRMATIVELY PROVING THE MERITS OF THE CLAIM, AND THE AGENCY'S VERSION
OF THE EVENTS WAS ACCEPTED THAT MR. BA HAD BEEN PAID THROUGH MAY 9.
GENE PETERS, 56 COMP. GEN. 459 (1977), 77-1 CPD 225. SINCE THE CONTRACT
WAS TERMINATED BEFORE THE TIME PERIOD FOR WHICH MR. BA WAS PAID HAD
ELAPSED, THE QUESTION OF A REFUND TO THE UNITED STATES GOVERNMENT AROSE.
WHEN PAYMENT IN FOREIGN CURRENCY PAYABLE IN THE FOREIGN COUNTRY IS
CALLED FOR IN A CONTRACT, THE VALUE OF ANY JUDGMENT RECOVERY IS BASED
UPON THE VALUE OF THAT FOREIGN CURRENCY AT THE TIME A JUDGMENT IS
RENDERED IN AN AMERICAN COURT. DEUTSCHE BANK FILIALE NURNBERG V.
HUMPHREY, 272 U.S. 517 (1926); TILLMAN V. RUSSO ASIATIC BANK, 51 F.2D
1023 (1931). SINCE THE SOUTH VIETNAMESE PIASTRE APPARENTLY HAD NO
PRESENT VALUE AND MAY HAVE HAD NO VALUE AT THE TIME THE CONTRACT WAS
TERMINATED AND THE OVERPAYMENT BECAME PAYABLE, ANY CLAIM FOR THE
OVERPAYMENT, IT WAS FOUND, NEED NOT BE PURSUED.
REGARDING THE MATTER OF THE DELIVERY OF THE PETROLEUM PRODUCTS THAT
MR. BA HAD ON BOARD AT THE TIME OF THE TERMINATION OF THE CONTRACT TO
SINGAPORE (APRIL 29-MAY 11), IT WAS FOUND THAT THIS WAS SEPARATE AND
APART FROM THE CONTRACTUAL ARRANGEMENT AND THAT THE CLAIMANT SHOULD BE
REIMBURSED FOR SERVICES ON A QUANTUM MERUIT BASIS. UNDER THE
CIRCUMSTANCES, THE CLAIMANT WAS FACED WITH POSSESSING CARGO WHICH IT
COULD NOT DELIVER UNDER THE CONTRACT. THE CLAIMANT PROTECTED THE CARGO
AND SAFELY DELIVERED IT TO A PORT IN ANOTHER COUNTRY WHERE THE "OWNER"
(THE UNITED STATES GOVERNMENT) COULD ASSERT ITS RIGHTS. THE UNLOADING
OF THE CARGO WAS DONE AT THE SINGAPORE GOVERNMENT'S ORDER. A COPY OF
THE RECEIPT FOR THE DEPOSITED PETROLEUM PRODUCTS WAS RENDERED TO THE
UNITED STATES BY THE CLAIMANT. IT WAS FOUND THAT ORDINARILY THE LAW
WILL NOT IMPLY A PROMISE TO PAY ONE WHO VOLUNTARILY CONFERS A BENEFIT ON
ANOTHER. STEVENS V. CONTINENTAL CAN CO., 308 F.2D 100 (1962); POPE &
TALBOT, INC., B-186431, JULY 22, 1976, 76-2 CPD 69. HOWEVER, IT WAS
DECIDED THAT THE CIRCUMSTANCES ARE SUCH AS TO HAVE CREATED AN IMPLIED
CONTRACT SINCE THE "INFERENCE" OF A PROMISE TO PAY FOR THE SERVICES WAS
EVIDENT. COMPARE POPE & TALBOT, INC., SUPRA; SEE DICTAMATIC
CORPORATION, B-181038, MAY 16, 1974, 74-1 CPD 260; 17 C.J.S. CONTRACTS,
SEC. 6, P. 322; DUNN V. PHOENIX VILLAGE, INC., 213 F. SUPP. 936
(1963); DESKOVICK V. PORZIO, 187 A.2D 610, 78 N.J. SUPR. 82 (1963).
THE CLAIM FOR THE PERIOD OF MAY 11 TO JUNE 9, 1975, WAS DENIED
BECAUSE THAT PERIOD OF TIME HAD BEEN SPENT CARRYING SOUTH VIETNAMESE
REFUGEES TO GUAM UNDER THE ORDER OF THE SINGAPORE GOVERNMENT, AND NO
LIABILITY WAS FOUND SINCE THE UNITED STATES GOVERNMENT WAS NOT A PARTY
TO, OR RESPONSIBLE FOR, THOSE ACTIONS.
THE REQUEST FOR RECONSIDERATION COVERS THE DENIAL OF THE CLAIM FOR
THE PERIOD OF APRIL 9-APRIL 29, 1975. THE CLAIMANT RECOGNIZES FOR THE
PURPOSES OF THIS APPEAL THAT OUR OFFICE MUST ACCEPT THE STATEMENT BY THE
"REPRESENTATIVE" THAT THE CLAIMANT'S WIFE WAS PAID, ALTHOUGH BOTH MR. BA
AND HIS WIFE DISCLAIM BY AFFIDAVITS RECEIPT OF THIS PAYMENT. IT IS
CONTENDED THAT THE ALLEGED PAYMENT DID NOT RELIEVE THE GOVERNMENT OF THE
LEGAL OBLIGATION TO PAY THE PROPER PARTY. MRS. BA ALLEGEDLY HAD NO
INTEREST IN, OR CONNECTION WITH, THE NAM HAI MARINE LINES; PAYMENT TO
MRS. BA WAS NOT PROVIDED FOR IN THE AFOREMENTIONED CONTRACT; AND
ALLEGEDLY NO ONE WITH THE NECESSARY AUTHORITY TO REPRESENT THE NAM HAI
MARINE LINES GAVE THE GOVERNMENT THE RIGHT TO PAY MRS. BA INSTEAD OF THE
CHARTER LINE. FINALLY, THE ALLEGED PAYMENT WAS NOT MADE THROUGH THE
NATIONAL BANK OF VIETNAM (WHICH WAS APPARENTLY CLOSED THAT DAY) OR BY
MEANS OF A CHECK, BOTH OF WHICH WERE REQUIRED BY THE TERMS OF THE
CONTRACT.
WE NOTE THAT BY AN INVOICE, DATED APRIL 20, 1975, MR. BA, ON BEHALF
OF THE NAM HAI MARINE LINES, REQUESTED THAT PAYMENT FOR THE PERIOD OF
APRIL 9-MAY 9 BE MADE IN THE AMOUNT OF $38,000 (U.S.) TO BANK ACCOUNT
NO. 6006 AT THE BANQUE DE L'INDOCHINE IN SINGAPORE. SINCE PAYMENT IN
SUCH A MANNER WOULD ALSO BE CONTRARY TO THE PAYMENT TERMS OF THE
CONTRACT, THIS INDICATES THAT MR. BA WAS NOT REQUIRING STRICT ADHERENCE
TO THOSE TERMS. FURTHERMORE, TWO PARTIES TO A CONTRACT MAY MODIFY THAT
CONTRACT BY MUTUAL CONSENT. ACCORDING TO THE CONTRACTING OFFICER,
PAYMENT WAS MADE TO MRS. BA, WHO WAS "*** ACTING ON BEHALF OF MR. BA
***." SINCE WE ARE CONFRONTED WITH THE SAME FACTS AND ARGUMENT IS
EXISTED IN THE FIRST CONSIDERATION OF THE MATTER, WE HAVE THE SAME
IRRECONCILABLY CONFLICTING STATEMENTS CONCERNING PAYMENT FOR THIS PERIOD
AND AGAIN FIND THAT THE CLAIMANT HAS NOT SUSTAINED THE BURDEN OF
AFFIRMATIVELY PROVING THE MERITS OF THE CLAIM IN THIS REGARD. GENE
PETERS, SUPRA.
IN ADDITION, IT IS CONTENDED THAT THE PAYMENT MADE TO MRS. BA WAS
CLEARLY NOT THE EQUIVALENT OF $38,000 ON THE DAY PAYMENT WAS MADE.
ALLEGEDLY, THE PIASTRE WAS WORTHLESS ON THE DAY OF PAYMENT. APRIL 26,
1975, A FACT WHICH, CLAIMANT CONTENDS, IS RECOGNIZED IN THE CERTIFICATE
OF SETTLEMENT. IT IS FURTHER ARGUED THAT THIS IS NOT THE TYPICAL CASE,
REFERRING TO THE ABOVE COURT CASES OUR OFFICE CITED, WHERE A CONTRACT
CALLS FOR PAYMENT OF A CERTAIN AMOUNT OF A FOREIGN CURRENCY TO BE PAID
IN THAT FOREIGN COUNTRY. HERE, INSTEAD, THE AMOUNT OF PIASTRES TO BE
PAID WAS TO BE MEASURED, ALLEGEDLY, BY THEIR VALUE TO 38,000 U.S.
DOLLARS. THE CONSTANT IN THE PAYMENT EQUATION WAS THE AMOUNT OF
$38,000. THE RISK OF CURRENCY FLUCTUATION HERE WAS FLUCTUATION IN THE
VALUE OF THE DOLLAR, NOT THE PIASTRE.
THE CERTIFICATE OF SETTLEMENT STATED AS FOLLOWS - "SINCE THE SOUTH
VIETNAMESE PIASTRE APPARENTLY HAS NO PRESENT VALUE AND MAY HAVE HAD NO
VALUE AT THE TIME THE CONTRACT WAS TERMINATED ***". IT WAS NOT STATED
THAT THE PIASTRE WAS WORTHLESS THE DAY PAYMENT WAS MADE. WHILE THE
CONTRACTING OFFICER STATES THAT "THERE WAS NO WAY HE (MR. BA) COULD
NEGOTIATE OR DEPOSIT THE PAYMENT ***" - APRIL 26 WAS ON A SATURDAY - HE
ALSO STATES THAT "MOST BANKS" WERE CLOSED, THEREBY RAISING THE
POSSIBILITY THAT MR. BA WAS ABLE THROUGH SOME BANK TO PROFIT FROM THE
PAYMENT. FURTHER, PRESUMABLY THE MONEY COULD HAVE BEEN USED IN SOME
PROFITABLE MANNER NOT CONNECTED WITH BANKS. THAT THESE MEASURES WERE
IMPOSSIBLE OR IMPRACTICABLE HAS NOT BEEN SHOWN.
IN ANY EVENT, THE CONTRACT DID NOT CALL FOR PAYMENT OF $38,000 IN THE
VALUE OF PIASTRES THAT A PERSON DEALING WITHOUT EXCHANGE RATES AND
KNOWING ALL THE FACTS MIGHT HAVE BEEN WILLING TO PAY. PAYMENT IN
PIASTRES WAS TO BE MADE AT THE GOVERNMENT OFFICIAL RATE OF EXCHANGE FOR
THE PIASTRE VIS-A-VIS THE DOLLAR ON THE DAY OF PAYMENT. WHILE THE
CONTRACT ORIGINALLY PROVIDED FOR PAYMENT IN DOLLARS, PAYMENT IN THAT
CURRENCY WAS FOUND TO BE ILLEGAL AND THE CONTRACT WAS MODIFIED TO
PROVIDE FOR PAYMENT IN PIASTRES. WHEN MR. BA REQUESTED (APRIL 20
INVOICE) THAT PAYMENT BE MADE IN DOLLARS AND IN SINGAPORE, THE SOUTH
VIETNAMESE GOVERNMENT REFUSED TO PERMIT EITHER. CONSEQUENTLY, IN VIEW
OF THE FACT THAT PAYMENT WAS MADE IN THE CURRENCY PROVIDED FOR IN THE
CONTRACT AND BY THE METHOD OF VALUATION ALSO PROVIDED FOR THEREIN AND IN
VIEW OF THE FACT THAT TO HAVE DONE OTHERWISE WOULD HAVE BEEN ILLEGAL, WE
DO NOT BELIEVE THAT PAYMENT NOW IN U.S. DOLLARS WOULD BE PERMISSIBLE. A
LEGAL RIGHT WHICH DID NOT EXIST FOR THE CLAIMANT UNDER THE LAW OF THE
COUNTRY WHOSE LAW WOULD GOVERN THE PERFORMANCE OF THAT CONTRACT CANNOT
BE AFFORDED THE CLAIMANT MERELY BECAUSE THE CLAIMANT HAS NOW BROUGHT HIS
CLAIM TO A DIFFERENT FORUM. DEUTSCHE BANK FILIALE NURNBERG V. HUMPHREY,
SUPRA.
ACCORDINGLY, WE DECLINE TO MODIFY THE FINDINGS SET FORTH IN THE
CERTIFICATE OF SETTLEMENT.
B-188265, NOV 8, 1977
HEADNOTES-UNAVAILABLE
1. EMPLOYEE SOLD HER INTEREST IN COOPERATIVELY OWNED APARTMENT UPON
TRANSFER TO NEW DUTY STATION.
EMPLOYEE MAY BE REIMBURSED UNDER FEDERAL TRAVEL REGULATIONS (FPMR
101-7) (MAY 1973) FOR CERTAIN EXPENSES INCLUDING SETTLEMENT FEE CHARGED
FOR TRANSFERRING STOCK AND ASSIGNING LEASE IF SUCH CHARGES ARE CUSTOMARY
AND REASONABLE.
2. EMPLOYEE SOLD HER INTEREST IN COOPERATIVELY OWNED APARTMENT UPON
TRANSFER TO NEW DUTY STATION.
CLAIM FOR LEGAL FEES MAY BE ALLOWED IF CHARGES ARE ITEMIZED SO AS TO
DISTINGUISH BETWEEN REIMBURSABLE COSTS AS PROVIDED UNDER FEDERAL TRAVEL
REGULATIONS (FPMR 101-7) PARA. 2-6.2C (MAY 1973) AND NONREIMBURSALBE
SERVICES SUCH AS LEGAL REPRESENTATION AND ADVICE.
VIRGINIA M ARMSTRONG - CLAIM FOR RELOCATION EXPENSES IN SELLING
COOPERATIVE APARTMENT:
THIS ACTION IS IN RESPONSE TO A REQUEST FOR AN ADVANCE DECISION FROM
MRS. DOLORES T. HODGES, AN AUTHORIZED CERTIFYING OFFICER OF THE
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT (HUD), CONCERNING THE CLAIM
OF MISS VIRGINIA M. ARMSTRONG FOR REIMBURSEMENT OF CERTAIN EXPENSES
INCURRED IN SELLING HER INTEREST IN A COOPERATIVELY OWNED APARTMENT UPON
HER TRANSFER FROM NEW YORK, NEW YORK, TO WASHINGTON, D.C.
THE RECORD INDICATES THAT IN ORDER TO SELL HER INTEREST IN THE
APARTMENT IT WAS NECESSARY FOR MISS ARMSTRONG TO SELL 390 SHARES OF
STOCK IN THE CORPORATION WHICH OWNED THE APARTMENT BUILDING AND TO
ASSIGN HER PROPRIETARY LEASE TO THE BUYER OF THE APARTMENT. IN
CONNECTION WITH THIS TRANSACTION, MISS ARMSTRONG CLAIMED THE FOLLOWING
EXPENSES:
BROKERAGE FEES $3,230.00
LEGAL AND RELATED COSTS 365.15
STATE REVENUE STAMPS 24.38
INCIDENTAL EXPENSES 300.00
_________
$3,919,53
THE CLAIM FOR INCIDENTAL EXPENSES AND ALL BUT $5 OF THE CLAIM FOR
LEGAL AND RELATED COSTS WERE ADMINISTRATIVELY DISALLOWED, AND MISS
ARMSTRONG HAS FILED A RECLAIM VOUCHER FOR THE INCIDENTAL EXPENSES.
THE SUPPORTING DOCUMENTATION SUPPLIED BY MISS ARMSTRONG REVEALS THAT
THE CLAIM FOR INCIDENTAL EXPENSES WAS BASED UPON A $100 FEE CHARGED BY
THE MANAGING AGENT OF THE APARTMENT FOR TRANSFERRING THE STOCK AND
SUPERVISING THE ASSIGNMENT OF THE LEASE AND A $200 FEE CHARGED BY THE
LAW FIRM OF M. S. & I. S. ISAACS FOR "LEGAL SERVICES RENDERED." THE
CLAIM FOR LEGAL COSTS WAS BASED UPON A $350 FEE CHARGED BY THE LAW FIRM
OF TUFO, JOHNSTON & ALLEGAERT FOR "PROFESSIONAL SERVICES" IN PREPARING
DOCUMENTS, ATTENDING THE SETTLEMENT, ADVISING AND COUNSELING MISS
ARMSTRONG, CHARGES OF $10.15 FOR XEROXING AND TRANSPORTATION, AND $5 FOR
TELEPHONE CALLS.
THE AUTHORITY FOR REIMBURSEMENT OF EXPENSES INCURRED BY A TRANSFERRED
EMPLOYEE IN CONNECTION WITH THE SALE OF HIS RESIDENCE AT HIS OLD
OFFICIAL DUTY STATION IS GOVERNED BY 5 U.S.C. SEC. 5724A(A) (1970) AND
THE PROVISIONS OF THE FEDERAL TRAVEL REGULATIONS (FTR), CHAPTER 2, PART
6 (FPMR 101-7) (MAY 1973). WE HAVE HELD THAT AN INTEREST IN A
COOPERATIVELY OWNED BUILDING, WHICH IS SPECIFICALLY REFERRED TO IN
PARAGRAPH 2-6.1C OF THE FTR, IS A FORM OF OWNERSHIP IN A RESIDENCE FOR
WHICH REAL ESTATE EXPENSES MAY BE REIMBURSED AS PROVIDED IN PARAGRAPH
2-6.2. MATTER OF ROYCE R. NEWCOMB, B-183812, MAY 4, 1976; AND
B-177947, JUNE 7, 1973.
WITH REGARD TO THE SETTLEMENT FEE CHARGED BY THE MANAGING AGENT, OUR
OFFICE HAS RECOGNIZED THAT REIMBURSEMENT FOR SUCH EXPENSES IS PERMITTED
UNDER THE FTR BUT LIMITED TO THE EXPENSES CUSTOMARILY PAID BY THE SELLER
IN THE AREA AND TO AMOUNTS CUSTOMARILY CHARGED IN THE LOCALITY. SEE
NEWCOMB, SUPRA, AND B-177947, USPRA. IN DETERMINING THE REASONABLENESS
OF THE CHARGES AND THE CUSTOM IN THE LOCALITY OF ALLOCATING THE CHARGES
TO THE SELLER OR BUYER, THE CERTIFYING OFFICER MUST MAKE A FACTUAL
DETERMINATION BASED UPON AN EXAMINATION OF THE RECORD AND CONSULTATION,
IF NECESSARY, WITH THE LOCAL OR REGIONAL OFFICE OF HUD AS PROVIDED IN
FTR PARAGRAPH 2-6.3C. SEE MATTER OF ROBERT A. ZICH, 54 COMP. GEN. 827
(1975); AND MATTER OF GLEN A. BALLENGER, B-187437, FEBRUARY 7, 1977.
THEREFORE, THE CERTIFYING OFFICER MAY DETERMINE THE REASONABLENESS OF
THE CHARGE AND ALLOW PAYMENT, IF OTHERWISE PROPER.
UNDER THE PROVISIONS OF PARAGRAPH 2-6.2C OF THE FTR, ONLY THE
FOLLOWING LEGAL AND RELATED EXPENSES ARE REIMBURSABLE AS FOLLOWS:
"TO THE EXTENT SUCH COSTS HAVE NOT BEEN INCLUDED IN BROKERS' OR
SIMILAR SERVICES FOR WHICH REIMBURSEMENT IS CLAIMED UNDER OTHER
CATEGORIES, THE FOLLOWING EXPENSES ARE REIMBURSABLE WITH RESPECT TO THE
SALE AND PURCHASE OF RESIDENCES IF THEY ARE CUSTOMARILY PAID BY THE
SELLER OF A RESIDENCE AT THE SOLD OFFICIAL STATION OR IF CUSTOMARILY
PAID BY THE PURCHASER OF A RESIDENCE AT THE NEW OFFICIAL STATION, TO THE
EXTENT THEY DO NOT EXCEED AMOUNTS CUSTOMARILY CHARGED IN THE LOCALITY OF
THE RESIDENCE: COSTS OF (1) SEARCHING TITLE, PREPARING ABSTRACT, AND
LEGAL FEES FOR A TITLE OPINION OR (2) WHERE CUSTOMARILY FURNISHED BY THE
SELLER, THE COST OF A TITLE INSURANCE POLICY; COSTS OF PREPARING
CONVEYANCES, OTHER INSTRUMENTS, AND CONTRACTS AND RELATED NOTARY FEES
AND RECORDING FEES; COSTS OF MAKING SURVEYS, PREPARING DRAWINGS OR
PLATS WHEN REQUIRED FOR LEGAL OR FINANCING PURPOSES; AND SIMILAR
EXPENSES. COSTS OF LITIGATION ARE NOT REIMBURSABLE."
THE RECORD INDICATES THAT MISS ARMSTRONG WAS CHARGED FOR AND
ORIGINALLY CLAIMED TWO SEPARATE AMOUNTS FOR WHAT APPEAR TO BE LEGAL
SERVICES. BASED UPON THE RECORD BEFORE US, IT APPEARS THAT MISS
ARMSTRONG MAY BE REIMBURSED FOR SOME OF THESE CHARGES UNDER PARAGRAPH
2-6.2C OF THE FTR IF A DETAILED STATEMENT ITEMIZING THE LIST OF SERVICES
IS PROVIDED WITH THE DOLLAR AMOUNT SPECIFIED FOR EACH SERVICE SO AS TO
DISTINGUISH BETWEEN REIMBURSABLE AND NONREIMBURSABLE FEES. SEE
BALLENGER, SUPRA, AND DECISIONS CITED THEREIN. CHARGES FOR LEGAL
REPRESENTATION AND ADVICE, HOWEVER, WOULD NOT BE REIMBURSABLE. 48 COMP.
GEN. 469 (1969); AND MATTER OF THOMAS A. MCDONNELL, B-183443, JULY 14,
1975. SIMILARLY, THE ITEMIZED CHARGES FOR TRANSPORTATION AND TELEPHONE
CALLS WOULD NOT BE REIMBURSABLE. MATTER OF JOE J. BACA, B-183102, JUNE
9, 1976; MATTER OF JAMES A. MORGAN, B-183162, JANUARY 27, 1976; AND
MCDONNELL, SUPRA. THE CHARGE FOR XEROXING WOULD BE REIMBURSABLE IF
REASONABLY RELATED THE PREPARATION OF DOCUMENTS.
WE NOTE THAT MISS ARMSTAONG HAS NOT CLAIMED THE FEES CHARGED BY THE
LAW FIRM OF TUFO, JOHNSTON & ALLEGAERT ON HER RECLAIM VOUCHERS. TO THE
EXTENT THAT THE CHARGES OF THIS FIRM DO NOT DUPLICATE CHARGES BY THE
FIRM OF M. S. & I. S. ISAACS AND SUBJECT TO THE PRODUCTION OF THE
NECESSARY DOCUMENTATION AS DISCUSSED ABOVE, IT WOULD APPEAR THAT MISS
ARMSTRONG COULD CLAIM AND BE REIMBURSED FOR FEES CHARGED BY THE LAW FIRM
OF TUFO, JOHNSTON & ALLEGAERT.
IN OUR RECENT DECISION IN MATTER OF GEORGE W. LAY, 56 COMP. GEN. 561
(1977), WE REVIEWED THE POLICY CONCERNING THE EXTENT TO WHICH LEGAL FEES
MAY BE REIMBURSED, AND WE HELD THAT NECESSARY AND REASONABLE LEGAL FEES,
EXCEPT FOR THE FEES AND COSTS OF LITIGATION, MAY BE REIMBURSED IF
CUSTOMARILY CHARGED IN THE LOCALITY OF THE RESIDENTIAL TRANSACTION.
THIS DECISION REPRESENTS A DEPARTURE FROM OUR PRIOR DECISIONS WHICH
REQUIRED ITEMIZATION OF THE LEGAL FEES TO ENSURE THAT ONLY CERTAIN
ENUMERATED SERVICES WERE REIMBURSED. HOWEVER, OUR DECISION IN LAY HAS
BEEN APPLIED PROSPECTIVELY ONLY TO CASES IN WHICH SETTLEMENT OF THE
TRANSACTION TOOK PLACE ON OR AFTER APRIL 27, 1977. SEE MATTER OF JAMES
B. O'BRIEN, B-185548, JULY 19, 1977. SINCE THE SETTLEMENT IN THE
PRESENT CASE OCCURRED ON NOVEMBER 24, 1976 OUR DECISION IN LAY WOULD NOT
BE APPLICABLE TO MISS ARMSTRONG'S CLAIM.
ACCORDINGLY, AFTER A DETERMINATION HAS BEEN MADE BY THE CERTIFYING
OFFICER REGARDING THE REASONABLENESS OF THE CHARGES, THE VOUCHER MAY BE
PAID IN ACCORDANCE WITH THIS DECISION AND THE DETERMINATION OF THE
CERTIFYING OFFICER.
B-189327, NOV 8, 1977
HEADNOTES-UNAVAILABLE
1. WHERE PROTESTER'S ALLEGATION QUESTIONS AFFIRMATIVE DETERMINATION
OF SUBCONTRACTOR RESPONSIBILITY, GAO WILL NOT REVIEW MATTER, EXCEPT
WHERE FRAUD OR MISAPPLICATION OF DEFINITIVE RESPONSIBILITY CRITERIA HAS
BEEN ALLEGED.
2. WHERE FORMALLY DVERTISED SOLICITATION CONTAINS DUPLICATE
SUBCONTRACTOR LISTING AND BID SUBMISSION REQUIREMENTS, AND LOW BID
LISTED TWO DIFFERENT SUBCONTRACTORS ON SEPARATE LISTINGS UNDER SAME WORK
CATEGORY, LOW BID NEED NOT BE REJECTED AS NONRESPONSIVE SINCE RECORD
DISCLOSES NO PRACTICAL OPPORTUNITY TO BID SHOP, BIDDER WAS NOT GIVEN
CHANCE TO CLARIFY BID, AND THERE IS NO LEGAL REASON TO PRECLUDE
CONTRACTING OFFICER FROM MAKING BINDING DETERMINATION AS TO WHAT WAS
INTENDED BY BIDDER BASED ON KNOWLEDGE OF LISTED SUBCONTRACTORS.
GRAMERCY CONTRACTORS, INC.:
GRAMERCY CONTRACTORS, INC. (GRAMERCY), PROTESTS THE AWARD OF A
CONTRACT TO PJR CONSTRUCTION CORPORATION (PJR) PURSUANT TO INVITATION
FOR BIDS (IFB) INY75015 - RNY 74180, ISSUED BY THE GENERAL SERVICES
ADMINISTRATION (GSA), ON MARCH 29, 1977, INVOLVING REPAIRS AND
ALTERATIONS TO THE UNITED STATES CUSTOMS COURT AND FEDERAL OFFICE
BUILDING IN NEW YORK CITY. THE AWARD WAS MADE IN EARLY AUGUST, AND THE
CONTRACT IS SCHEDULED FOR COMPLETION 390 CALENDAR DAYS FROM THE DATE OF
RECEIPT OF NOTICE TO PROCEED, WHICH WAS ISSUED AUGUST 31, 1977.
THE IFB REQUIRED THAT THE BIDDER SUBMIT IN DUPLICATE THE BID FORM AND
A "LIST OF SUBCONTRACTORS" SUPPLEMENT TO THE BID FORM SPECIFYING THE
FIRMS WITH WHOM THE BIDDER WOULD SUBCONTRACT FOR EACH OF THE DESIGNATED
CATEGORIES OF WORK. THE SUBCONTRACTOR LISTING REQUIREMENTS ARE
CONTAINED IN PARAGRAPH 10 OF THE SPECIAL CONDITIONS OF THE IFB, WHICH
PROVIDES IN PERTINENT PART AS FOLLOWS:
"10. LISTING OF SUBCONTRACTORS
"10.1 FOR EACH CATEGORY ON THE LIST OF SUBCONTRACTORS WHICH IS
INCLUDED AS PART OF THE BID FORM, THE BIDDER SHALL SUBMIT THE NAME AND
ADDRESS OF THE INDIVIDUAL OR FIRM WITH WHOM HE PROPOSES TO CONTRACT FOR
PERFORMANCE OF SUCH CATEGORY, PROVIDED, THAT THE BIDDER MAY ENTER HIS
OWN NAME FOR ANY CATEGORY WHICH HE WILL PERFORM WITH PERSONNEL CARRIED
ON HIS OWN PAYROLL (OTHER THAN OPERATORS OF LEASED EQUIPMENT) TO
INDICATE THAT THE CATEGORY WILL NOT BE PERFORMED BY SUBCONTRACT.
"10.2 IF THE BIDDER INTENDS TO SUBCONTRACT WITH MORE THAN ONE
SUBCONTRACTOR FOR A CATEGORY OR TO PERFORM A PORTION OF A CATEGORY WITH
HIS OWN PERSONNEL AND SUBCONTRACT WITH ONE OR MORE SUBCONTRACTORS FOR
THE BALANCE OF THE CATEGORY, THE BIDDER SHALL LIST ALL SUCH INDIVIDUALS
OR FIRMS (INCLUDING HIMSELF) AND STATE THE PROTION (BY PERCENTAGE OR
NARRATIVE DESCRIPTION) OF THE CATEGORY TO BE FURNISHED BY EACH.
"10.5 EXCEPT AS OTHERWISE PROVIDED HEREIN, THE SUCCESSFUL BIDDER
AGREES THAT HE WILL NOT HAVE ANY OF THE LISTED CATEGORIES INVOLVED IN
THE PERFORMANCE OF THIS CONTRACT PERFORMED BY ANY INDIVIDUAL OR FIRM
OTHER THAN THOSE NAMED FOR THE PERFORMANCE OF SUCH CATEGORIES.
"10.11 NOTWITHSTANDING ANY OF THE PROVISIONS OF THIS CLAUSE, THE
CONTRACTING OFFICER SHALL HAVE AUTHORITY TO DISAPPROVE OR REJECT THE
EMPLOYMENT OF ANY SUBCONTRACTOR HE HAS DETERMINED NONRESPONSIBLE OR WHO
DOES NOT MEET THE REQUIREMENTS OF AN APPLICABLE SPECIALIST OR COMPETENCY
OF BIDDER CLAUSE.
"10.14 IF THE BIDDER FAILS TO COMPLY WITH THE REQUIREMENTS OF
SUBPARAGRAPHS 10.1, 10.2 OR 10.3 OF THIS CLAUSE, THE BID WILL BE
REJECTED AS NONRESPONSIVE TO THE INVITATION."
THE LIST OF SUBCONTRACTORS CONTAINED EIGHT CATEGORIES, TWO OF WHICH
WERE "SPRINKLERS & PLUMBING" AND "HEATING, VENTILATING, AIR
CONDITIONING" (HVAC). THE FORMER CATEGORY WAS DIVIDED, BY PJR, INTO TWO
SEPARATE CATEGORIES WITH ALL COUNTIES SPRINKLERS, INC. (ALL COUNTIES),
LISTED FOR ONLY THE SPRINKLER WORK AND MATTHEWS PLUBING & HEATING CO.
(MATTHEWS) FOR ONLY THE PLUMBING WORK. WITH RESPECT TO THE LATTER
CATEGORY, ONE LIST OF SUBCONTRACTORS HAD ALL COUNTIES LISTED, WHILE THE
OTHER HAD BECK & SCALAFANI, INC. (BECK).
CITING PARAGRAPH 9 OF THE SPECIAL CONDITIONS OF THE IFB GRAMERCY
CHALLENGES THE COMPETENCY OF ALL COUNTIES TO PERFORM THE HVAC WORK AND
CONTENDS THAT ALL COUNTIES DID NOT MEET THE REQUIREMENTS OF THE IFB FOR
SPRINKLER CONTRACTOR. BECAUSE OF OUR CONCLUSION BELOW, THE COMPETENCY
OF ALL COUNTIES TO PERFORM HVAC WORK IS ACADEMIC AND WILL NOT BE
CONSIDERED. IN PERTINENT PART, PARAGRAPH 9 OF THE SPECIAL CONDITIONS
PROVIDES:
"9.1 THE BIDDER OR THE SUBCONTRACTOR WHOM THE BIDDER WILL USE FOR
PERFORMANCE OF SPECIAL EQUIPMENT, SUCH AS PISTOL RANGE EQUIPMENT, SHALL
HAVE HAD AT LEAST THERE YEARS' SUCCESSFUL EXPERIENCE INSTALLING AND
SERVICING SUCH EQUIPMENT."
THESE MATTERS ESSENTIALLY CONCERN RESPONSIBILITY OF A SUBCONTRACTOR
WHICH IN TURN MIGHT VERY WELL AFFECT THE RESPONSIBILITY OF THE BIDDER.
SEE FEDERAL PROCUREMENT REGULATIONS SEC. 1-1.1206 (1964 ED. AMEND. 95).
WE DO NOT REVIEW PROTESTS AGAINST AFFIRMATIVE DETERMINATIONS OF
RESPONSIBILITY, UNLESS EITHER FRAUD IS ALLEGED ON THE PART OF PROCURING
OFFICIALS OR WHERE THE SOLICITATION CONTAINS DEFINITIVE RESPONSIBILITY
CRITERIA WHICH ALLEGEDLY HAVE NOT BEEN APPLIED. CENTRAL METAL PRODUCTS,
INC., 54 COMP. GEN. 66 (1974), 74-2 CPD 64; DATA TEST CORPORATION, 54
COMP. GEN. 499 (1974), 74-2 CPD 365, AFFIRMED 54 COMP. GEN. 715 (1975),
75-1 CPD 138. AFFIRMATIVE DETERMINATIONS ARE BASED IN LARGE MEASURE ON
SUBJECTIVE JUDGMENT WHICH ARE LARGELY WITHIN THE DISCRETION OF PROCURING
OFFICIALS WHO MUST SUFFER ANY DIFFICULTIES EXPERIENCED BY REASON OF A
CONTRACTOR'S INABILITY TO PERFORM.
WE AGREE WITH GSA'S POSITION THAT SINCE PARAGRAPH 9 OF THE SPECIAL
CONDITIONS WAS NOT INTENDED TO INCLUDE NORMAL CONSTRUCTION WORK, BUT
ONLY TO COVER SPECIAL EQUIPMENT, THE CLAUSE IS NOT APPLICABLE TO THE
PRESENT SITUATION. THUS, SINCE THE RECORD FAILS TO INDICATE FRAUD ON
THE PART OF PROCURING OFFICIALS AND THERE ARE NO DEFINITIVE
RESPONSIBILITY CRITERIA APPLICABLE TO ALL COUNTIES, WE WILL NOT CONSIDER
THIS ISSUE. COMPARE GEORGE HYMAN CONSTRUCTION COMPANY OF GEORGIA;
WESTINGHOUSE ELEVATOR COMPANY, B-186279, NOVEMBER 11, 1976, 76-2 CPD 401
GRAMERCY CONTENDS THAT PJR'S BID IS NONRESPONSIVE DUE TO THE LISTING
OF DIFFERENT SUBCONTRACTORS FOR HVAC WORK, WHICH ALLOWS PJR TO BID SHOP
BETWEEN THE TWO LISTED COMPANIES SINCE THERE IS A "POSSIBILITY THAT ALL
COUNTIES COULD TAKE ON THE HVAC AT THIS TIME" OR "THAT ALL COUNTIES
MIGHT HAVE SUBMITTED A BID TO PJR FOR THE HVAC WORK WITH THE INTENT TO
SUBCONTRACT OUT SUCH WORK TO ANOTHER FIRM." GRAMERCY OBJECTS TO GSA'S
DETERMINATION (IN RESPONSE TO GRAMERCY'S PROTEST TO GSA) THAT PJR
INTENDED TO USE BECK WHICH IS VIEWED AS, "INEFFECT, SELECTING FOR THE
LOW BIDDER ONE OF THE TWO LISTED HVAC SUBCONTRACTORS SUBMITTED, WHEN THE
BIDDER HAS NOT DONE SO HIMSELF." FURTHER, GRAMERCY CONTENDS THAT SINCE
THE HVAC WORK IS A SUBSTANTIAL PART OF THE CONTRACT, THE CONFLICT IN
PJR'S BID SHOULD NOT BE CHARACTERIZED AS A MINOR INFORMALITY AND
WAIVABLE UNDER THE DE MINIMUS RULE OR ANY OTHER RULE.
GSA'SPOSITION IS THAT PJR'S BID IS RESPONSIVE SINCE "ALL COUNTIES HAS
NOT PERFORMED AND DOES NOT PERFORM HVAC WORK," WHICH MEANS THAT THERE
WOULD BE NO OPPORTUNITY FOR PJR TO BID SHOP BETWEEN ALL COUNTIES AND
BECK. GSA APPEARS TO BASE ITS CONCLUSION UPON THE FACT THAT ALL
COUNTIES' NAME IMPLIES THAT THE FIRM ONLY PERFORMS SPRINKLER WORK. IT
IS GSA'S CONTENTION THAT THE IMPLICATION IS ESPECIALLY STRONG SINCE PJR
DIVIDED THE "SPRINKLERS & PLUMBING" CATEGORY INTO TWO SEPARATE
CATEGORIES. WE NOTE THAT AN INDEPENDENT INQUIRY WAS CONDUCTED BY THE
REGIONAL OFFICE OF GSA CONFIRMING THAT ALL COUNTIES ONLY PERFORMS
SPRINKLER WORK, WHILE NO INQUIRY WAS NECESSARY CONCERNING BECK AS ITS
WORK IS KNOWN TO THE REGIONAL OFFICE. IN THIS CONNECTION, GSA RESPONDS
TO GRAMERCY'S OBJECTION, THAT BY AWARDING THE CONTRACT GSA IS SELECTING
AN HVAC SUBCONTRACTOR FOR THE LOW BIDDER, BY POINTING TO THE WORK ALL
COUNTIES AND BECK PERFORM AND CONCLUDING THAT SINCE ONLY ONE PERFORMS
HVAC, "THERE COULD NOT BE ANY 'SELECTION' BY GSA."
IN ADDITION, GSA VIEWS GRAMERCY'S ALLEGATIONS CONCERNING BID SHOPPING
AS PURE SPECULATION, WHICH WOULD NOT CONSTITUTE SUFFICIENT GROUNDS TO
SUPPORT THE REJECTION OF PJR'S BID AS NONRESPONSIVE. FURTHER, GSA
CHARACTERIZES PJR'S ENTRY OF ALL COUNTIES' NAME UNDER THE HVAC CATEGORY
AS AN "INADVERTENT CLERICAL ERROR," WHICH GSA CONTENDS DOES NOT AFFECT
PJR'S BINDING COMMITMENT TO USE BECK FOR HVAC.
WE DO NOT VIEW THE TERMS OF THE IFB AS REQUIRING THE REJECTION OF
PJR'S BID AS NONRESPONSIVE AND FIND GSA'S VIEW OF THE MATTER PERSUASIVE.
IN OUR OPINION WHAT OCCURRED HERE IS SIMILAR IN PRINCIPLE TO THE
SITUATION IN B-161336, JUNE 23, 1967, WHICH INVOLVED AN ORIGINAL OF A
SUBMITTED BID THAT OFFERED NO PROMPT PAYMENT DISCOUNT, WHILE THE COPIES
SUBMITTED INDICATED A 5-PERCENT DISCOUNT FOR PAYMENTS WITHIN 20 DAYS.
IN THAT CASE, WE CONCLUDED THAT, DESPITE THE DISCREPANCY, THERE WAS NO
QUESTION AS TO THE BIDDER'S INTENTION TO OFFER THE 5 PERCENT DISCOUNT
AND THAT AN AWARD TO THAT BIDDER WAS NOT SUBJECT TO LEGAL OBJECTION.
THE RECORD INDICATES THAT ALL COUNTIES HAS NOT AND DOES NOT PERFORM HVAC
WORK, WHICH ELIMINATED ANY PRACTICAL OPPORTUNITY FOR PJR TO BID SHOP.
WHILE THEORETICALLY PJR MIGHT HAVE INTENDED AWARD TO ALL COUNTIES WITH
THE ACTUAL WORK TO BE PERFORMED BY LOWER-TIER SUBCONTRACTOR, AS A
PARACTICAL MATTER SUCH POSSIBILITY IS SO REMOTE AS NOT TO MERIT SERIOUS
CONSIDERATION SINCE IT IS UNLIKELY ALL COUNTIES COULD BE FOUND
REAPONSIBLE FOR THE HVAC WORK. FURTHER, THE CONTRACTING OFFICER MADE
THE FINAL DETERMINATION AS TO WHICH SUBCONTRACTOR PJR INTENDED TO USE,
WITHOUT GIVING PJR ANY CHANCE TO CLARIFY ITS BID. THIS IS NOT A CASE
WHERE THE BIDDER ATTEMPTED TO RETAIN THE DISCRETION TO SELECT BETWEEN
TWO POSSIBLE SUBCONTRACTORS. AS IN B-161336, SUPRA, IT MERELY INVOLVES
THE ISSUE OF WHICH COPY OF THE LIST OF SUBCONTRACTORS WAS CORRECT.
WHERE ONE COPY LISTS FOR HVAC WORK A FIRM WHICH CLEARLY PERFORMS SUCH
WORK AND THE OTHER COPY LISTS FOR THE WORK A FIRM WHICH JUST AS CLEARLY
DOES NOT PERFORM SUCH WORK, WE AGREE WITH GSA THAT THE FORMER COPY
SHOULD BE ACCEPTED AS THE ONE INTENDED. THERE APPEARS TO BE NO BASIS
FOR REASONABLE DOUBT THAT BECK WAS THE INTENDED HVAC SUBCONTRACTOR AND
THAT THE PLACING OF ALL COUNTIES UNDER HVAC WAS SIMPLY A CLERICAL ERROR.
ACCORDINGLY, THE PROTEST IS DENIED.
B-189391, NOV 8, 1977
HEADNOTES-UNAVAILABLE
WE WILL TAKE NO FURTHER ACTION TO CONSIDER PROTEST RENDERED MOOT BY
CANCELLATION OF SOLICITATION.
ACCO SOLAR CONTROL:
ACCO SOLAR CONTROL (ACCO) PROTESTED THE PROPOSED AWARD OF A CONTRACT
TO ANOTHER BIDDER UNDER INVITATION FOR BIDS (IFB) DAHAO4-77-B-0027
ISSUED BY THE NATIONAL GUARD BUREAU, UNITED STATES PROPERTY AND FISCAL
OFFICER FOR CALIFORNIA.
THE IFB IN QUESTION WAS ISSUED FOR THE INSTALLATION OF REFLECTIVE
FILM ON THE WINDOWS OF THREE BUILDINGS AT THE VAN NUYS AIR NATIONAL
GUARD BASE, CALIFORNIA. ACCO WAS THE SECOND LOW BIDDER AND, IN ITS
PROTEST, CONTENDED THAT THE PRODUCT OFFERED BY THE LOW BIDDER DID NOT
CONFORM TO THE SPECIFICATIONS. ACCO'S PROTEST PREVIOUSLY WAS DENIED BY
THE CONTRACTING ACTIVITY.
WE NOW HAVE BEEN ADVISED THAT THE SOLICITATION HAS BEEN CANCELED.
SINCE THE PROTEST IS THEREFORE MOOT, WE WILL TAKE NO FURTHER ACTION
THEREON.
B-189532, NOV 8, 1977
HEADNOTES-UNAVAILABLE
1. PROTESTER'S TELEPHONE CONVERSATION PRIOR TO BID OPENING
CONCERNING ALLEGEDLY RESTRICTIVE IFB SPECIFICATIONS WAS A TIMELY PROTEST
TO AGENCY SINCE CONVERSATION COVERED SUBJECT MATTER OF PROTEST.
THEREFORE, PROTEST MADE TO GAO WITHIN 10 WORKING DAYS OF BID OPENING
(INITIAL ADVERSE AGENCY UNTIMELY AND NOT FOR CONSIDERATION.
2. SPECIFICATION IN IFB FOR ELECTRICAL SWITCHGEAR WILL NOT BE
QUESTIONED BY GAO SINCE ON BASIS OF EXISTING RECORD IT CANNOT BE
CONCLUDED THAT SPECIFICATIONS WERE IMPOSSIBLE TO MEET AND NOT IN
ACCORDANCE WITH ACTUAL NEEDS OF CONTRACTING AGENCY.
AMERICAN ELECTRIC CONSTRUCTION CO., INC. (AMERICAN), PROTESTS AGAINST
THE AWARD OF PROJECT NO. 402-047 AT THE VETERANS ADMINISTRATION CENTER,
TOGUS, MAINE. THE BASES OF AMERICAN'S PROTEST ARE THAT THE
SPECIFICATIONS FOR THE ELECTRICAL SWITCHGEAR CANNOT BE MET AND THAT
CHANNELING UNDER THE EXISTING HIGH VOLTAGE TRANSFORMER SECTION, WHILE
THE ABOVE IS ENERGIZED, VIOLATES SAFETY REQUIREMENTS.
SINCE AMERICAN DID NOT FILE ITS PROTEST WITH THIS OFFICE UNTIL AFTER
BID OPENING, THE VA QUESTIONS THE TIMELINESS OF THE PROTEST. THE RECORD
REFLECTS THAT AN EMPLOYEE OF AMERICAN TELEPHONICALLY CONTACTED THE
OFFICE OF THE CONTRACTING OFFICER REGARDING THE SOLICITATION PRIOR TO
BID OPENING AND WAS REFERRED TO THE PROJECT ENGINEER. AMERICAN THEN
CONTACTED THE PROJECT ENGINEER AND ASKED FOR CLARIFICATION ON THE
ELECTRICAL SWITCHGEAR. THE VA DOES NOT CONSIDER THE TELEPHONE
CONVERSATION TO BE A PROTEST AND FEELS THE PROTEST BY AMERICAN TO THIS
OFFICE IS UNTIMELY AS HAVING BEEN FILED AFTER BID OPENING.
THE PROPER TIME TO PROTEST A DEFECTIVE SOLICITATION PROVISION UNDER
OUR BID PROTEST PROCEDURES IS PRIOR TO BID OPENING. 4 C.F.R. SEC.
20.2(B) (1) (1976). IF A PROTEST IS TIMELY FILED INITIALLY WITH THE
CONTRACTING AGENCY, ANY SUBSEQUENT PROTEST TO THIS OFFICE WILL BE
CONSIDERED PROVIDED, INTER ALIA, THAT THE PROTEST IF FILED WITH GAO
WITHIN 10 WORKING DAYS OF FORMAL NOTIFICATION OF ACTUAL OR CONSTRUCTIVE
KNOWLEDGE OF INITIAL ADVERSE AGENCY ACTION.
IT IS NOTED THAT FEDERAL PROCUREMENT REGULATIONS (FPR) SEC.
1-2.407-8 (1964 ED. AMEND. 139) PROVIDES THAT IF THE PROTEST IS ORAL AND
THE MATTER CANNOT OTHERWISE BE RESOLVED, WRITTEN CONFIRMATION OF THE
PROTEST SHALL BE REQUESTED. THUS, THE FILING OF AN ORAL PROTEST WITH AN
AGENCY IS PERMISSIBLE UNDER THE FPR. WHILE THE VA DOES NOT CONSIDER THE
TELEPHONE CONVERSATION PRIOR TO BID OPENING TO BE A PROTEST, THE RECORD
INDICATES THAT THE CONVERSATION CONCERNED THE RESTRICTIVENESS OF THE IFB
WITH REGARD TO THE SWITCHGEAR, AND THAT AMERICAN ASKED FOR AN EXTENSION
OF THE BID OPENING DATE IN ORDER TO CORRECT THE SPECIFICATION. DURING
THE CONVERSATION THE PROJECT ENGINEER STATED THAT HE WOULD REFER THE
MATTER TO THE ARCHITECTUAL ENGINEER AND AN AMENDMENT WOULD BE ISSUED IF
NECESSARY. IT WAS NOT UNTIL BID OPENING (JUNE 20, 1977) THAT AMERICAN
WAS AWARE THAT THE VA DID NOT INTEND TO CHANGE THE SPECIFICATION.
THEREFORE, IT IS OUR OPINION THAT, UNDER THESE CIRCUMSTANCES, THE
TELEPHONE CONVERSATION IS TO BE VIEWED AS A PROTEST BY AMERICAN AND THAT
BID OPENING WAS THE INITIAL ADVERSE AGENCY ACTION. AMERICAN FILED ITS
PROTEST WITH THIS OFFICE ON JULY 5, 1977, WHICH WAS WITHIN 10 WORKING
DAYS OF BID OPENING.
THE TRUST OF AMERICAN'S FIRST BASIS OF PROTEST IS THAT THE IFB
SPECIFICATIONS ARE IMPOSSIBLE TO MEET. THE RESPONSIBILITY FOR DRAFTING
PROPER SPECIFICATIONS REFLECTING THE NEEDS OF THE GOVERNMENT IS
PRIMARILY THAT OF THE CONTRACTING AGENCY. THIS OFFICE WILL NOT
SUBSTITUTE ITS JUDGMENT FOR THAT OF THE PROCURING AGENCY UNLESS THERE IS
CLEAR AND CONVINCING EVIDENCE THAT THE SPECIFICATIONS ARE IMPOSSIBLE TO
MEET. PATTERSON CONSTRUCTION CO., B-180290, FEBRUARY 28, 1974, 74-1 CPD
113.
THE VA ADVISES THAT THE ARCHITECTURAL ENGINEER TOOK THE FEDERAL
SPECIFICATIONS ON BREAKERS AND MODIFIED THEM FOR THE SWITCHGEAR. THE
GENERAL CONTRACTOR, WHO WAS AWARDED THE CONTRACT, STATES THAT THE
SPECIFICATION CAN BE MET AND EXCEEDED. FURTHER, WESTINGHOUSE ELECTRIC
CORPORATION (ONE OF SEVERAL POTENTIAL SUBCONTRACTORS) ADVISES THAT ITS
SWITCHGEAR IS IN LINE WITH AND EXCEEDS THE REQUIREMENTS OF THE
SPECIFICATION. THE ABOVE IS IN DIRECT CONFLICT WITH AMERICAN'S BARE
ALLEGATION THAT NO SUPPLIER COULD MANUFACTURE TO THE SPECIFICATION.
UNDER THESE CIRCUMSTANCES, WE CANNOT CONCLUDE THAT THE IFB
SPECIFICATIONS WERE IMPOSSIBLE TO MEET.
AMERICAN'S OBJECTION AGAINST CHANNELING UNDER THE EXISTING HIGH
VOLTAGE TRANSFORMER SECTION WAS NOT RAISED UNTIL AFTER BID OPENING.
ACCORDINGLY, THIS ASPECT OF THE PROTEST IS UNTIMELY AND NOT FOR
CONSIDERATION ON THE MERITS.
THE PROTEST IS DENIED.
B-189578, NOV 8, 1977
HEADNOTES-UNAVAILABLE
1. BIDDER'S FAILURE TO PROVIDE COMPLETE TEST DATA, WHICH IS REQUIRED
TO ENABLE AGENCY TO DETERMINE BIDDER'S ABILITY TO PERFORM, DOES NOT
RENDER BID NONRESPONSIVE AND, THUS, IS DISTINGUISHED FROM SITUATION
WHERE INFORMATION SUBMITTED WITH BID IN RESPONSE TO IFB RESPONSIBILITY
PROVISION AFFIRMATIVELY INDICATES BIDDER WILL NOT PERFORM IN ACCORDANCE
WITH BASIC SPECIFICATION REQUIREMENT.
2. WHERE GAO, IN CONSIDERING PROCUREMENT CONDUCTED PURSUANT TO
FEDERAL GRANT MUST DETERMINE LEGAL EFFECT OF INVITATION REQUIREMENT IN
ACCORDANCE WITH FEDERAL COMPETITIVE BIDDING PRINCIPLES, RATIONALITY OF
GRANTEE AGENCY'S DECISION IS NOT DETERMINATIVE.
CUBIC WESTERN DATA, INC. (RECONSIDERATION):
BY LETTER DATED OCTOBER 21, 1977, CUBIC WESTERN DATA, INC. (CUBIC)
HAS REQUESTED THAT WE RECONSIDER OUR DECISION CUBIC WESTERN DATA, INC.,
B-189578, OCTOBER 7, 1977, 57 COMP. GEN. ___ (1977), 77-2 CPD ___. OUR
DECISION WAS ISSUED IN RESPONSE TO A REQUEST FOR AN OPINION FROM THE
UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF GEORGIA IN
CONNECTION WITH ITS CONSIDERATION OF QONNAR CORPORATION V. THE
METROPOLITAN ATLANTA RAPID TRANSIT AUTHORITY, CIVIL ACTION 77-1218A.
OUR DECISION CONCERNED THE RESPONSIVENESS OF THE BID SUBMITTED BY
DUNCAN INDUSTRIES (DUNCAN), A DIVISION OF QONNAR CORPORATION, UNDER AN
INVITATION FOR BIDS (IFB) ISSUED BY THE METROPOLITAN ATLANTA RAPID
TRANSIT AUTHORITY (MARTA) FOR THE DESIGN, FURNISHING AND INSTALLATION OF
THE FARE COLLECTION SYSTEM FOR MARTA'S RAPID RAIL TRANSITE SYSTEM. THE
PROCUREMENT IS TO BE FUNDED IN SUBSTANTIAL PART (80 PERCENT) BY A GRANT
FROM THE URBAN MASS TRANSPORTATION ADMINISTRATION.
WE CONCLUDED THAT DUNCAN'S LOW BID SHOULD NOT BE REJECTED AS
NONRESPONSIVE BECAUSE OF ITS ALLEGED FAILURE TO FURNISH COMPLETE TEST
DATA WITH ITS BID. WE HELD THAT THE IFB REQUIREMENT FOR THE DATA WHICH
WAS SOLICITED TO ENABLE MARTA TO DETERMINE A BIDDER'S COMPETENCY TO
FURNISH THE "TICKET HANDLER" COMPONENT OF THE FARE COLLECTION SYSTEM,
INVOLVED BIDDER RESPONSIBILITY; THEREFORE, ADDITIONAL INFORMATION WHICH
MARTA OBTAINED AFTER BID OPENING INDICATING THAT DUNCAN "COULD IN FACT
MEET THE PERFORMANCE AND RELIABILITY STANDARDS *** OF THE SPECIFICATIONS
***" COULD PROPERLY BE CONSIDERED.
CUBIC NOW ALLEGES THAT OUR DECISION IS "PATENTLY INCONSISTENT, AND
IRRECONCILABLE" WITH TEST DRILLING SERVICE CO., B-189682, SEPTEMBER 15,
1977, 77-2 CPD 193. WE DISAGREE.
IN TEST DRILLING, THE IFB REQUIRED BIDDERS TO RESPOND TO A "METHOD OF
OPERATIONS" PROVISION, WHICH THE AGENCY INDICATED WAS INCLUDED TO ENABLE
IT TO DETERMINE BIDDER RESPONSIBILITY. IN RESPONDING TO THAT PROVISION,
THE LOW BIDDER STATED THAT IT WOULD USE .375 INCH SPIRAL OR SEAMLESS
STEEL PIPES WITH OUTSIDE DIAMETERS OF 18 AND 20 INCHES AS TEMPORARY WELL
CASINGS FOR THE CONSTRUCTION OF RELIEF WELLS. HOWEVER, THE IFB
SPECIFICATIONS EXPLICITLY REQUIRED CASINGS WITH AN OUTSIDE DIAMETER OF
18 INCHES AND A MINIMUM WALL THICKNESS OF .50 INCH, AND PROHIBITED THE
USE OF SPIRAL-WELD CASINGS. WE AGREED WITH THE AGENCY THAT THE RESPONSE
REPRESENTED AN EXCEPTION TO THE SPECIFICATIONS AND RENDERED THE BID
NONRESPONSIVE. WE STATED:
"THE PURPOSE OF THE PROVISION IN THIS IFB WAS TO DETERMINE HOW THE
BIDDER PROPOSED TO PERFORM THE WORK. IT WAS NOT INTENDED TO PERMIT THE
BIDDER TO CHANGE THE SPECIFICATIONS."
IN CUBIC, THE TEST DATA SUBMITTED WITH DUNCAN'S BID DID NOT REPRESENT
AN ATTEMPT TO CHANGE THE SPECIFICATIONS. THE CASE INVOLVED ONLY AN
INSUFFICIENT RESPONSE TO THE IFB REQUIREMENT. AS POINTED OUT BY CUBIC
IN IT SUBMISSIONS TO THIS OFFICE, DUNCAN'S RESPONSE WAS ALLEGEDLY
DEFICIENT FOR (1) THE FAILURE TO INDICATE THE ABILITY TO FURNISH A
PRODUCT WITH BOTH PAPER AND PLASTIC CAPABILITY; (2) THE FAILURE TO
SPECIFY BARRIER UNLATCH TIME AND (3) THE FAILURE TO FURNISH ALL THE
SOLICITED TEST DATA.
THERE IS, WE BELIEVE, A SIGNIFICANT DIFFERENCE BETWEEN AN OMISSION
AND A SPECIFIC INDICATION THAT THERE WILL NOT BE COMPLIANCE WITH THE
SPECIFICATIONS IF THE BID IS ACCEPTED. AS WE SAID IN TEST DRILLING, HAD
THE PROTESTER NOT MADE ANY "METHOD OF OPERATION" RESPONSE, ITS BID
"WOULD HAVE BEEN RESPONSIVE AND ANY INFORMATION REQUIRED COULD HAVE BEEN
SUBMITTED AFTER BID OPENING." HOWEVER, ONCE THE PROTESTER INSERTED
INFORMATION INDICATING IT WOULD NOT COMPLY WITH THE BASIC
SPECIFICATIONS, THE BID COULD ONLY BE VIEWED AS NONRESPONSIVE. UNLIKE
THE TEST DRILLING SITUATION, DUNCAN'S ALLEGED DEFICIENCY IS IN THE
NATURE OF AN OMISSION, RATHER THAN AN ATTEMPT TO ALTER THE SPECIFICATION
REQUIREMENTS. THUS, WHILE ACCEPTANCE OF THE LOW BID IN TEST DRILLING
WOULD HAVE RESULTED IN AN OBLIGATION TO PERFORM IN A MANNER CONTRARY TO
THE SPECIFICATIONS, IN CUBIC THE CHALLENGED TEST DATA DID NOT REPRESENT
A STATEMENT OF INTENDED NONCOMPLIANCE WITH SPECIFICATIONS, BUT ONLY
(ASSUMING THE TRUTH OF THE ALLEGATIONS) AN INSUFFICIENT BODY OF
INFORMATION TO ENABLE MARTA TO DETERMINE DUNCAN'S ABILITY TO PERFORM.
IT FOLLOWS THAT DUNCAN'S SUBMISSION DID NOT AFFECT ITS LEGAL COMMITMENT
TO ADHERE TO THE SPECIFICATIONS, AND SINCE THE LEGAL OBLIGATION OF
DUNCAN TO PERFORM THE CONTRACT UNDER THE TERMS SOLICITED WAS NOT
IMPAIRED, THE BID WAS RESPONSIVE.
CUBIC ALSO EXPRESSED DISAPPOINTMENT "THAT WE DID NOT GIVE ANY WEIGHT
TO THE MARTA DECISION (THAT DUNCAN'S BID WAS NONRESPONSIVE) OR TO THE
OVERWHELMING FACTS OF RECORD WHICH SUPPORTED THE RATIONALITY OF MARTA'S
ACTIONS." IN CONSIDERING COMPLAINTS REGARDING PROCUREMENTS CONDUCTED
PURSUANT TO FEDERAL GRANTS, THIS OFFICE CONSIDERS WHETHER THERE HAS BEEN
COMPLIANCE WITH APPLICABLE STATUTORY, REGULATORY AND GRANT PROVISIONS
AND ADVISES THE FEDERAL GRANTOR AGENCY ACCORDINGLY. THEREFORE,
ULTIMATELY IT IS THE PROPRIETY OF THE GRANTOR AGENCY'S ACTION IN
CONCURRING OR NOT CONCURRING WITH THE GRANTEE'S DECISION WHICH IS THE
SUBJECT OF OUR REVIEW. IN THIS CASE, THE ESSENTIAL QUESTION INVOLVED
THE LEGAL EFFECT OF THE INVITATION REQUIREMENT TO SUBMIT TEST DATA.
THERE WAS NO QUESTION INVOLVING AGENCY DISCRETION. THUS, WE WERE NOT
CONCERNED WITH DETERMINING THE RATIONALITY OF MARTA'S DECISION BUT WITH
A LEGAL ISSUE WHICH, UNDER THE CIRCUMSTANCES OF THE CASE, WAS TO BE
DETERMINED ON THE BASIS OF FEDERAL COMPETITIVE BIDDING PRINCIPLES AND
THE RELATED DECISIONAL LAW.
OUR PRIOR DECISION IS AFFIRMED.
B-189619(2), B-189330(2), NOV 8, 1977
HEADNOTES-UNAVAILABLE
PROTEST ALLEGING THAT AGENCY AWARDED CONTRACT TO OTHER THAN LOW
BIDDER AND TO BIDDER NOT QUALIFIED UNDER WALSH-HEALEY ACT IS DISMISSED
SINCE THIS OFFICE DOES NOT RENDER DECISIONS ON PROTEST ISSUES WHICH ARE
PENDING BEFORE A COURT OF COMPETENT JURISDICTION.
STEUART PETROLEUM COMPANY; L. A. SWANN OIL COMPANY:
STEUART PETROLEUM COMPANY (STEUART) AND L.A. SWANN OIL COMPANY
(SWANN) HAVE PROTESTED THE AWARD OF A CONTRACT TO ROARDA, INC. (ROARDA)
FOR THE SUPPLY AND DELIVERY OF PETROLEUM PRODUCTS TO VARIOUS DEFENSE
INSTALLATIONS UNDER IFB NO. DSA600-77-B-0003 ISSUED BY THE DEFENSE FUEL
SUPPLY CENTER.
THE ESSENCE OF STEUART'S AND SWANN'S PROTESTS IS THAT ROARDA IS NOT
ENTITLED TO THE AWARD SINCE ITS PRICE IS NOT LOW BECAUSE OF THE METHOD
OF ESCALATION USED BY ROARDA IN ITS BID AND ROARDA IS NOT QUALIFIED AS A
REGULAR DEALER UNDER THE WALSH-HEALEY ACT, 41 U.S.C. SECS. 35-45
(1970), SINCE IT HAS NO COMMERCIAL BUSINESS AND DOES NOT HAVE STORAGE
FACILITIES OR MAINTAIN DISTRIBUTION EQUIPMENT SUFFICENT TO HANDLE THE
VOLUME OF DELIVERIES REQUIRED BY THE CONTRACT.
ON AUGUST 11, 1977, STEUART FILED SUIT IN THE UNITED STATES DISTRICT
COURT FOR THE DISTRICT OF COLUMBIA, SEEKING DECLARATORY AND INJUNCTIVE
RELIEF ON THE BASIS THAT ROARDA IS NOT THE LOW BIDDER AND NOT A
QUALIFIED BIDDER UNDER THE WALSH-HEALEY ACT, SUPRA. ON SEPTEMBER 1, THE
ORIGINAL COMPLAINT FILED BY STEUART WAS AMENDED TO ADD SWANN AS AN
ADDITIONAL PARTY PLAINTIFF. A HEARING ON THE MOTION FOR PRELIMINARY
INJUNCTION WAS HELD ON SEPTEMBER 6. BY ORDER DATED OCTOBER 11, 1977, IN
THE CASE OF STEUART PETROLEUM COMPANY V. UNITED STATES OF AMERICA, CIVIL
ACTION NO. 77-1398, THE COURT ISSUED A PRELIMINARY INJUNCTION ORDERING
THE AGENCY PENDENTE LITE TO SET ASIDE THE AWARD TO ROARDA; PROVIDED,
HOWEVER, THAT THE ORDER BE STAYED FOR 60 DAYS TO GIVE THE AGENCY AN
OPPORTUNITY TO RESOLICIT THE REQUIREMENT OR PROCEED IN ANY MANNER
AUTHORIZED BY LAW.
THE SUBJECT MATTER OF STEUART'S AND SWANN'S PROTESTS FILED WITH THIS
OFFICE AND THE SUBJECT MATTER OF THE COURT ACTION ARE ESSENTIALLY THE
SAME. SINCE IT DOES NOT APPEAR FROM THE COMPLAINT OR ANY OF THE BRIEFS
THAT THE PROTESTERS ARE SEEKING INJUNCTIVE RELIEF FROM THE COURT PENDING
A DECISION BY THIS OFFICE BUT RATHER ARE SEEKING A FINAL ADJUDICATION OF
THE MERITS BY THE COURT, AND SINCE WHATEVER ACTION THE COURT MAY TAKE
ASSUMES PRECEDENCE OVER A DECISION BY THIS OFFICE, WE DECLINE TO FURTHER
CONSIDER THE PROTEST. 4 C.F.R. 20.10 (1977). SEE ALSO NARTRON
CORPORATION, B-178224, B-179173, JULY 17, 1974, 74-2 CPD 35; COMPUTER
MACHINING TECHNOLOGY CORPORATION, B-181440, B-182152, B-184335, FEBRUARY
9, 1976, 76-1 CPD 80; NORTHERN LINEN CO., B-188811, MAY 10, 1977, 77-1
CPD 331.
THE PROTEST IS DISMISSED.
B-189855, NOV 8, 1977
HEADNOTES-UNAVAILABLE
1. PROTEST THAT INDIVIDUAL ITEM AWARDS WERE PROHIBITED BY
SOLICITATION IS DENIED. PARAGRAPH 10(C) OF STANDARD FORM 22 PROVIDES
FOR SEPARATE AWARDS.
2. CONTRACTOR'S REQUEST TO BE PERMITTED TO WITHDRAW ITS BID BECAUSE
THERE WAS NO MEETING OF MINDS PRIOR TO ACCEPTANCE OF ITS BID AS TO
NUMBER OF UNITS TO BE INCLUDED IN AWARD UNDER IFB AWARD PROVISION, IS
DENIED SINCE AGENCY WAS UNAWARE OF CONTRACTOR'S INTERPRETATION OF IFB
PRIOR TO AWARD.
FEDERAL CONTRACTING CORPORATION:
FEDERAL CONTRACTING CORPORATION (FEDERAL), THE LOW AGGREGATE BIDDER
UNDER INVITATION FOR BIDS (IFB) NO. DAKF57-77-B-0017, ISSUED BY THE
DEPARTMENT OF THE ARMY, FORT LEWIS, WASHINGTON, PROTESTS THE AWARD OF A
CONTRACT TO MCMULLEN ELECTRIC, INC., FOR ITEM 2 OF THE IFB.
THE IFB SOLICITED BIDS FOR THE INSTALLATION OF SMOKE DETECTORS IN TWO
SPECIFIED FAMILY HOUSING AREAS, DESIGNATED AS ITEMS 1 (206 UNITS) AND 2
(433 UNITS). NOTWITHSTANDING FEDERAL'S LOW AGGREGATE BID FOR BOTH
ITEMS, THE PROCURING ACTIVITY DETERMINED THAT BY AWARDING SEPARATE
CONTRACTS TO FEDERAL AND MCMULLEN, THE LOW BIDDERS RESPECTIVELY FOR
ITEMS 1 AND 2, THE ARMY WOULD RECEIVE A LOWER OVERALL PRICE THAN IF
AWARD WERE MADE TO FEDERAL IN THE AGGREGATE. ACCORDINGLY, ITEM 1 WAS
AWARDED TO FEDERAL, AND ITEM 2 TO MCMULLEN.
FEDERAL ALLEGES THAT THE IFB FAILED TO PROVIDE NOTIFICATION TO
PROSPECTIVE BIDDERS OF THE POSSIBILITY OF MULTIPLE AWARDS.
HOWEVER, PAGE 2 OF THE IFB BIDDING SCHEDULE INCLUDED A SECTION
ENTITLED "BASIS OF AWARD" WHICH INSTRUCTED BIDDERS TO "SEE PARAGRAPH 10,
STANDARD FORM 22", WHICH WAS LIKEWISE INCLUDED IN THE IFB PACKAGE.
PARAGRAPH 10(C) THEREOF PROVIDED THAT:
"THE GOVERNMENT MAY ACCEPT ANY ITEM OR COMBINATION OF ITEMS OF A BID,
UNLESS PRECLUDED BY THE INVITATION FOR BIDS OR THE BIDDER INCLUDES IN
HIS BID A RESTRICTIVE LIMITATION."
THE IFB CONTAINED NO PROVISION THAT AWARD WOULD BE MADE ONLY TO THE
BIDDER WHO SUBMITTED THE LOW AGGREGATE BID, AND NEITHER FEDERAL NOR
MCMULLEN INCLUDED AN "ALL OR NONE" TYPE OF RESTRICTIVE LIMITATION IN ITS
BID. THEREFORE, WE FIND NOTHING TO PRECLUDE THE ARMY FROM SPLITTING THE
AWARDS FOR THE TWO ITEMS. SEE 47 COMP. GEN. 658 (1968); HUEY PAPER AND
MATERIAL, STACOR CORPORATION, B-185762, JUNE 16, 1976, 76-1 CPD 382;
ALSO ENGINEERING RESEARCH, INC., B-188731, JUNE 15, 1977, 77-1 CPD 431.
ALTERNATIVELY, FEDERAL CONTENDS THAT SINCE IT SUBMITTED A BID
CONTEMPLATING AN AGGREGATE AWARD, AND SINCE "IT IS OBVIOUS THAT 206
UNITS CANNOT BE INSTALLED FOR THE SAME UNITE PRICE AS 639 UNITS,"
FEDERAL SHOULD BE PERMITTED TO WITHDRAW ITS BID. IT CONTENDS THAT THERE
WAS NO MEETING OF THE MINDS BETWEEN ITSELF AND THE ARMY.
IT APPEARS FROM THE RECORD, HOWEVER, THAT THE ARMY WAS UNAWARE OF
FEDERAL'S INTERPRETATION OF THE IFB AWARD PROVISION UNTIL AFTER THE
AWARD WAS MADE. MOREOVER, WE NOTE THAT THE BID PRICES FOR THE ITEM IN
QUESTION WERE IN LINE. THUS, FEDERAL WAS LOW BIDDER FOR ITEM 1 AT
$4,089.10, WHILE THE NEXT LOW BIDS WERE $4,326, $4,429 AND $4,738. IN
THE CIRCUMSTANCES, WE BELIEVE A VALID CONTRACT EXISTS BETWEEN THE ARMY
AND FEDERAL, AND WE SEE NO BASIS FOR GRANTING THE RELIEF SOUGHT. 45
COMP. GEN. 700, 706 (1966).
ACCORDINGLY, THE PROTEST MUST BE DENIED.
B-190411, NOV 8, 1977
HEADNOTES-UNAVAILABLE
1. NO LEGAL BASIS EXISTS TO PRECLUDE CONTRACT AWARD MERELY BECAUSE
LOW BIDDERS MAY HAVE SUBMITTED BELOW-COST BIDS.
2. GAO DOES NOT REVIEW PROTESTS AGAINST AFFIRMATIVE DETERMINATIONS
OF RESPONSIBILITY EXCEPT IN CASES OF FRAUD OR MISAPPLICATION OF
DEFINITIVE RESPONSIBILITY CRITERIA SET FORTH IN SOLICITATION.
KLEEN-RITE CORPORATION:
THE KLEEN-RITE CORPORATION PROTESTS AWARD TO ANY BIDDER SUBMITTING A
BID PRICE LOWER THAN ITS OWN UNDER INVITATION FOR BIDS NO.
NOO140-77-B-6881, ISSUED AT THE NEWPORT NAVY BASE, NEWPORT, RHODE
ISLAND. IT IS CONTENDED THAT THESE BIDS ARE BELOW ACTUAL LABOR COSTS
AND THAT THIS FACT WOULD RENDER IMPOSSIBLE CONTRACT PERFORMANCE IN
ACCORDANCE WITH THE APPLICABLE SPECIFICATIONS AND THE DEPARTMENT OF
LABOR WAGE DETERMINATION. IT IS ALSO CONTENDED, FOR THIS REASON, THAT
THE BIDDERS IN QUESTION SHOULD BE FOUND TO BE NONRESPONSIBLE.
WITH REGARD TO THE ALLEGATION THAT THE LOW BIDDERS' BID PRICES ARE
UNREASONABLY LOW, WE HAVE REPEATEDLY HELD THAT THE MERE FACT THAT A
BIDDER MAY HAVE SUBMITTED A BELOW-COST BID DOES NOT CONSTITUTE A LEGAL
BASIS FOR PRECLUDING A CONTRACT AWARD. B-178928, JULY 17, 1973; 50
COMP. GEN. 788 (1971); THE BAXTER CORPORATION, B-185017, NOVEMBER 7,
1975, 75-2 CPD 286.
TO PROPERLY REJECT A BID AS BEING UNREASONABLY LOW WOULD REQUIRE A
DETERMINATION THAT THE BIDDER IS NOT RESPONSIBLE. HOWEVER, AS REGARDS
THE ISSUE OF THE INABILITY OF A BIDDER, WHO HAS SUBMITTED A BELOW-COST
BID, TO PERFORM A RESULTANT CONTRACT, OUR OFFICE HAS DISCONTINUED THE
PRACTICE OF REVIEWING BID PROTESTS INVOLVING A CONTRACTING OFFICER'S
AFFIRMATIVE DETERMINATION OF THE RESPONSIBILITY OF A CONTRACTOR EXCEPT
IN CASES INVOLVING ACTIONS BY PROCUREMENT OFFICIALS WHICH ARE TANTAMOUNT
TO FRAUD, OR WHERE THE SOLICITATION CONTAINS DEFINITIVE RESPONSIBILITY
CRITERIA WHICH ALLEGEDLY HAVE NOT BEEN APPLIED. CENTRAL METAL PRODUCTS,
INC., 54 COMP. GEN. 66 (1974), 74-2 CPD 64. SINCE THE RESPONSIBILITY OF
THE LOW BIDDERS HAS NOT BEEN CHALLENGED ON EITHER OF THESE BASES, WE
WILL NOT REVIEW THIS MATTER.
ACCORDINGLY, THE PROTEST IS DENIED.
B-190523, NOV 8, 1977
HEADNOTES-UNAVAILABLE
PROTEST ALLEGING THAT SUCCESSFUL OFFEROR WILL NOT MEET SPECIFICATIONS
IS DISMISSED SINCE IT INVOLVES CHALLENGE TO AFFIRMATIVE DETERMINATION OF
RESPONSIBILITY WHICH IS NOT REVIEWED BY GAO EXCEPT UNDER CIRCUMSTANCES
NOT PRESENT HERE.
MOBIL MAGIC:
MOBIL MAGIC (MOBIL) PROTESTS THE AWARD OF A CONTRACT UNDER REQUEST
FOR PROPOSALS NO. F04699-77-00096 ISSUED BY THE U.S. AIR FORCE,
MCCLELLAN AIR AIR FORCE BASE, CALIFORNIA.
MOBIL CONTENDS THAT THE SUCCESSFUL OFFEROR'S EQUIPMENT WILL NOT MEET
THE SPECIFICATIONS.
THE QUESTION AS TO WHETHER A BIDDER OR OFFEROR SUBMITTING A
RESPONSIVE OR CONFORMING OFFER WILL PERFORM IN ACCORDANCE WITH THE
SPECIFICATIONS INVOLVES A DETERMINATION AS TO THE RESPONSIBILITY OF THE
BIDDER OR OFFEROR. KINGS POINT MACHINERY, B-181031, AUGUST 2, 1974,
74-2 CPD 74; PHILIPS AUDIO VISUAL SYSTEMS CORPORATION, B-185906,
NOVEMBER 11, 1976, 76-2 CPD 399. AFFIRMATIVE DETERMINATIONS OF
RESPONSIBILITY ARE BASED IN LARGE MEASURE ON SUBJECTIVE JUDGMENTS WHICH
ARE LARGELY WITHIN THE DISCRETION OF THE PROCURING OFFICIALS AND ARE NOT
READILY SUSCEPTIBLE TO REASONED REVIEW. SUCH DETERMINATIONS WILL NOT BE
REVIEWED BY THIS OFFICE, EXCEPT UNDER CIRCUMSTANCES NOT ALLEGED TO BE
INVOLVED HERE, SINCE IT IS THOSE OFFICIALS WHO MUST SUFFER ANY
DIFFICULTIES RESULTING BY REASON OF A CONTRACTOR'S INABILITY TO PERFORM.
CENTRAL METAL PRODUCTS, INCORPORATED, 54 COMP. GEN. 56 (1974), 74-2 CPD
64; DATA TEST CORPORATION, 54 COMP. GEN. 499 (1974), 74-2 CPD 365,
AFFIRMED 54 COMP. GEN. 715 (1975), 75-1 CPD 138.
THE PROTEST IS DISMISSED.
B-164031(3).125, NOV 7, 1977
HEADNOTES-UNAVAILABLE
GAO IS PROHIBITED FROM REVIEWING "REASONABLE COST DETERMINATIONS"
UNDER MEDICARE PROGRAM FOR USE BY PROVIDER IN, OR TO COLLATERALLY
ATTACK, SPECIFIC ADMINISTRATIVE ADJUDICATION OR DETERMINATION BY
SECRETARY OF HEW OR HIS AGENT, DUE TO SPECIFIC LANGUAGE OF 42 U.S.C.
SEC. 405(H), MADE APPLICABLE TO MEDICARE PROGRAM BY 42 U.S.C. SEC.
1395II, PROHIBITING ANY GOVERNMENTAL AGENCY FROM REVIEWING FINDINGS OF
FACT OR DECISIONS OF SECRETARY, EXCEPT WHERE OTHERWISE PROVIDED.
LYNNWOOD MANOR HEALTH CARE CENTER-MEDICARE OVERPAYMENTS:
THIS DECISION IS IN RESPONSE TO AN APPEAL FILED BY MR. GORDON H.
FLATTUM, ATTORNEY-IN-FACT FOR LYNNWOOD MANOR HEALTH CARE CENTER,
LYNNWOOD, WASHINGTON, FROM AN OPINION OF SETTLEMENT OF THE CLAIMS
DIVISION OF THE UNITED STATES GENERAL ACCOUNTING OFFICE CONCLUDING THAT
$7,726 WAS DUE THE UNITED STATES. THA ALLEGED DEBT AROSE AS THE RESULT
OF THE PARTICIPATION OF LYNNWOOD MINOR HEALTH CARE CENTER, PROVIDER NO.
50-5102, IN THE MEDICARE PROGRAM OF THE SOCIAL SECURITY ACT, U.S.C. SEC.
1395 ET SEQ., DURING THE PERIOD JANUARY 1, 1967 TO NOVEMBER 22, 1969.
(REFERENCES HEREAFTER, UNLESS OTHERWISE NOTED, WILL BE TO SECTIONS OF
TITLE 42, U.S. CODE.)
UNDER THE MEDICARE PROGRAM, A PROVIDER (1395X(U)) OF COVERED SERVICES
MAY BE PAID "THE REASONABLE COST OF SUCH SERVICES" (1395F(B)), AS
DETERMINED PURSUANT TO SUBSECTION 1395X(V) AND THE APPROPRIATE
REGULATIONS (20 C.F.R. SEC. 405.401 ET SEQ.), FROM THE FEDERAL HOSPITAL
INSURANCE TRUST FUND (1395G) IN LIEU OF CHARGING THE BENEFICIARY
PATIENTS (1395CC(A)(1)(A)), OTHER THAN FOR CERTAIN STATED EXCEPTIONS,
INCLUDING CO-INSURANCE AND DEDUCTIBLES, PROVIDED FOR IN SECTION
1395CC(A)(2)(A). INSTEAD OF RECEIVING PAYMENTS DIRECTLY FROM THE
DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE (HEW), A PROVIDER MAY
NOMINATE A PUBLIC OR PRIVATE ORGANIZATION TO ACT AS A FISCAL
INTERMEDIARY, AND THE SECRETARY OF HEW IS AUTHORIZED TO ENTER INTO AN
AGREEMENT WITH SUCH ORGANIZATION PROVIDING, INTER ALIA, FOR THE
DETERMINATION BY SUCH ORGANIZATION OF THE AMOUNT OF PAYMENTS DUE THE
PROVIDER AND THE MAKING OF SUCH PAYMENTS TO THE PROVIDER ON BEHALF OF
HEW. (1395H(A)). PAYMENTS ARE TO BE MADE TO THE PROVIDER NOT LESS
OFTEN THAN MONTHLY (1395G), AND INTERIM PAYMENTS MAY BE MADE PRIOR TO
INCURRING OF ASSOCIATED COSTS, WITH ANY NECESSARY ADJUSTMENTS ON ACCOUNT
OF PREVIOUSLY MADE OVERPAYMENTS AND UNDERPAYMENTS TO BE MADE ON A
RETROACTIVE BASIS AT THE END OF THE ACCOUNTING PERIOD. (1395G AND
1395X(V)(1)). COST REPORTS ARE REQUIRED FROM PROVIDERS ON AN ANNUAL
BASIS WITH REPORTING PERIODS BASED ON THE PROVIDER'S ACCOUNTING YEAR.
(20 C.F.R. SEC. 405.406(B)). THE FISCAL INTERMEDIARIES ARE TO MAKE
SUCH AUDITS OF THE RECORDS OF PROVIDERS AS MAY BE NECESSARY TO INSURE
THAT THE PAYMENTS ARE PROPER. (1395H(A)).
THE FACTS IN THIS CASE, AS DISCLOSED BY THE FILE, ARE AS FOLLOWS:
LYNNWOOD MANOR HEALTH CARE CENTER (PROVIDER) NOMINATED, AND HEW ENTERED
INTO AN AGREEMENT WITH, MUTUAL OF OMAHA INSURANCE COMPANY (INTERMEDIARY)
TO PERFORM THE FUNCTIONS OF A FISCAL INTERMEDIARY. AFTER RECEIPT OF
PROVIDER'S FIRST COST REPORT COVERING CALENDAR YEAR 1967, INTERMEDIARY
AUDITED PROVIDER'S BOOKS AND RECORDS TO VERIFY THE COSTS REFLECTED IN
THE COST REPORT AND DETERMINED THAT PROVIDER HAD BEEN OVERPAID IN THE
AMOUNT OF $17,084.00. THE COST REPORTS FOR SUCCEEDING PERIODS WERE
SIMILARLY AUDITED. VARIOUS AFJUSTMENTS WERE PERIODICALLY MADE, DUE TO
OVERPAYMENTS AND UNDERPAYMENTS, RESULTING IN AN HEW AND INTERMEDIARY
DETERMINATION THAT $7,726.00 WAS DUE THE UNITED STATES FROM PROVIDER.
DURING THIS PROCESS, PROVIDER DISPUTED CERTAIN OF THE COST DETERMINATION
ADJUSTMENTS. THE MOST SIGNIFICANT OF THE DISPUTED ISSUES CONCERNED:
(1) THE PROPER COST REPORTING METHOD TO BE USED IN COMPLETING THE
REQUIRED REPORTS;
(2) AUTO EXPENSES;
(3) OVERHEAD OR INDIRECT COSTS OF ANCILLARY SERVICES;
(4) ALLOCATION OF GENERAL AND ADMINISTRATIVE EXPENSES TO THE SKILLED
NURSING FACILITY UNIT COST CENTER; AND
(5) ALLOCATION OF THE NURSING DIRECTOR'S SALARY.
SUBSEQUENTLY, PURSUANT TO REGULATIONS PROMULGATED UNDER THE FEDERAL
CLAIMS COLLECTION ACT OF 1966, 31 U.S.C. SECS. 951-953 (1970), THE CLAIM
AGAINST PROVIDER WAS FORWARDED TO OUR CLAIMS DIVISION FOR COLLECTION.
SEE 4 C.F.R. PART 105.
IN A LETTER DATED DECEMBER 15, 1975, FORWARDED TO GAO, PROVIDER
ASSERTED, IN PART, THE FOLLOWING:
"THE MOST PREVALENT ISSUE IS THAT THE INTERMEDIARY, BUREAU OF HEALTH
INSURANCE AND SOCIAL SECURITY ADMINISTRATION REVIEW PERSONNEL ARE SOLE
JUDGE AS TO DETERMINING THE METHOD OF REIMBURSEMENT AND INTERPRETING THE
RELATED REGULATIONS. IN OTHER WORDS, THERE ARE NO REGULATIONS ALLOWING
AN APPEAL TO ANY COURT OR OTHER INDEPENDENT REVIEW. ***
"WE ARE REQUESTING YOUR ASSISTANCE TO OBTAIN AN IMPARTIAL REVIEW ***
AS WE HAVE NO RECOURSE UNDER REGULATION WITH WHICH WE CAN CONTINUE OUR
EFFORTS TO OBTAIN A REASONABLE SETTLEMENT FOR THE SERVICES PROVIDED TO
THE MEDICARE PROGRAM BENEFICIARIES."
THE DIRECTOR OF THE CLAIMS DIVISION, GAO, IN A LENGTHY RESPONSE DATED
MAY 10, 1976, ASSERTED THAT HE BELIEVED THE ADJUSTMENTS MADE WERE
CORRECT AND, ACCORDINGLY, "FURTHER DISAGREEMENTS TO THESE FINDINGS MUST
BE RESOLVED BY LITIGATION." NEVERTHELESS, SUBSEQUENTLY, AT AN INFORMAL
MEETING WITH STAFF OF THAT DIVISION, PROVIDER REQUESTED THAT GAO
ACTUALLY AUDIT ITS COST REPORTS. IN ADDITION, PROVIDER FORMALLY
APPEALED THE RESPONSE OF THE CLAIMS DIVISION TO THE COMPTROLLER GENERAL
FOR A "COMPREHENSIVE REVIEW."
AS NOTED ABOVE, THE CHIEF REASON FOR ITS REQUEST FOR AN AUDIT BY OUR
OFFICE IS THE PROVIDER'S BELIEF THAT HE LACKED A FORUM FOR IMPARTIAL
REVIEW. WE RECOGNIZE THAT THE HEALTH INSURANCE FOR THE AGED ACT
(MEDICARE), TITLE I OF PUB. L. NO. 89-97, APPROVED JULY 30, 1965, 42
U.S.C. SEC. 1395 ET SEQ., ORIGINALLY SPECIFICALLY AUTHORIZED A HEARING
BY THE SECRETARY AND JUDICIAL REVIEW OF THE SECRETARY'S FINAL DECISION
ONLY REGARDING: (1) THE DETERMINATION OF WHETHER AN INDIVIDUAL IS
ENTITLED TO BENEFITS UNDER PART A OR PART B, (2) THE DETERMINATION OF
THE AMOUNTS OF BENEFITS TO WHICH A BENEFICIARY IS ENTITLED UNDER PART A,
(3) THE DETERMINATION THAT AN INSTITUTION IS NOT A PROVIDER OF SERVICES,
AND (4) THE TERMINATION BY THE SECRETARY OF AN AGREEMENT WITH A
PROVIDER. SEE 42 U.S.C. SEC. 1395FF(1970). NO PROVISION WAS MADE FOR
SUCH PROCEEDINGS FOR A PROVIDER DISSATISFIED WITH A FINAL DETERMINATION
OF ITS FISCAL INTERMEDIARY AS TO THE AMOUNT OF PROGRAM REIMBURSEMENT
DUE.
A PROVIDER REIMBURSEMENT REVIEW BOARD WAS CREATED TO HEAR SUCH
PROVIDER COMPLAINTS BY SUBSECTION 243(A) OF THE SOCIAL SECURITY
AMENDMENTS OF 1972, 42 U.S.C. SEC. 1395OO (SUPP. V. 1975), WITH
PROVISION FOR JUDICIAL REVIEW. ITS APPLICATION, HOWEVER, WAS
SPECIFICALLY LIMITED TO COST REPORTS TO PROVIDERS FOR ACCOUNTING PERIODS
ENDING ON OR AFTER JUNE 30, 1973. SUBSECTION 243(C) OF THE SOCIAL
SECURITY AMENDMENTS OF 1972, PUB. L. NO. 92-603, APPROVED OCTOBER 30,
1972, 86 STAT. 1329, 1422. THE ACCOUNTING PERIODS RELEVANT TO THIS CASE
WERE ALL FOR PERIODS ENDING PRIOR TO JUNE 30, 1973; THEREFORE, PROVIDER
IS CORRECT THAT THE PROCEDURES SET FORTH IN THE AMENDMENT ARE NOT
DIRECTLY APPLICABLE TO PROVIDER'S SITUATION.
NEVERTHELESS, DESPITE THE LACK OF STATUTORY REQUIREMENT, PROVIDER WAS
GIVEN VARIOUS ADMINISTRATIVE OPPORTUNITIES TO PRESENT ITS COMPLAINTS.
AT THE REQUEST OF PROVIDER, INTERMEDIARY MADE AN INFORMAL REVIEW OF THE
FINAL ADJUSTMENTS FOR ALL ACCOUNTING PERIODS. WHEN PROVIDER FORMALLY
REQUESTED AN APPEAL FROM THESE ADJUSTMENTS, THE MUTUAL OF OMAHA PROVIDER
APPEALS COMMITTEE DID HOLD A HEARING AND RENDERED A DECISION.
THEREAFTER, THE SOCIAL SECURITY ADMINISTRATION REVIEWED THIS DECISION,
AT THE REQUEST OF PROVIDER, AND DID AUTHORIZE CERTAIN DEDUCTIONS FROM
THE FINAL DETERMINATION OF THE AMOUNT OF OVERPAYMENT. WE APPRECIATE
THAT THESE PROCEEDINGS WERE CONDUCTED BY PRSONNEL OF THE INTERMEDIARY,
THE BUREAU OF HEALTH INSURANCE AND THE SOCIAL SECURITY ADMINISTRATION,
AS AGENTS FOR THE SECRETARY OF HEW AND THAT THE PROVIDER CONTENDS THAT
THESE ENTITIES MAY NOT BE WHOLLY DISINTERESTED. NEVERTHELESS, IT IS OUR
UNDERSTANDING THAT THE COURTS HAVE DETERMINED THAT THIS BASIC
ADMINISTRATIVE STRUCTURE ALONE DOES NOT SO TAINT THE PROCEEDINGS AS TO
RENDER THE REVIEWS LESS THAN IMPARTIAL FOR PURPOSES OF CONSTITUTIONAL
DUE PROCESS. IN THIS REGARD, SEE ST. LOUIS UNIV. V. BLUE CROSS HOSP.
SERV., 537 F.2D 283 (8TH CIR. 1976); WOODLAND NURSING HOME CORP. V.
WEINBERGER, 411 F. SUPP. 501 (S.D.N.Y. 1976); AND FAITH HOSP. SERV. V.
BLUE CROSS HOSP. SERV. OF ST. LOUIS, 393 F. SUPP. 601 (E.D.MO. 1975).
EQUALLY IMPORTANT, WE NOTE THAT NUMEROUS PROVIDERS, DISSATISFIED WITH
DETERMINATIONS MADE, ACTIONS TAKEN, OR PROCEEDINGS UNDERTAKEN BY THE
SECRETARY OR THE INTERMEDIARY REGARDING ACCOUNTING PERIODS ENDING PRIOR
TO JUNE 30, 1973, DID FIND INDEPENDENT FORUMS IN THE COURTS, ALTHOUGH
THE MEDICARE STATUTE THEN IN FORCE DID NOT SPECIFICALLY AUTHORIZE
JUDICIAL REVIEW REGARDING THE PARTICULAR QUESTIONS. SEE, E.G., MOUNT
SINAI HOSPITAL OF GREATER MIAMI, INC., V. WEINBERGER, 376 F. SUPP. 1099
(S.D.FLA. 1974), REV'S ON OTHER GROUNDS 517 F.2D 329 (5TH CIR. 1975),
REHEARING AND REHEARING EN BANC DENIED 522 F.2D 179 (5TH CIR. 1975),
CERT. DENIED 425 U.S. 935 (1976); AQUAVELLA V. RICHARDSON, 437 F.2D 397
(2D CIR. 1971); KINGSBROOK JEWISH MEDICAL CENTER V. RICHARDSON, 486
F.2D 663 (2D CIR. 1973); DR. JOHN T. MACDONALD FOUNDATION, INC., V.
MATHEWS, 534 F.2D 633 (5TH CIR. 1976); ROTHMAN V. HOSPITAL SERVICE OF
SOUTHERN CALIFORNIA, 501 F.2D 956 (9TH CIR. 1975); COLUMBIA HEIGHTS
NURSING HOME HOSPITAL, INC., V. WEINBERGER, 380 F. SUPP. 1066 (M.D.L.
1974); AMERICANA NURSING CENTER, INC., V. WEINBERGER, 387 F. SUPP.
1116 (S.D.III. 1975); SAINT FRANCIS MEMORIAL HOSPITAL V. WEINBERGER,
413 F. SUPP. 323 (N.D. CALIF. 1976); WOODLAND NURSING CORP. V.
WEINBERGER, SUPRA. COMPARE ST. LOUIS UNIV. V. BLUE CROSS HOSP. SERV.,
SUPRA; SCHROEDER NURSING CARE, INC., V. MUTUAL OF OMAHA INS. CO., 311
F. SUPP. 405 (E.D. WIS. 1970). WE NOTE IN PARTICULAR WHITECLIFF, INC.,
V. UNITED STATES, 536 F.2D 347 (CT. CL. 1976), IN WHICH CERTAIN ISSUES
SIMILAR TO THOSE RAISED BY PROVIDER WERE INVOLVED. THESE COURTS FOUNDED
JURISDICTION PRIMARILY UPON THE JUDICIAL REVIEW PROVISIONS OF THE
ADMINISTRATIVE PROCEDURE ACT (APA), AS AMENDED, 5 U.S.C. SECS. 701-706
(1973), PARTICULARLY 5 U.S.C. SEC. 704 PROVIDING IN PART THAT "*** FINAL
AGENCY ACTION FOR WHICH THERE IS NOT OTHER ADEQUATE REMEDY IN A COURT
ARE SUBJECT TO JUDICIAL REVIEW."
ACCORDINGLY, WE CANNOT AGREE WITH THE PROVIDER'S CONTENTION THAT HE
HAD NO RECOURSE TO THE COURT SYSTEM. IN ANY EVENT, HOWEVER, WE MUST
CONCLUDE THAT GAO IS PRECLUDED FROM CONSIDERING THIS MATTER FURTHER BY
SUBSECTION 205(H) OF THE SOCIAL SECURITY ACT, AS AMENDED, 42 U.S.C. SEC.
405(H) (1970), MADE APPLICABLE TO THE MEDICARE PROGRAM BY SECTION 1872
OF THE SOCIAL SECURITY ACT, 42 U.S.C. SEC. 195II(1970). SUBSECTION
205(H) PROVIDES:
"THE FINDINGS AND DECISIONS OF THE SECRETARY (OF HEW) AFTER A HEARING
SHALL BE BINDING UPON ALL INDIVIDUALS WHO WERE PARTIES TO SUCH HEARING.
NO FINDINGS OF FACT OR DECISION OF THE SECRETARY SHALL BE REVIEWED BY
ANY PERSON, TRIBUNAL, OR GOVERNMENTAL AGENCY EXCEPT AS HEREIN PROVIDED.
NO ACTION AGAINST THE UNITED STATES, THE SECRETARY, OR ANY OFFICER OR
EMPLOYEE THEREOF SHALL BE BROUGHT UNDER SECTION 41 OF TITLE 28 TO
RECOVER ON ANY CLAIM ARISING UNDER THIS SUBCHAPTER."
THERE IS NO PROVISION IN CHAPTER XVIII OF THE SOCIAL SECURITY ACT
(MEDICARE), 42 U.S.C. SEC. 1395 ET SEQ., FOR REVIEW BY GAO OF
"REASONABLE COST DETERMINATIONS" MADE BY THE SECRETARY OR BY HIS AGENT
ON HIS BEHALF. IN VIEW OF THE SPECIFIC LANGUAGE OF SUBSECTION 205(H),
SUPRA, PROHIBITING ANY GOVERNMENTAL AGENCY FROM REVIEWING THE FINDINGS
OF FACT OR DECISIONS OF THE SECRETARY IN SUCH CIRCUMSTANCES, WE MUST
DENY PROVIDER'S REQUEST IN THE PRESENT CONTEXT. WE ARE PROHIBITED FROM
REVIEWING "REASONABLE COST DETERMINATIONS" UNDER THE MEDICARE PROGRAM
FOR USE BY A PROVIDER IN, OR TO COLLATERALLY ATTACK, A SPECIFIC
ADMINISTRATIVE ADJUDICATION OR DETERMINATION OF THE SECRETARY.
SEE 31 COMP. GEN. 695, 708 (1952).
IN SUMMARY, THEREFORE, WE CONCLUDE THAT WE ARE PRECLUDED FROM
CONSIDERING THIS MATTER FURTHER FOR THE PURPOSES OF PROVIDER'S REQUEST
BY SUBSECTION 205(H) OF THE SOCIAL SECURITY ACT, AS AMENDED, 42 U.S.C.
SEC. 405(H)(1970), MADE APPLICABLE TO THE MEDICARE PROGRAM BY SECTION
1872 OF THE SOCIAL SECURITY ACT, 42 U.S.C. SEC. 1395II (1970).
ACCORDINGLY, WE MUST DENY PROVIDER'S REQUEST THAT WE PERFORM AN
INDEPENDENT AUDIT FOR THE PURPOSE OF SETTLING THE GOVERNMENT'S CLAIM
AGAINST HIM.
B-168161, NOV 7,1977,
HEADNOTES-UNAVAILABLE
FORMER OVERSEAS TEACHER REQUESTS RECONSIDERATION OF CLAIMS SETTLEMENT
AND PRIOR DECISIONS DENYING HER CLAIM FOR LIVING QUARTERS ALLOWANCE.
PRIOR DECISIONS ARE SUSTAINED SINCE ARMY'S DETERMINATION THAT HER
PRESENCE IN THE AREA WAS NOT FOR TRAVEL OR FORMAL STUDY IS CONSISTENT
WITH OUR DECISIONS AND IS NOT UNREASONABLE, ARBITRARY, OR CAPRICIOUS.
MRS. D. RUSSELLE HEDLEY - CLAIM FOR LIVING QUARTERS ALLOWANCE: THIS
ACTION IS IN RESPONSE TO THE REQUEST FOR RECONSIDERATION FROM MRS. D.
RUSSELLE HEDLEY OF THE SETTLEMENT ISSUED SEPTEMBER 24, 1973, BY OUR
CLAIMS DIVISION DENYING MRS. HEDLEY'S CLAIM FOR LIVING QUARTERS
ALLOWANCE WHILE EMPLOYED AS A TEACHER WITH THE DEFENSE DEPARTMENT
OVERSEAS DEPENDENTS' SCHOOL SYSTEM. THE QUESTION OF MRS. HEDLEY'S
ENTITLEMENT TO LIVING QUARTERS ALLOWANCE HAS ALSO BEEN THE SUBJECT OF
TWO PRIOR DECISIONS OF OUR OFFICE, B-168161, NOVEMBER 16, 1973, AND MAY
14, 1971.
THE FACTS IN THIS CASE ARE FULLY SET FORTH IN THE CLAIMS DIVISION
SETTLEMENT AND OUR PRIOR DECISIONS AND WILL NOT BE REPEATED HERE EXCEPT
WHERE PERTINENT. IN REQUESTING RECONSIDERATION MRS. HEDLEY AGAIN
STATES THAT HER PRESENCE IN GERMANY WAS ATTRIBUTABLE TO TRAVEL AND THAT
IT WAS NOT UNTIL AFTER SHE HAD DECIDED TO STAY IN GERMANY AND ACCEPT
EMPLOYMENT THAT HER HUSBAND ENROLLED IN HEIDELBERG UNIVERSITY MEDICAL
SCHOOL. MRS. HEDLEY ACKNOWLEDGES THAT IT WAS HER JOB WHICH DETERMINED
THE LOCATION OF THE FAMILY, BUT SHE ARGUES THAT SHE SOUGHT EMPLOYMENT SO
THAT SHE COULD REMAIN IN GERMANY AND TRAVEL WHILE EMPLOYED.
UNDER THE AUTHORITY OF SECTION 7 OF PUBLIC LAW 86-91, 73 STAT. 213,
216 (1959), OVERSEAS TEACHERS ARE ENTITLED TO QUARTERS ALLOWANCE "UNDER
REGULATIONS WHICH SHALL BE PRESCRIBED BY OR UNDER THE AUTHORITY OF THE
PRESIDENT." THOSE REGULATIONS, THE STANDARDIZED REGULATIONS (GOVERNMENT
CIVILIANS, FOREIGN AREAS), AS QUOTED AT LENGTH IN OUR DECISION OF
NOVEMBER 16, 1973, PROVIDE IN SECTION 031.12D THAT AN EMPLOYEE WHO IS
HIRED AT THE OVERSEAS POST MUST HAVE BEEN TEMPORARILY IN THE FOREIGN
AREA FOR TRAVEL OR FORMAL STUDY PRIOR TO THEIR BEING HIRED. AS WE HELD
IN RONALD H. DAVIS, 54 COMP. GEN. 149 (1974), THE DETERMINATION OF
WHETHER AN INDIVIDUAL'S PRESENCE IN A FOREIGN AREA IS FOR TRAVEL OR
FORMAL STUDY IS ONE WHICH, TO A LARGE DEGREE, INVOLVES THE EXERCISE OF
JUDGMENT AND DISCRETION.
THE DEPARTMENT OF THE ARMY'S DETERMINATION THAT MRS. HEDLEY'S TRAVEL
TO THE FOREIGN AREA WAS FOR THE PURPOSE OF SEEKING EMPLOYMENT IS
CONSISTENT WITH OUR DECISIONS. SEE B-141723, FEBRUARY 2, 1961.
AS STATED IN OUR PRIOR DECISION OF MAY 14, 1971, B-168161, WE CAN
TAKE EXCEPTION TO SUCH A DETERMINATION ONLY IF IT IS FOUND TO BE
UNREASONABLE, ARBITRARY, OR CAPRICIOUS. WE HAVE REVIEWED THE ARGUMENTS
PRESENTED BY MRS. HEDLEY IN REQUESTING RECONSIDERATION, BUT WE CANNOT
SAY THAT THE ARMY'S DETERMINATION WAS UNREASONABLE.
ACCORDINGLY, WE SUSTAIN OUR CLAIMS SETTLEMENT AND OUR PRIOR
DECISIONS.
B-189122, NOV 7, 1977
HEADNOTES-UNAVAILABLE
AT THE TIME HE WAS NOTIFIED OF TRANSFER, EMPLOYEE WAS PROHIBITED BY
COURT ORDER FROM RESIDING IN HIS HOUSE AT OLD OFFICIAL STATION PENDING
HIS DIVORCE. HE WAS ORDERED TO MAKE ALL MORTGAGE PAYMENTS DURING THIS
PERIOD AND WAS EVENTUALLY AWARDED THE HOUSE BY THE COURT. SINCE
EMPLOYEE WOULD HAVE RESIDED IN HOUSE BUT FOR COURT ORDER, HE HAS
SUBSTANTIALLY COMPLIED WITH THE OCCUPANCY REQUIREMENT OF PARA. 2-6.1D OF
THE FTR (FPMR 101-7, MAY 1973). THEREFORE, REIMBURSEMENT OF REAL ESTATE
EXPENSES WAS PROPER AND COLLECTION ACTION NEED NOT BE INITIATED.
B-177343, MARCH 7, 1973, DISTINGUISHED.
JESSE A. GREER - REAL ESTATE EXPENSES:
THIS ACTION IS IN RESPONSE TO A LETTER OF MAY 13, 1977, FROM R.G.
BORDLEY, CHIEF, ACCOUNTING AND FINANCE DIVISION, DEFENSE LOGISTICS
AGENCY, REQUESTING A DECISION CONCERNING THE ENTITLEMENT OF MR. JESSE
A. GREER TO REIMBURSEMENT OF REAL ESTATE EXPENSES INCURRED IN CONNECTION
WITH THE SALE OF HIS RESIDENCE AT HIS OLD OFFICIAL STATION INCIDENT TO A
PERMANENT CHANGE OF STATION.
THE RECORD SHOWS THAT MR. GREER WAS ASSIGNED TO DEFENSE CONTRACT
ADMINISTRATION SERVICES REGION, ATLANTA, GEORGIA, WITH A DUTY STATION IN
NEW ORLEANS, LOUISIANA. IN FEBRUARY 1976, HE WAS NOTIFIED THAT HE WAS
BEING TRANSFERRED TO CAMERON STATION, ALEXANDRIA, VIRGINIA. AT THE TIME
OF THE NOTIFICATION, MR. GREER OWNED A HOME IN NEW ORLEANS, BUT HE WAS
PROHIBITED FROM LIVING IN THAT HOME BY A COURT ORDER PENDING HIS
DIVORCE. HE WAS RESIDING, THEREFORE, IN AN APARTMENT IN NEW ORLEANS
WHEN NOTIFIED OF HIS TRANSFER. SUBSEQUENT TO THE TRANSFER, MR. GREER
WAS AWARDED THE HOUSE BY THE COURT. HE SOLD THE RESIDENCE AND MADE A
CLAIM FOR $2,950 FOR REAL ESTATE EXPENSES HE HAD INCURRED. ON HIS DD
FORM 1705, "APPLICATION FOR REIMBURSEMENT OF EXPENSES INCURRED BY DOD
CIVILIAN EMPLOYEE UPON SALE OR PURCHASE (OR BOTH) OF RESIDENCE UPON
CHANGE OF DUTY STATION," MR. GREER ASTERISKED HIS CERTIFICATION OF
RESIDENCE WITH THE FOLLOWING NOTE: "INASMUCH AS I WAS SEPARATED FROM MY
WIFE PENDING DIVORCE I WAS NOT RESIDING IN THE FAMILY RESIDENCE AT THE
TIME OF TRANSFER." THIS STATEMENT WENT UNNOTICED AT THE TIME THE CLAIM
WAS REVIEWED AND PAYMENT WAS MADE IN THE SUM OF $2,677.
THE QUESTIONS PRESENTED ARE WHETHER THE PAYMENT OF REAL ESTATE
EXPENSES WAS PROPER IN THESE CIRCUMSTANCES AND, IF WE FIND THAT
REIMBURSEMENT WAS IMPROPER, WHETHER THE AGENCY MUST INSTITUTE COLLECTION
PROCEDURES.
AN EMPLOYEE TRANSFERRED IN THE INTEREST OF THE GOVERNMENT MAY
PROPERLY BE REIMBURSED FOR EXPENSED INCURRED IN CONNECTION WITH THE SALE
OF THE EMPLOYEE'S RESIDENCE AT THE OLD OFFICIAL STATION PURSUANT TO
SECTION 5724A(A) (4) OF TITLE 5, UNITED STATES CODE (1970). THE
IMPLEMENTING REGULATIONS ARE FOUND IN PART 6 OF THE FEDERAL TRAVEL
REGULATIONS (FTR) (FPMR 101-7, MAY 1973). PARAGRAPH 2-6.1 OF THE FTR
PROVIDES, IN PERTINENT PART, AS FOLLOWS:
"2-6.1. CONDITIONS AND REQUIREMENTS UNDER WHICH ALLOWANCES ARE
PAYABLE. TO THE EXTENT ALLOWABLE UNDER THIS PROVISION, THE GOVERNMENT
SHALL REIMBURSE AN EMPLOYEE FOR EXPENSES REQUIRED TO BE PAID BY HIM IN
CONNECTION WITH THE SALE OF ONE RESIDENCE AT HIS OLD OFFICIAL STATION
*** PROVIDED, THAT:
"D. OCCUPANCY REQUIREMENTS. THE DWELLING FOR WHICH REIMBURSEMENT OF
SELLING EXPENSES IS CLAIMED WAS THE EMPLOYEE'S RESIDENCE AT THE TIME HE
WAS FIRST DEFINITELY INFORMED BY COMPETENT AUTHORITY OF HIS TRANSFER TO
THE NEW OFFICIAL STATION."
IN OUR DECISION B-177343, MARCH 7, 1973, WE HELD THAT AN EMPLOYEE WHO
WAS PROHIBITED BY COURT ORDER FROM RESIDING IN A HOME HE OWNED AT HIS
OLD OFFICIAL DUTY STATION COULD NOT PROPERLY BE REIMBURSED THE REAL
ESTATE EXPENSES INCURRED WHEN HE SOLD THAT HOME INCIDENT TO A TRANSFER
OF HIS OFFICIAL DUTY STATION SINCE HE DID NOT FULFILL THE ABOVE
OCCUPANCY REQUIREMENT AS SET FORTH IN PARAGRAPH 4.1D OF OMB CIRCULAR NO.
A-56, THE PREDECESSOR TO THE ABOVE-QUOTED FTR PROVISION. HOWEVER, THE
CLAIMANT IN B-177343, SUPRA, HAD ALREADY BEEN REIMBURSED EXPENSES
INCURRED INCIDENT TO THE TERMINATION OF A LEASE ON HIS RENTED DWELLING
AT THE OLD DUTY STATION. WE RULED THAT THE LAW CONTEMPLATED
REIMBURSEMENT OF THE EXPENSES OF ONLY ONE RESIDENCE TRANSACTION AT THE
OLD OFFICIAL STATION. SINCE THE CLAIMANT HAD ALREADY BEEN REIMBURSED
THE EXPENSE OF TERMINATING HIS LEASE, WE HELD THAT REIMBURSEMENT OF THE
COSTS OF THE SALE OF HIS HOUSE WOULD NOT BE PROPER.
IN THE PRESENT CASE, HOWEVER, MR. GREER HAD BEEN ORDERED TO CONTINUE
TO MAKE ALL MORTGAGE PAYMENTS PENDING HIS DIVORCE, AND THE COURT
EVENTUALLY AWARDED THE HOUSE TO MR. GREER. MOREOVER, MR. GREER STATES
THAT HE WOULD HAVE BEEN RESIDING IN THE HOUSE AT THE TIME HE WAS FIRST
NOTIFIED OF HIS IMPENDING TRANSFER BUT FOR THE COURT ORDER PREVENTING
HIM FROM DOING SO. HE ALSO INDICATES THAT HE WOULD HAVE CONTINUED TO
RESIDE IN THE HOUSE ONCE THE COURT ALLOWED HIM TO DO SO BUT FOR HIS
TRANSFER TO ALEXANDRIA, VIRGINIA. WE ALSO NOTE THAT THERE IS NO
EVIDENCE THAT MR. GREER HAS ALREADY BEEN REIMBURSED EXPENSES ASSOCIATED
WITH ANY OTHER RESIDENCE. THESE CIRCUMSTANCES DISTINGUISH THIS CASE
FROM B-177343, SUPRA. THEREFORE, WE BELIEVE THAT THERE HAS BEEN
SUBSTANTIAL COMPLIANCE WITH THE OCCUPANCY REQUIREMENT OF PARAGRAPH
2-6.1D OF THE FTR. SEE B-164043, MAY 28, 1968; B-165839, JANUARY 31,
1969; AND B-166270, MARCH 21, 1969.
ACCORDINGLY, REIMBURSEMENT OF MR. GREER'S REAL ESTATE EXPENSES ON THE
SALE OF HIS HOUSE WAS PROPER AND NO COLLECTION PROCEDURES NEED BE
INITIATED.
B-189307, NOV 7, 1977
HEADNOTES-UNAVAILABLE
1. IN VIEW OF BROAD DISCRETION PERMITTED CONTRACTING OFFICER IN
DECIDING WHETHER TO CANCEL AN INVITATION AFTER BID OPENING, IT IS NOT
ABUSE OF DISCRETION TO ACCEPT ONLY BID RECEIVED AND NOT CANCEL
PROCUREMENT WHERE THERE WAS NO DELIBERATE EFFORT BY PROCUREMENT ACTIVITY
TO PRECLUDE BIDDER FROM COMPETING, SIGNIFICANT EFFORT TO OBTAIN
COMPETITION WAS MADE AND AWARD WOULD BE MADE AT REASONABLE PRICE.
2. FAILURE TO MEET COMMERCE BUSINESS DAILY (CBD) PUBLICATION
REQUIREMENTS IS NOT IN ITSELF SUFFICIENT BASIS TO INVALIDATE AWARD.
3. DETERMINATION DEALING WITH PRICE REASONABLENESS IS A MATTER OF
ADMINISTRATIVE DISCRETION WHICH WILL NOT BE QUESTIONED BY GAO UNLESS
SUCH DETERMINATION IS UNREASONABLE OR THERE IS A SHOWING OF BAD FAITH OR
FRAUD.
CULLIGAN INCORPORATED, CINCINNATI, OHIO - RECONSIDERATION:
CULLIGAN INCORPORATED, CINCINNATI, OHIO (CULLIGAN) REQUESTS
RECONSIDERATION OF OUR DECISION CULLIGAN INCORPORATE, CINCINNATI, OHIO,
B-189307, SEPTEMBER 29, 1977, 77-2 CPD 242 IN WHICH WE DENIED ITS
PROTEST AGAINST AN AWARD TO THE ONLY FIRM WHICH SUBMITTED A BID. IN OUR
DECISION WE NOTED THAT THE PROCUREMENT HAD BEEN MISCLASSIFIED IN THE
COMMERCE BUSINESS DAILY (CBD) AND THAT THE NAVY INADVERTENTLY FAILED TO
INCLUDE CULLIGAN ON THE BIDDERS LIST OR TO SEND CULLIGAN AN IFB.
MOREOVER, WE STATED THAT BECAUSE CULLIGAN DID NOT RELY ON THE CBD
SYNOPSIS IT WAS NOT PREJUDICED BY THE SYNOPSIS' FAILURE TO STATE THE BID
OPENING DATE.
IN ITS REQUEST FOR RECONSIDERATION, CULLIGAN AGAIN POINTS OUT THE
DEFICIENCIES IN THIS PROCUREMENT: (1) THE FAILURE OF THE CBD SYNOPSIS
TO INCLUDE A BID OPENING DATE; (2) THE MISCLASSIFICATION OF THE CBD
SYNOPSIS; AND, (3) THE FAILURE OF THE NAVAL SEA SYSTEMS COMMAND (NAVY)
TO MAINTAIN AN ADEQUATE AND CURRENT BIDDERS LIST. WE HELD THAT IN VIEW
OF THE BROAD DISCRETION PERMITTED A CONTRACTING OFFICER IN DECIDING
WHETHER TO CANCEL AN INVITATION AFTER OPENING, THE DEFICIENCIES DID NOT
WARRANT SUCH ACTION WHERE THERE IS NO EVIDENCE OF A CONSCIOUS OR
DELIBERATE EFFORT BY THE PROCUREMENT ACTIVITY TO PRECLUDE THE BIDDER
FROM COMPETITION, A SIGNIFICANT EFFORT TO OBTAIN COMPETITION WAS MADE
AND AWARD WOULD BE MADE AT A REASONABLE PRICE.
CULLIGAN NOW CONTENDS THAT THE NAVY ACTED IN A ARBITRARY AND
CAPRICIOUS MANNER IN IGNORING THE DEFICIENCIES IN THIS PROCUREMENT.
CULLIGAN ARGUES THAT THE NAVY'S ERRORS WERE TOO EXTENSIVE AND BLATANT TO
BE IGNORED OR TO BE WITHIN THE AMBIT OF CONTRACTING OFFICER DISCRETION.
ESSENTIALLY CULLIGAN STATES THAT THE FAILURE OF THE NAVY TO ADHERE TO
THE ARMED SERVICES PROCUREMENT REGULATION (ASPR), WHICH HAVE THE FORCE
OF LAW, CONSTITUTED AN ABUSE OF DISCRETION.
WE MUST EMPHASIZE THAT OUR DECISION DID NOT IGNOR, EXCUSE OR CONDONE
THE IRREGULARITIES WHICH EXISTED IN THIS PROCUREMENT. THE DECISION
STATED:
"*** THERE MAY BE SUFFICIENT JUSTIFICATION FOR AWARD TO THE ONLY
BIDDER IF THERE IS A SIGNIFICANT EFFORT TO OBTAIN COMPETITION, *** A
REASONABLY PRICED BID IS RECEIVED AND THERE IS NO DELIBERATE ATTEMPT TO
EXCLUDE A PARTICULAR FIRM. ALTHOUGH THE RECEIPT OF ONLY ONE BID AND THE
FAILURE TO SOLICIT THE PROTESTER IN THIS CASE COULD JUSTIFY A
RESOLICITATION, WE CANNOT CONCLUDE THAT A CONTRARY CONCLUSION IS AN
ABUSE OF DISCRETION."
THUS WE SPECIFICALLY ADDRESSED THE ISSUE OF WHETHER THE CONTRACTING
OFFICER ABUSED HER DISCRETION IN DECIDING NOT TO CANCEL AND RESOLICIT
THE INVITATION. THE FOCUS OF OUR ANALYSIS WAS NOT THE FAILURE OF THE
CONTRACTING OFFICER TO ADHERE STRICTLY TO THE REGULATIONS CONCERNING CBD
SYNOPSIZING OR BIDDERS LIST. RATHER, OUR DECISION WAS DIRECTED TOWARD
THE DISCRETION AFFORDED THE CONTRACTING OFFICER IN DECIDING WHETHER OR
NOT TO CANCEL A SOLICITATION IN LIGHT OF A FAILURE TO FULLY COMPLY WITH
THESE REGULATIONS. WE REMAIN UNCONVINCED THAT THERE WAS AN ABUSE OF THE
DISCRETION BY THE CONTRACTING OFFICER IN THIS REGARD.
CULLIGAN STATES THAT NAVY DID NOT SYNOPSIZE THIS PROCUREMENT IN THE
CBD AT LEAST 10 DAYS BEFORE ISSUANCE OF THE SOLICITATION AS REQUIRED BY
ASPR 1-1003.2 (1976 ED.) AND DID NOT ALLOW SUFFICIENT BIDDING TIME TO
PERMIT BIDDERS AN ADEQUATE OPPORTUNITY TO PREPARE AND SUBMIT THEIR BIDS
AS REQUIRED BY ASPR 2-202.1 (1976 ED.). WE HAVE HELD THAT THE FAILURE
TO MEET THE CBD PUBLICATION REQUIREMENTS IS NOT IN ITSELF A SUFFICIENT
BASIS TO INVALIDATE AN AWARD. B-178967, NOVEMBER 5, 1973.
CULLIGAN ALSO ARGUES THAT THE FORMULA USED TO DETERMINE
REASONABLENESS OF THE PRICE OF THE ONLY BID RECEIVED IS FLAWED. IN OUR
DECISION WE STATED THAT THE NAVY INFORMED OUR OFFICE THAT THE PRICE WAS
IN LINE WITH THE PRIOR CONTRACT PRICE, ALLOWING FOR INFLATION. WE HAVE
HELD THAT A DETERMINATION DEALING WITH PRICE REASONABLENESS IS A MATTER
OF ADMINISTRATIVE DISCRETION WHICH OUR OFFICE WILL NOT QUESTION UNLESS
SUCH DETERMINATION IS UNREASONABLE OR THERE IS A SHOWING OF BAD FAITH OR
FRAUD. ROYSON ENGINEERING COMPANY, B-187327, JANUARY 27, 1977, 77-1 CPD
69. THE PROTESTER HAS NOT ALLEGED BAD FAITH OR FRAUD. MOREOVER, IN OUR
OPINION CULLIGAN HAS NOT SHOWN THE ADMINISTRATIVE DETERMINATION TO BE
UNREASONABLE.
ACCORDINGLY, OUR PRIOR DECISION IS AFFIRMED.
B-189925, NOV 7, 1977
HEADNOTES-UNAVAILABLE
SMALL BUSINESS' PROTEST OF AGENCY'S FINDING THAT IT IS NONRESPONSIBLE
IS DISMISSED WHERE MATTER HAS BEEN REFERRED TO SBA FOR FINAL DISPOSITION
UNDER SECTION 501 OF P.L. 95-89.
DUNLIN CORPORATION:
DUNLIN CORPORATION (DUNLIN), A SMALL BUSINESS, HAS PROTESTED THE U.S.
NAVY'S DETERMINATION THAT DUNLIN HAS BEEN UNABLE TO DEMONSTRATE ITS
RESPONSIBILITY TO PERFORM UNDER SOLICITATIONS NO. N00104-77-B-0773 AND
N00104-77-B-0774.
SECTION 501 OF P.L. 95-89, 91 STAT. 561, AMENDING SECTION 8(B) OF THE
SMALL BUSINESS ACT OF 1958, STATES THAT THE SMALL BUSINESS
ADMINISTRATION (SBA) IS EMPOWERED IN ITS DISCRETION:
"TO CERTIFY TO GOVERNMENT PROCUREMENT OFFICERS AND OFFICERS ENGAGED
IN THE SALE AND DISPOSAL OF FEDERAL PROPERTY, WITH RESPECT TO ALL
ELEMENTS OF RESPONSIBILITY, INCLUDING BUT NOT LIMITED TO CAPABILITY,
COMPETENCY, CAPACITY, CREDIT, INTEGRITY PERSEVERANCE, AND TENACITY, OF
ANY SMALL BUSINESS CONCERN OR GROUP OF SUCH CONCERNS TO RECEIVE AND
PERFORM A SPECIFIC GOVERNMENT CONTRACT. A GOVERNMENT PROCUREMENT
OFFICER OR AN OFFICER ENGAGED IN THE SALE AND DISPOSAL OF FEDERAL
PROPERTY MAY NOT, FOR ANY REASON SPECIFIED IN THE PRECEDING SENTENCE,
PRECLUDE ANY SMALL BUSINESS CONCERN OR GROUP OF SUCH CONCERNS FROM BEING
AWARDED SUCH CONTRACT WITHOUT REFERRING THE MATTER FOR FINAL DISPOSITION
TO THE ADMINISTRATION."
THE NAVY HAS ADVISED US THAT THE MATTER HAS BEEN REFERRED TO SBA FOR
FINAL DISPOSITION.
ACCORDINGLY, THE PROTEST IS DISMISSED.
B-189575, NOV 4, 1977
HEADNOTES-UNAVAILABLE
1. THE QUESTION WHETHER AND TO WHAT EXTENT AUTHORIZED WEIGHTS HAVE
BEEN EXCEEDED IN THE SHIPMENT OF HOUSEHOLD EFFECTS BY MEMBERS OF THE
UNIFORMED SERVICES IS CONSIDERED TO BE A MATTER PRIMARILY FOR
ADMINISTRATIVE DETERMINATION AND ORDINARILY WILL NOT BE QUESTIONED IN
THE ABSENCE OF EVIDENCE SHOWING IT TO BE CLEARLY IN ERROR.
2. EVIDENCE OF THE WEIGHT OF HOUSEHOLD EFFECTS SHIPPED IN A PREVIOUS
PERMANENT CHANGE OF STATION (PCS) MOVE IS NOT RELATIVE NOT SUPPORTIVE IN
DETERMINING THE WEIGHT OF HOUSEHOLD EFFECTS SHIPPED IN A SUBSEQUENT PCS
MOVE.
LIEUTENANT COLONEL ROBERT A. SCHLAPPER, USAF RETIRED:
THIS ACTION IS IN RESPONSE TO A LETTER DATED MAY 31, 1977, FROM
LIEUTENANT COLONEL ROBERT A. SCHLAPPER, USAF, RETIRED, WHICH IN EFFECT
CONSTITUTES AN APPEAL FROM A SETTLEMENT OF THE CLAIMS DIVISION OF THIS
OFFICE DATED APRIL 12, 1977. THAT SETTLEMENT UPHELD A DETERMINATION BY
THE AIR FORCE THAT THE MEMBER IS INDEBTED TO THE UNITED STATES IN THE
AMOUNT OF $1,053.79 RESULTING FROM TRANSPORTATION COSTS ASSOCIATED WITH
SHIPMENT OF MEMBER'S HOUSEHOLD EFFECTS INCIDENT TO A PERMANENT CHANGE OF
STATION (PCS).
IN JUNE 1974 THE MEMBER WAS TRANSFERRED FROM ANDREWS AIR FORCE BASE
(AFB), MARYLAND, TO EDWARDS AFB, CALIFORNIA, AND INCIDENT TO THIS MOVE
THE MEMBER'S HOUSEHOLD EFFECTS WERE SHIPPED TO HIS NEW DUTY STATION BY
COMMERCIAL CARRIER UNDER A GOVERNMENT BILL OF LADING. THE WEIGHT OF
MEMBER'S HOUSEHOLD EFFECTS WAS CERTIFIED TO BE 2,551 LBS. IN EXCESS OF
THE AMOUNT ALLOWED BY REGULATIONS FOR MEMBERS OF THE AIR FORCE OF HIS
RANK. AS A RESULT, THE MEMBER WAS CHARGED $1,053.79 FOR THE COST OF
SHIPPING THE EXCESS WEIGHT. A DISPUTE HAS ARISEN CONCERNING THE
COMPUTATION UPON WHICH THE EXCESS WEIGHT WAS DETERMINED. THE MEMBER
CONTENDS THAT THE EXCESS WEIGHT IS ATTRIBUTABLE TO THE HEAVY WOODEN
CRATES WHICH AT THE TIME OF SHIPMENT OF HIS HOUSEHOLD EFFECTS WERE USED
BY THE AIR FORCE ON AN EXPERIMENTAL BASIS TO PREVENT DAMAGE IN THE
SHIPMENT OF THE MEMBER'S HOUSEHOLD EFFECTS.
THE ADMINISTRATIVE REPORT FROM THE AIR FORCE VERIFIES THAT THE
MEMBER'S HOUSEHOLD EFFECTS WERE SHIPPED UNDER AN EXPERIMENTAL PROGRAM
REFERRED TO AS CODE 2, DOOR-TO-DOOR CONTAINERIZED TRANSPORT PLAN. THE
ADMINISTRATIVE REPORT INDICATES THAT THE CODE 2 SHIPMENTS DIFFER FROM
CODE 1 SHIPMENTS (THE USUAL MODE) IN THAT CODE 2 SHIPMENTS INVOLVED
ADDITIONAL PACKING IN WOODEN CRATES. HOWEVER, IT IS REPORTED THAT ON
CODE 1 THE WEIGHT ON THE TRUCK TRANSPORTING THE HOUSEHOLD GOODS IS THE
TARE WEIGHT WHEREAS ON CODE 2 THE WEIGHT OF THE WOODEN CRATES IS ALSO
INCLUDED IN THE TARE WEIGHT. USING EITHER METHOD THE AIR FORCE ASSERTS
THAT THE MEMBER PAYS ONLY FOR MOVING THE WEIGHT OF THE CONTENTS, NOT THE
CONTAINERS AND PACKING MATERIALS USED IN THE MOVE.
WITH RESPECT TO THE TOTAL WEIGHT OF MEMBER'S HOUSEHOLD EFFECTS, THE
MEMBER ASSERTS THAT THE WOODEN CRATES MUST HAVE BEEN INCLUDED IN THE
TOTAL WEIGHT OF HIS EFFECTS, BECAUSE IN A PRIOR MOVE, IN 1972, HIS
EFFECTS WEIGHED 2,000 LBS. LESS THAN THE 1974 MOVE. IN THE PRIOR MOVE,
THE SHIPMENT WAS MADE BY A CODE 1 METHOD WITHOUT THE HEAVY WOODEN
CRATES.
THE MEMBER APPEALED THE AIR FORCES'S DETERMINATION TO THE CLAIMS
DIVISION OF THIS OFFICE. IN THE SETTLEMENT DATED APRIL 12, 1977, THE
CLAIMS DIVISION DETERMINED THAT THE CHARGES MADE BY THE AIR FORCE FOR
SHIPMENT OF EXCESS WEIGHT OF HOUSEHOLD EFFECTS WERE CORRECT UNDER THE
PREVAILING REGULATIONS.
SECTION 406 OF TITLE 37, UNITED STATES CODE, PROVIDES FOR THE
TRANSPORTATION OF HOUSEHOLD EFFECTS OF MEMBERS OF THE UNIFORMED SERVICES
TO AND FROM SUCH PLACES AND WITHIN SUCH WEIGHT ALLOWANCES AS MAY BE
PRESCRIBED BY THE SECRETARIES CONCERNED. IMPLEMENTING REGULATIONS ARE
CONTAINED IN CHAPTER 8, VOLUME 1 OF THE JOINT TRAVEL REGULATIONS (1
JTR). PARAGRAPH M8003-1, 1 JTR, IN EFFECT AT THE TIME THE MEMBER
TRANSPORTED HIS EFFECTS (CHANGE 256, JUNE 1, 1974) PROVIDES THAT A
MEMBER WITH THE RANK OF LIEUTENANT COLONEL, MAY SHIP 13,000 LBS. OF
HOUSEHOLD EFFECTS AT GOVERNMENT EXPENSE. ADDITIONALLY, THE PRESCRIBED
ALLOWANCE FOR INTERIOR PACKING MATERIALS AS AUTHORIZED BY PARAGRAPH
M8002-1, 1 JTR (CHANGE 256, SUPRA) IS 10 PERCENT OF THE GROSS WEIGHT OF
SUCH SHIPMENT. PARAGRAPH M8007-2, 1 JTR (CHANGE 256, SUPRA) PROVIDES
THAT WEIGHT WHICH EXCEEDS THE AMOUNT PRESCRIBED BY PARAGRAPH M8003-1
WILL BE TRANSPORTED AT THE MEMBER'S EXPENSE.
THE RECORD INDICATES THAT THE MEMBER'S HOUSEHOLD EFFECTS WERE WEIGHED
TWICE, ONCE AT THE POINT OF ORIGIN AND AGAIN AT DESTINATION. THE NET
WEIGHT AT ORIGIN WAS 255 LBS. MORE THAN THE WEIGHT AT DESTINATION, AND
THE LOWER OF THE TWO WEIGHTS, THE WEIGHT AT DESTINATION, WAS USED IN
COMPUTING THE WEIGHT OF THE HOUSEHOLD EFFECTS FOR WHICH THE MEMBER WAS
CHARGED. THE NET WEIGHT AFTER DEDUCTING THE TARE WEIGHT FROM THE GROSS
WEIGHT, WAS COMPUTED TO BE 17,260 LBS. THIS AMOUNT WAS REDUCED BY 10
PERCENT FOR THE ALLOWANCE FOR INTERIOR PACKING AS PROVIDED BY PARAGRAPH
M8002-1, 1 JTR, AND FURTHER REDUCED 264 LBS. FOR PROFESSIONAL BOOKS,
PAPERS AND EQUIPMENT (PBP&E) PURSUANT TO PARAGRAPH M8004, 1 JTR (CHANGE
256, SUPRA). THIS RESULTED IN A NET WEIGHT OF 15,296 LBS., 2,296 LBS.
IN EXCESS OF THE 13,000 LBS. ALLOWABLE. A CHARGE OF 255 LBS. WAS ADDED
FOR PACKING APPLICABLE TO THE EXCESS WEIGHT FOR A TOTAL CHARGE OF 2,551
LBS. FOR EXCESS WEIGHT.
THE QUESTION OF WHETHER AND TO WHAT EXTENT AUTHORIZED WEIGHTS HAVE
BEEN EXCEEDED IN THE SHIPMENT OF HOUSEHOLD EFFECTS, IN CONSIDERED TO BE
A MATTER PRIMARILY FOR ADMINISTRATIVE DETERMINATION AND ORDINARILY WILL
NOT BE QUESTIONED IN THE ABSENCE OF EVIDENCE SHOWING IT TO BE CLEARLY IN
ERROR. SEE B-171877103, DECEMBER 15, 1976; B-158287, FEBRUARY 17,
1966; AND B-180184, AUGUST 21, 1974.
THE ADMINISTRATIVE REPORT FILED BY THE AIR FORCE VERIFIES THAT THE
EXTRA EXPERIMENTAL PACKING CRATES WERE USED BUT CLEARLY ASSERTS THAT THE
MATERIAL USED DID NOT AFFECT THE WEIGHT OF THE MEMBER'S HOUSEHOLD
EFFECTS. THE BILL OF LADING, TARE TICKETS, AND WEIGHT CERTIFICATES
INDICATE THAT THE WEIGHT OF THE CRATES WAS NOT INCLUDED IN THE NET
WEIGHT OF THE MEMBER'S EFFECTS.
IN THE ABSENCE OF SOME EVIDENCE FROM AN OFFICIAL SOURCE THAT THE AIR
FORCE COMPUTATIONS WERE IN ERROR, UNSUPPORTED EVIDENCE QUESTIONING THE
ACCURACY OF SUCH COMPUTATION MAY NOT BE ACCEPTED AS A PROPER BASIS FOR
ALLOWING THE MEMBER'S CLAIM. EVIDENCE OF THE WEIGHT OF HOUSEHOLD
EFFECTS SHIPPED IN A PREVIOUS PCS MOVE IS NOT RELEVANT NOR SUPPORTIVE IN
DETERMINING THE WEIGHT OF HOUSEHOLD EFFECTS SHIPPED IN A SUBSEQUENT PCS
MOVE. SEE B-162530, MARCH 13, 1970; B-175484, JULY 26, 1972, AND
B-189015, SEPTEMBER 6, 1977.
ACCORDINGLY, IN VIEW OF ALL THE FACTS PRESENTED IN THIS CASE, THE
EVIDENCE SUBMITTED BY THE CLAIMANT DOES NOT SHOW THAT THE ADMINISTRATIVE
DETERMINATION MADE BY THE AIR FORCE WAS ERRONEOUS. THEREFORE, THERE IS
NOT BASIS UPON WHICH WE MAY ALLOW HIS CLAIM AND THE ACTION OF THE CLAIMS
DIVISION DISALLOWING THE CLAIM IS SUSTAINED.
B-189908, NOV 4, 1977
HEADNOTES-UNAVAILABLE
PROTEST CHALLENGING ADEQUACY OF FLOAT VALVE SPECIFICATIONS IN RFP
WHICH IS FILED SUBSEQUENT TO DATE FOR RECEIPT OF INITIAL PROPOSALS IS
UNTIMELY AND NOT FOR CONSIDERATION ON MERITS.
MASONEILAN REGULATOR COMPANY:
ON APRIL 11, 1977, PORTSMOUTH NAVAL SHIPYARD ISSUED RFP
N00102-77-Q-0240 FOR THE PROCUREMENT OF SEVEN FLOAT VALVES, WHICH WERE
TO BE MANUFACTURED IN ACCORDANCE WITH DRAWING PREPARED BY MASONEILAN
REGULATOR COMPANY (MASONEILAN). MAY 13, 1977, WAS ESTABLISHED AS THE
DATE FOR RECEIPT OF INITIAL PROPOSALS.
BY LETTER DATED AUGUST 1, 1977, MASONEILAN, ONE OF THE OFFERORS,
PROTESTS THE USE OF ITS DRAWING. MORE SPECIFICALLY, MASONEILAN CONTENDS
THAT THE DRAWING IS ADEQUATE ONLY FOR MAKING EMERGENCY REPAIRS AND NOT
FOR MANUFACTURING OF COMPLETE VALVES.
THE NAVY STATES THAT MASONEILAN'S PROTEST, WHICH CHALLENGES THE
ADEQUACY OF THE SPECIFICATIONS, IS UNTIMELY AND SHOULD BE DISMISSED
BECAUSE IT WAS NOT FILED UNTIL AFTER THE DATE SET FOR RECEIPT OF
PROPOSALS.
IN THIS REGARD, 4 C.F.R. SEC. 20.2(B)(1) (1977) PROVIDES IN PART
THAT:
"PROTESTS BASED UPON ALLEGED IMPROPRIETIES IN ANY TYPE OF
SOLICITATION WHICH ARE APPARENT PRIOR TO BID OPENING OR THE CLOSING DATE
FOR RECEIPT OF INITIAL PROPOSALS SHALL BE FILED PRIOR TO BID OPENING OR
THE CLOSING DATE FOR RECEIPT OF INITIAL PROPOSALS."
FOR THE REASONS STATED BY THE NAVY, WE AGREE THAT MASONEILAN'S
PROTEST IS UNTIMELY AND NOT FOR CONSIDERATION ON THE MERITS.
B-189176, NOV 3, 1977
HEADNOTES-UNAVAILABLE
1. CLAIM FOR MONETARY LOSSES ALLEGEDLY SUSTAINED BECAUSE OF ASSERTED
IMPROPER AGENCY APPROVAL OF COMPETITORS' FIRST ARTICLE TEST REPORTS IS
DENIED SINCE FIRST ARTICLE TESTING REQUIREMENTS INVOLVES ADMINISTRATION
OF CONTRACT AND IS A MATTER BETWEEN CONTRACTORS AND AGENCY AND CONFERS
NO ENFORCEABLE RIGHTS ON CONTRACTORS' COMPETITORS.
2. WAIVER OF FIRST ARTICLE TESTING IS NOT IMPROPER WHERE BIDDER
PREVIOUSLY FURNISHED AND GOVERNMENT ACCEPTED IDENTICAL OR SIMILAR ITEM,
NOTWITHSTANDING ASSERTION THAT ORIGINAL APPROVALS OF FIRST ARTICLE TEST
REPORTS WERE IMPROPER.
MARS SINGAL LIGHT COMPANY (MARS) HAS FILED TWO CLAIMS AGGREGATING
$732,275.88 FOR LOSSES IT ALLEGEDLY INCURRED AS A RESULT OF ASSERTEDLY
INVALID FIRST ARTICLE APPROVALS GRANTED BY THE DEFENSE LOGISTICS AGENCY
(DLA), DEFENSE GENERAL SUPPLY CENTER (DGSC), RICHMOND, VIRGINIA, TO TWO
OF MARS' COMPETITORS. THE BASIS FOR THE CLAIMS IS THAT, HAD THE FIRST
ARTICLE APPROVALS NOT BEEN GRANTED, MARS WOULD HAVE (1) RECEIVED VARIOUS
CONTRACTS FOR THE ITEMS COVERED BY THE APPROVALS, (2) MADE A PROFIT ON
EACH ITEM, (3) REALIZED SAVINGS THROUGH BULK BUYING, AND (4) INCREASED
ITS COMMERICAL BUSINESS, WHICH ALSO WOULD HAVE BEEN PROFITABLE.
THE FIRST CLAIM INVOLVES DGSC APPROVAL OF FIRST ARTICLE TEST REPORTS
SUBMITTED BY JULIAN A. MCDERMOTT CORPORATION (MCDERMOTT) AND FEDERAL
SIGN AND SIGNAL CORPORATION (FEDERAL) IN 1972 AND 1973, RESPECTIVELY, IN
ACCORDANCE WITH CONTRACTS AWARDED TO THESE FIRMS FOR CERTAIN 14-VOLT AND
28-VOLT DIRECT CURRENT ROTATING WARNING LIGHTS FOR USE ON EMERGENCY,
SECURITY, UTILITY OR MAINTENANCE VEHICLES AND SUBSEQUENT FIRST ARTICLE
TEST WAIVERS GRANTED TO MCDERMOTT AND FEDERAL WHENEVER REQUESTED IN
CONNECTION WITH OTHER CONTRACTS, FOR THE LIGHTS COVERED BY THE
APPROVALS, AWARDED DURING THE PERIOD 1976-1976.
THE SECOND CLAIM INVOLVES CONTRACTS AWARDED TO FEDERAL BY DGSC FROM
DECEMBER 30, 1969, TO JUNE 4, 1975, FOR AN ELECTRIC MOTOR OPERATED
VEHICULAR SIREN, FIRST ARTICLE TEST REPORT APPROVAL FOR WHICH WAS
GRANTED BY DGSC ON APRIL 21, 1970. MARS ASSERTS THAT MCDERMOTT'S AND
FEDERAL'S FIRST ARTICLE TEST REPORTS SHOULD NOT HAVE BEEN APPROVED
BECAUSE THE REPORTS DID NOT SHOW COMPLIANCE WITH VARIOUS SPECIFICATION
REQUIREMENTS, AND THAT SINCE THE ORIGINAL APPROVALS WERE IMPROPERLY
GIVEN, THE SUBSEQUENT WAIVERS WERE ALSO IMPROPER.
WE ARE AWARD OF NO BASIS ON WHICH THESE CLAIMS MAY BE ALLOWED. THE
CONTRACTUAL REQUIREMENT TO SUBMIT AN ACCEPTABLE FIRST ARTICLE TEST
REPORT INVOLVES ADMINISTRATION OF THE CONTRACT WHICH IS A MATTER SOLELY
BETWEEN THE GOVERNMENT AND THE CONTRACTOR, AND WHICH CONFERS NO RIGHTS
ON COMPETITORS OF THE CONTRACTOR. SEE, E.G., COLORGUARD CORPORATION,
B-189893, OCTOBER 4, 1977, 77-2 CPD ___; DEMPSTER DUMPSTER SYSTEMS,
B-186678, JUNE 30, 1976, 76-1 CPD 429; EDWARD E. DAVIS CONTRACTING,
INCORPORATED, B-179719 - B-179720, JANUARY 29, 1974, 74-1 CPD 37. THUS,
EVEN IF IT WAS IMPROPER FOR THE CONTRACTING OFFICER TO ACCEPT THE FIRST
ARTICLE TEST REPORTS, THOSE APPROVALS DO NOT GIVE RISE TO ANY LEGALLY
ENFORCEABLE RIGHTS IN MARS.
SECONDLY, ASSUMING THE LAW DID RECOGNIZE SUCH RIGHTS IN MARS, THE
CLAIM COULD NOT BE HONORED BECAUSE IT IS TOO SPECULATIVE, SINCE THERE
HAS BEEN NO SHOWING THAT MARS IN FACT WOULD HAVE BEEN AWARDED THE
CONTRACTS TO WHICH IT ALLUDES.
THIRDLY, EVEN IF MARS IS CORRECT WITH RESPECT TO THE INITIAL
APPROVALS OF THE FIRST ARTICLE TEST REPORTS, IT DOES NOT FOLLOW THAT THE
SUBSEQUENT WAIVERS OF FIRST ARTICLE TESTS WERE IMPROPER. THE ARMED
SERVICES PROCUREMENT REGULATION (1976 ED.) PROVIDES IN SECTION 1-193(A)
THAT:
"THE SOLICITATION FOR A FIXED-PRICE TYPE CONTRACT WHICH IS TO CONTAIN
A REQUIREMENT FOR FIRST ARTICLE APPROVAL SHALL INFORM BIDDERS OR
OFFERORS THAT WHERE SUPPLIES IDENTICAL OR SIMILAR TO THOSE CALLED FOR
HAVE BEEN PREVIOUSLY FURNISHED BY THE BIDDER OR OFFEROR AND HAVE BEEN
ACCEPTED BY THE GOVERNMENT, THE REQUIREMENT FOR FIRST ARTICLE APPROVAL
MAY BE WAIVED BY THE GOVERNMENT. ***"
DLA REPORTS THAT SOLICITATIONS ISSUED BY DGSC FOR FIXED-PRICE TYPE
CONTRACTS WHICH REQUIRE FIRST ARTICLE APPROVAL CONTAIN A PROVISION
ALMOST IDENTICAL TO THAT QUOTED ABOVE. THE PROVISION PREDICATES WAIVER
OF FIRST ARTICLE APPROVAL NOT ON PRIOR FIRST ARTICLE TESTS BUT ON THE
PRIOR ACCEPTANCE BY THE GOVERNMENT OF IDENTICAL OR SIMILAR SUPPLIES.
DLA FURTHER REPORTS THAT FIRST ARTICLE TESTING WAS WAIVED FOR MCDERMOTT
AND FEDERAL BECAUSE THEY HAD FURNISHED AND THE GOVERNMENT HAD ACCEPTED
IDENTICAL ITEMS UNDER THE CONTRACTS AWARDED IN 1972 AND 1973. THUS, THE
WAIVERS APPEAR TO BE CONSISTENT WITH THE REGULATIONS AND SOLICITATION
PROVISIONS. SEE BOSTON PNEUMATICS, INC., 56 COMP. GEN. 689 (1977), 77-1
CPD 146.
UNDER CERTAIN LIMITED CIRCUMSTANCES, THE LAW WILL RECOGNIZE THE
VALIDITY OF A CLAIM FILED AGAINST THE GOVERNMENT BY AN UNSUCCESSFUL
BIDDER OR OFFEROR. WHERE IT IS SHOWN THAT A BID OR PROPOSAL WAS NOT
FAIRLY OR PROPERLY CONSIDERED FOR AWARD BECAUSE OF SUBJECTIVE BAD FAITH
OR ACTIONS CONTRARY TO LAW OR REGULATION ON THE PART OF PROCURING
OFFICIALS, OR THAT THERE WAS NO REASONABLE BASIS FOR THE AGENCY'S
ACTION, BID OR PROPOSAL PREPARATION EXPENSES MAY BE AWARDED. KECO
INDUSTRIES, INC. V. UNITED STATES, 492 F.2D 1200 (CT. CL. 1974); THE
MCCARTY CORPORATION V. UNITED STATES, 499 F. 2D 633 (CT. CL. 1974);
AMRAM NORWAK ASSOCIATES, INC 56 COMP. GEN. 448 (1977), 77-1 CPD 219;
T&H COMPANY, 54 COMP. GEN. 1021 (1975), 75-1 CPD 345. HOWEVER, THERE IS
NO EVIDENCE OF RECORD THAT MARS IS ENTITLED TO BID PREPARATION COSTS.
IN FACT, IT IS NOT EVEN CLEAR FROM THE RECORD THAT MARS SUBMITTED BIDS
FOR ANY OR ALL OF THE CONTRACTS AWARDED TO MCDERMOTT AND FEDERAL.
MOREOVER, WHILE A VALID CLAIM MAY RESULT IN THE AWARD OF THE COSTS OF
PREPARING A BID OR PROPOSAL, LOSS OF ANTICIPATED PROFITS AND OTHER
SPECULATIVE DAMAGES SUCH AS THOSE CLAIMED BY MARS ARE UNIFORMLY HELD NOT
TO BE COMPENSABLE. SEE KECO INDUSTRIES V. UNITED STATES, SUPRA; KECO
INDUSTRIES, INC., V. UNITED STATES, 428 F.2D 1233 (CT. CL. 1970); HEYER
PRODUCTS COMPANY V. UNITED STATES, 140 F.SUPP. 409 (CT. CL. 1956);
MACHINERY ASSOCIATES, INC., B-184476, NOVEMBER 18, 1975, 75-2 CPD 323.
THE CLAIM IS DENIED.
B-189237, NOV 3, 1977
HEADNOTES-UNAVAILABLE
MEMBER WHO SUBMITS CLAIM FOR TRAVEL IN THE VICINITY OF HIS PERMANENT
DUTY STATION OVER 1 YEAR AFTER THE PERFORMANCE OF SUCH TRAVEL MAY BE
REIMBURSED FOR SUCH TRAVEL NOTWITHSTANDING AN AIR FORCE ADMINISTRATIVE
REGULATION UROVIDING THAT SUCH CLAIMS WILL BE SUBMITTED WITHIN 1 MONTH
AFTER TRANSPORTATION IS PROCURED SINCE DELAY WAS DUE TO MISINFORMATION
AS TO ENTITLEMENT, SINCE THE CLAIM WAS APPROVED BY PROPER AUTHORITY, AND
SINCE THE CONTROLLING LAW AND STATUTORY REGULATION DO NOT PROVIDE FOR
DENIAL OF A CLAIM IF NOT SUBMITTED WITHIN A SPECIFIED PERIOD.
JOHN M. CORCORAN, JR.:
THIS ACTION IS IN RESPONSE TO A REQUEST FOR RECONSIDERATION OF CLAIMS
DIVISION SETTLEMENT OF NOVEMBER 24, 1976, DISALLOWING THE CLAIM OF MR.
JOHN M. CORCORAN, JR., FOR REIMBURSEMENT OF VICINITY TRAVEL WHILE HE WAS
STATIONED IN LONDON, ENGLAND, WITH THE UNITED STATES AIR FORCE.
THE RECORD INDICATES THAT MR. CORCORAN WHILE ASSIGNED TO THE 7500TH
AIR BASE SQUADRON, SECURITY POLICE, SOUTH RUISLIP AIR STATION, LONDON,
ENGLAND, PERFORMED VICINITY TRAVEL FROM HIS DUTY STATION TO 23 GILBERT
STREET, LONDON AND RETURN, A ROUND-TRIP DISTANCE OF 30 MILES, ON 51 DAYS
DURING THE PERIOD OCTOBER 2, TO DECEMBER 27, 1969. MR. CORCORAN
SUBMITTED A CLAIM FOR THE MILEAGE AT 10 CENTS PER MILE FOR A TOTAL OF
$153 UNDER DATE OF APRIL 30, 1971. THE CLAIM WAS APPROVED AS
ADVANTAGEOUS TO THE GOVERNMENT UNDER THE SAME DAY BY THE CHIEF, SECURITY
POLICE, 7500TH AIR BASE SQUADRON. HOWEVER, PAYMENT COULD NOT BE MADE
LOCALLY, SINCE MR. CORCORAN HAD DEPARTED THE 7500TH AIR BASE SQUADRON ON
EMERGENCY LEAVE ON APRIL 8, 1971. THE MEMBER WAS RELEASED FROM ACTIVE
DUTY ON MAY 7, 1971.
SERGEANT CORCORAN'S TRAVEL CLAIM WAS FORWARDED THE CLAIMS DIVISION OF
THIS OFFICE AS A DOUBTFUL CLAIM BY THE AIR FORCE ACCOUNTING AND FINANCE
CENTER AND BY SETTLEMENT DATED NOVEMBER 24, 1976, THE CLAIM WAS DENIED
ON THE BASIS THAT PARAGRAPH 40241(A) OF AIR FORCE MANUAL 177-103 STATES
THAT, EXCEPT IN UNUSUAL CIRCUMSTANCES, CLAIMS INVOLVING TRANSPORTATION
AT THE PERMANENT DUTY STATION WILL BE SUBMITTED FOR PAYMENT WITHIN 1
MONTH AFTER THE TRANSPORTATION IS PROCURED.
IN MR. CORCORAN'S SITUATION THE CLAIM WAS FILED WELL OVER A YEAR
AFTER THE TRAVEL. THE MEMBER CONTENDS THAT HE AND OTHER MEMBERS OF THE
SECURITY POLICE WERE NEVER TOLD THAT THEY WERE ELIGIBLE FOR
REIMBURSEMENT FOR THE TRAVEL UNTIL THE TIME HE SUBMITTED HIS CLAIM.
SECTION 408 OF TITLE 37, UNITED STATES CODE (1970), PROVIDES THAT A
MEMBER OF A UNIFORMED SERVICE MAY BE DIRECTED, BY REGULATIONS OF THE
HEAD OF THE DEPARTMENT OR AGENCY IN WHICH HE IS SERVING, TO PROCURE
TRANSPORTATION NECESSARY FOR CONDUCTING OFFICIAL BUSINESS OF THE UNITED
STATES WITHIN THE LIMITS OF HIS STATION AND EXPENSES SO INCURRED BY HIM
FOR THE USE OF A PRIVATELY OWNED VEHICLE AT A FIXED RATE A MILE SHALL BE
DEFRAYED BY THE DEPARTMENT OR AGENCY UNDER WHICH HE IS SERVING, OR HE IS
ENTITLED TO BE REIMBURSED FOR THE EXPENSES.
PART K, CHAPTER 4, VOLUME 1, JOINT TRAVEL REGULATIONS (1 JTR)
IMPLEMENTING THE ABOVE LAW, PRESCRIBES THE BASIS FOR REIMBURSEMENT FOR
TRAVEL WITHIN AND ADJACENT TO PERMANENT AND TEMPORARY DUTY STATIONS.
PARA. M4500-1, OF PART K (INCLUDING CHANGE 196, DATED MAY 1, 1969 IN
EFFECT AT THE TIME OF THE TRAVEL) PROVIDES THAT WHEN DETERMINED TO BE
ADVANTAGEOUS TO THE GOVERNMENT, OFFICIALS DESIGNATED BY THE SERVICE
CONCERNED MAY AUTHORIZE IN ADVANCE, OR SUBSEQUENTLY APPROVE,
REIMBURSEMENT FOR TRANSPORTATION EXPENSES, AS PRESCRIBED IN PART K,
WHICH ARE NECESSARILY INCURRED BY MEMBERS IN CONDUCTING OFFICIAL
BUSINESS IN AND AROUND THEIR DUTY STATIONS.
PARAGRAPH M4502, 1 JTR (CHANGE 196 DATED MAY 1, 1969 IN EFFECT AT THE
TIME OF THE TRAVEL) PROVIDED THAT WHEN AUTHORIZED OR APPROVED UNDER THE
CONDITIONS OF PART K, MEMBERS WHO TRAVELED BY PRIVATELY OWNED CONVEYANCE
WERE ENTITLED TO REIMBURSEMENT AT A RATE OF 10 CENTS PER MILE FOR THE
USE OF A PRIVATELY OWNED CONVEYANCE.
AIR FORCE MANUAL 177-103 (CHANGE 66, SPETEMBER 2, 1969) PROVIDED THAT
EXCEPT IN UNUSUAL CIRCUMSTANCES, CLAIMS INVOLVING TRANSPORTATION AT THE
PERMANENT STATION WOULD BE SUBMITTED FOR PAYMENT WITHIN 1 MONTH AFTER
THE TRANSPORTATION IS PROCURED.
HOWEVER, NEITHER THE STATUTE NOR THE CONTROLLING STATUTORY REGULATION
WHICH PROVIDE REGULATIONS FOR REIMBURSEMENT FOR LOCAL TRANSPORTATION
WITHIN THE LIMITS OF A MEMBER'S DUTY STATION REQUIRE THE CLAIM TO BE
SUBMITTED WITHIN 1 MONTH AFTER THE TRAVEL TO OBTAIN REIMBURSEMENT.
ACCORDINGLY THE PROVISION CONCERNING THE SUBMISSION OF CLAIMS WITHIN 1
MONTH AFTER THE TRANSPORTATION IS VIEWED AS A PROCEDURAL REQUIREMENT
WHICH WILL NOT BE THE BASIS FOR DISALLOWING AN OTHERWISE PROPER CLAIM
FOR REIMBURSEMENT FOR LOCAL TRANSPORTATION.
IN THIS CASE WHEN THE MEMBER DID BECOME AWARE OF HIS ENTITLEMENT HE
SUBMITTED A CLAIM WHICH WAS APPROVED. NOTHING IN THE FACTS PRESENTED
CONTAINS ANY INDICATION THAT THIS WAS NOT A PROPERLY AUTHORIZED PAYMENT
AND BUT FOR THE FACT THAT ITS SUBMISSION WAS DELAYED THE MEMBER WOULD,
NO DOUBT, HAVE RECEIVED PAYMENT OF THIS CLAIM IN DUE COURSE.
ACCORDINGLY, THE MEMBER MAY BE REIMBURSED THE AMOUTN OF HIS CLAIM -
$153.
IN EXAMINING THE FILE OF MR. CORCORAN, IT WAS NOTED THAT AT HIS
RELEASE FROM ACTIVE DUTY HE WAS INDEBTED TO THE GOVERNMENT IN THE SUM OF
$537.48, BUT THAT SUM WAS REDUCED BY WAIVER OF $237.33, LEAVING AN
INDEBTEDNESS OF $264.15 WHICH IS STILL OUTSTANDING. THIS INDEBTEDNESS
SHOULD BE PARTIALLY LIQUIDATED BY THE AMOUNT HEREIN ALLOWED.
B-189582, NOV 3, 1977
HEADNOTES-UNAVAILABLE
RESERVE MEMBERS ORDERED TO ACTIVE DUTY TRAINING FOR A PERIOD SHOWN ON
THEIR ORDERS AS JULY 11-24, 1976, ARE NOT ENTITLED TO PAY AND ALLOWANCES
FOR JULY 11 AND 24 SINCE THEY WERE INSTRUCTED NOT TO REPORT, AND THEY
DID NOT REPORT, TO THEIR ANNUAL TRAINING (AT) STATION UNTIL JULY 12 AND
THEY WERE RELEASED FROM ACTIVE DUTY ON JULY 23, DUE TO THE
ADMINISTRATIVE POLICIES OF THE AT STATION.
MAJOR ROBERT G. MAHONY, USAR, LOUIS T. CONTI, E-5, USAR, AND JEFFERY
C. CONRAD, E-4, USAF:
THIS ACTION RESULTS FROM A REQUEST FOR AN ADVANCE DECISION, DATED
JUNE 1, 1977, SUBMITTED BY THE FINANCE AND ACCOUNTING OFFICER,
HEADQUARTERS, UNITED STATES ARMY ENGINEER CENTER AND FORT BELVOIR,
VIRGINIA. THE REQUEST CONCERNS WHETHER PAYMENT OF ACTIVE DUTY PAY AND
ALLOWANCES MAY BE MADE TO MAJOR ROBERT G. MAHONY, USAR, 000-00-9765,
LOUIS T. CONTI, E-5, USAR, 000-00-0610, AND JEFFERY C. CONRAD, E-4,
USAR, 000-00-8068, FOR JULY 11 AND 24, 1976. THE REQUEST WAS ASSIGNED
CONTROL NO. DO-A-1270 BY THE DEPARTMENT OF DEFENSE MILITARY PAY AND
ALLOWANCE COMMITTEE AND FORWARDED HERE BY OFFICE OF THE COMPTROLLER OF
THE ARMY LETTER (DACA-FAF-M) DATED JULY 12, 1977.
THE RECORD SHOWS THAT BY LETTER ORDERS S-4-108, DATED APRIL 22, 1976,
MAJOR MAHONY, E-5 CONTI AND E-4 CONRAD, MEMBERS OF THE 160TH JUDGE
ADVOCATE GENERAL'S (JAG) DETACHMENT LEGAL ASSISTANCE, ARMY RESERVE, FORT
MEADE, MARYLAND, WERE ORDERED TO ANNUAL TRAINING AT FORT BELVOIR,
VIRGINIA. THE ORDERS STATED THE ANNUAL TRAINING PERIOD TO BE JULY 11 TO
24, 1976. HOWEVER, SINCE THE JAG OFFICE AT FORT BELVOIR IS CLOSED ON
SATURDAYS AND SUNDAYS THE RESERVE MEMBERS WERE INSTRUCTED TO REPORT FOR
DUTY AT 7:45 A.M., MONDAY, JULY 12, 1976. AFTER COMPLETION OF THEIR
ANNUAL TRAINING ON FRIDAY, JULY 23, 1976, THEY RETURNED HOME THAT SAME
DAY SINCE THEY RESIDED WITHIN COMMUTING DISTANCE OF FORT BELVOIR. THEY
WERE PAID ONLY FOR 12 DAYS OF ACTIVE DUTY (JULY 12 TO 23, 1976).
MAJOR MAHONY RAISED THE QUESTION OF WHY THE MEMBERS WERE NOT BEING
PAID FOR JULY 11 AND JULY 24, THE 14 DAYS OF ACTIVE DUTY TIME SPECIFIED
BY THEIR ORDERS. MAJOR MAHONY WAS INFORMED THAT THE MEMBERS WERE
ENTITLED TO ONLY 12 DAYS OF ACTIVE DUTY PAY SINCE THEY DID NOT REPORT
UNTIL JULY 12, 1976, AND DEPARTED ON JULY 23, 1976. SUBSEQUENTLY, MAJOR
MAHONEY MADE A CLAIM FOR PAY AND ALLOWANCES FOR HIMSELF AND ON BEHALF OF
THE OTHER TWO MEMBERS FOR THE 2 DAYS IN QUESTION.
THE QUESTION PRESENTED IS, IN EFFECT, WHETHER THESE RESERVISTS,
ORDERED TO ACTIVE DUTY TRAINING FOR A SPECIFIC NUMBER OF DAYS, ARE
ENTITLED TO PAY AND ALLWOANCES FOR THOSE 2 DAYS IN WHICH THEY WERE NOT
IN ATTENDANCE AT THEIR ANNUAL TRAINING (AT) STATION DUE TO THE
ADMINISTRATIVE POLICIES AT THE AT STATION. IN THE PAST WE HAVE
CONSIDERED TO WHAT EXTENT A RESERVE MEMBER IS ENTITLED TO PAY FOR TRAVEL
TIME WHERE ACTUAL TRAVEL IS COMPLETED WITHIN LESS TIME CONTEMPLATED
WITHIN HIS ORDERS. SEE 4 COMP. GEN. 894 (1925); 20 COMP. GEN. 309
(1940); AND 35 COMP. GEN. 387 (1956). HOWEVER, SINCE THOSE CASES
SPECIFICALLY DEALT WITH TRAVEL TIME TO AND FROM AN ACTIVE DUTY STATION,
WHICH IS NOT AT ISSUE HERE, THEY ARE NOT APPLICABLE TO THE QUESTION AT
HAND.
MAJRO MAHONY IN HIS AUGUST 12, 1976 LETTER CLAIMING 2 DAYS' PAY AND
ALLOWANCES STATES:
"*** IT WOULD DEFY ANY RATIONAL INTERPRETATION OF THE ORDERS TO
REQUIRE RESERVISTS TO REPORT TO A DUTY STATION OR AN ADMINISTRATIVE
OFFICE WHEN THEY WERE TOLD IN ADVANCE THAT THE PLACES ARE CLOSED DUE TO
THE ADMINISTRATIVE POLICIES OF THE POST. BY THE SAME TOKEN, THESE
ADMINISTRATIVE POLICIES IN NO WAY OPERATE TO CHANGE THE FACT THAT THE
UNIT WAS ON ACTIVE DUTY ON THE DATES IN QUESTION AND WAS CLEARLY SUBJECT
TO ALL LAWFUL MILITARY ORDERS. *** IN ANY EVENT, THE MERE FAILURE TO GO
TO FT. BELVOIR CANNOT OPERATE TO DIVEST MILITARY OBLIGATION AND/OR
BENEFITS AS THE RIGHT TO MILITARY PAY IS STATUTORY AND DOES NOT DEPEND
ON VARIOUS POST POLICIES."
MAJOR MAHONY ALSO ASSERTS THAT MEMBERS OF THE READY RESERVES ARE
ENTITLED TO 14 DAYS OF ACTIVE DUTY PAY UNDER ARMY REGULATIONS (AR)
140-1, FIGURE 4-1.
UNDER 37 U.S.C. 204(A) AND 1004 (1970) A MEMBER ON ACTIVE DUTY WHO IS
ENTITLED TO PAY AND ALLOWANCES FOR A CONTINUOUS PERIOD OF LESS THAN 1
MONTH IS ENTITLED TO HIS PAY AND ALLOWANCES FOR EACH DAY OF THAT PERIOD
AT THE RATE OF 1/30 OF THE MONTHLY AMOUNT OF HIS PAY AND ALLOWANCES.
WHILE AR 140-1, REFERRED TO BY MAJOR MAHONY, PROVIDES ARMY POLICY
CONCERNING THE NUMBER OF DAYS OF ACTIVE DUTY FOR TRAINING REQUIRED
ANNUALLY FOR VARIOUS TYPES OF RESERVES, IT IS NOT THE STATUTORY PAY
REGULATION UNDER WHICH A MEMBER'S PAY ENTITLEMENT IS DETERMINED.
INSTEAD, THE DEPARTMENT OF DEFENSE MILITARY PAY AND ALLOWANCES
ENTITLEMENTS MANUAL (DODPM) PROVIDES THE APPLICABLE STATUTORY
REGULATIONS FOR RESERVE MEMBERS' ENTITLEMENT TO PAY AND ALLOWANCES.
TABLE 1-2-1, RULE 8, DODPM, PROVIDES THAT WHERE A RESERVE MEMBER IS
CALLED TO ACTIVE DUTY, PAY AND ALLOWANCES BEGIN ON THE DATE THE MEMBER
"COMPLIES WITH ACTIVE DUTY ORDERS." TABLE 1-2-3, RULE 10, PROVIDES THAT
PAY AND ALLOWANCES FOR SUCH A MEMBER ARE AUTHORIZED THROUGH THE DATE OF
ALLOWABLE TRAVEL TIME "AFTER RELEASE" FROM ACTIVE DUTY. SINCE THESE
MEMBERS WERE WITHIN COMMUTING DISTANCE OF THEIR HOMES, UNDER TABLE 1-2-4
THEY ARE ENTITLED TO NO TRAVEL TIME.
IN THIS CASE THE MEMBERS' ORDERS CONTEMPLATED THAT THEY PERFORM THEIR
DUTY AT THE FORT BELVOIR JAG OFFICE. SINCE THAT OFFICE WAS CLOSED ON
THE FIRST AND LAST DAYS OF THE PERIOD COVERED BY THEIR ORDERS THEY WERE
INSTRUCTED TO REPORT ON JULY 12, THE DAY AFTER THE FIRST DAY COVERED IN
THE ORDERS AND THEY WERE RELEASED FROM DUTY ON JULY 23, 1 DAY BEFORE THE
LAST DAY COVERED IN THE ORDERS. THEREFORE, THEY ACTUALLY COMPLIED WITH
THE ORDERS ON JULY 12 AND WERE RELEASED FROM ACTIVE DUTY ON JULY 23.
THEY PERFORMED NO DUTY AND WERE NOT AT THEIR DUTY STATION ON JULY 11 AND
24. THEREFORE, UNDER THE ABOVE-CITED PROVISIONS OF THE DODPM THEY WERE
ENTITLED TO BE PAID ONLY FOR THE PERIOD OF JULY 12 TO 23, 1976, AND THEY
ARE NOT ENTITLED TO BE PAID FOR JULY 11 AND 24, 1976. COMPARE 28 COMP.
GEN. 486 (1949).
ACCORDINGLY, PAYMENT ON THE VOUCHERS SUBMITTED IS NOT AUTHORIZED AND
THEY WILL BE RETAINED HERE.
B-189898, NOV 3, 1977
HEADNOTES-UNAVAILABLE
1. EMPLOYEE OF DEPARTMENT OF THE ARMY WAS TRANSFERRED FROM
MILWAUKEE, WISCONSIN, TO SELFRIDGE AIR FORCE BASE (AFB), MICHIGAN, AND
THEN FROM SELFRIDGE AFB TO HUNTSVILLE, ALABAMA. HE CLAIMS REIMBURSEMENT
OF REAL ESTATE EXPENSES INCIDENT TO SALE OF RESIDENCE IN MILWAUKEE.
EMPLOYEE IS NOT ENTITLED TO REIMBURSEMENT IN CONNECTION WITH TRANSFER TO
HUNTSVILLE BECAUSE RESIDENCE WHICH WAS SOLD WAS NOT AT OLD STATION AND
HE DID NOT REGULARLY COMMUTE BETWEEN SELFRIDGE AFB AND SUCH RESIDENCE.
ALSO, HE IS NOT ENTITLED TO REIMBURSEMENT IN CONNECTION WITH TRANSFER
FROM MILWAUKEE tO SELFRIDGE SINCE TIME LIMIT FOR SALE HAS EXPIRED.
2. EMPLOYEE DID NOT MOVE FROM WISCONSIN TO MICHINGAN AT THE TIME OF
TRANSFER TO SELFRIDGE AFB DUE TO POSSIBLE CLOSING OF BASE. ALTHOUGH
EMPLOYEE SAVED GOVERNMENT EXPENSES OF TWO MOVES, HE IS NOT THEREBY
ENTITLED TO REIMBURSEMENT. ONLY EXCEPTION TO COMMUTING REQUIREMENT OF
REGULATIONS IS WHERE STATION IS IN REMOTE AREA AND ADEQUATE FAMILY
HOUSING IS NOT AVAILABLE WITHIN A REASONABLE DAILY COMMUTING TIME, AND
THERE IS NO INDICATION THAT SUCH HOUSING DID NOT EXIST AT SELFRIDGE AFB.
FRED KACZMAROWSKI - RELOCATION EXPENSES - HOUSE SALE:
THIS IS IN RESPONSE TO AN INQUIRY DATED AUGUST 4, 1977, FROM SENATOR
WILLIAM PROXMIRE. THAT INQUIRY CONSTITUTES A REQUEST FOR
RECONSIDERATION OF OUR CLAIMS DIVISION'S SETTLEMENT OF MARCH 5, 1976,
CERTIFICATE NO. Z-2576814, BY WHICH MR. FRED KACZMAROWSKI'S CLAIM FOR
REIMBURSEMENT OF CERTAIN REAL ESTATE EXPENSES WAS DENIED.
THE RECORD SHOWS THAT MR. KACZMAROWSKI, AN EMPLOYEE OF THE DEPARTMENT
OF THE ARMY, WAS TRANSFERRED FROM MILWAUKEE, WISCONSIN, TO SELFRIDGE AIR
FORCE BASE, SELFRIDGE, MICHIGAN, EFFECTIVE NOVEMBER 1, 1971. THE ORDERS
ISSUED IN CONNECTION WITH THAT TRANSFER AUTHORIZED REIMBURSEMENT OF REAL
ESTATE EXPENSES, BUT MR. KACZMAROWSKI DID NOT SELL HIS HOME IN MILWAUKEE
OR BUY A NEW ONE NEAR SELFRIDGE. HE DECIDED NOT TO MOVE BECAUSE WHEN HE
REPORTED FOR DUTY AT SELFRIDGE HE WAS INFORMED THAT THE BASE MIGHT BE
CLOSED. HE THEREFORE RENTED A ROOM NEAR SELFRIDGE AND RETURNED TO
MILQAUKEE ON WEEKENDS. MR. KACZMAROWSKI REPORTS THAT WITHIN A YEAR
AFTER HIS TRANSFER HE WAS OFFICIALLY INFORMED THAT SELFRIDGE WAS TO BE
CLOSED AND AGAIN DECIDED THAT IT WOULD BE UNWISE TO MOVE. HE RECEIVED A
REDUCTION-IN-FORCE NOTICE SOMETIME IN EARLY 1974, AND WAS SUBSEQUENTLY
HIRED BY THE USA MISSILE COMMAND AT THE REDSTONE ARSENAL IN HUNTSVILLE,
ALABAMA, EFFECTIVE JULY 22, 1974. REIMBURSEMENT OF REAL ESTATE EXPENSES
WAS ALSO AUTHORIZED IN CONNECTION WITH THIS TRANSFER. MR. KACZMAROWSKI
SOLD HIS HOUSE IN WISCONSIN, BOUGHT ANOTHER IN ALABAMA, AND APPLIED FOR
REIMBURSEMENT OF EXPENSES HE INCURRED AS THE RESULT OF THOSE
TRANSACTIONS. THE CHIEF OF THE LEGAL OFFICE AT THE REDSTONE ARSENAL
APPROVED REIMBURSEMENT OF THE EXPENSES RELATING TO THE PURCHASE OF THE
NEW HOUSE BUT DENIED APPROVAL FOR REIMBURSEMENT OF THOSE EXPENSES
RELATING TO THE SALE OF THE HOME IN MILWAUKEE. HE DETERMINED THAT MR.
KACZMAROWSKI WAS NOT ELIGIBLE FOR SUCH REIMBURSEMENT BECAUSE THE
MILWAUKEE RESIDENCE WAS NOT THE ONE FROM WHICH HE REGULARLY COMMUTED TO
AND FROM WORK. OUR CLAIMS DIVISION UPHELD THAT DETERMINATION.
PARAGRAPH C8350 (CHANGE 91, MAY 1, 1973), VOL. II OF THE JOINT TRAVEL
REGULATIONS (JTR), PROVIDES IN PERTINENT PART:
"1. GENERAL. AN EMPLOYEE WILL BE ENTITLED TO REIMBURSEMENT FOR
EXPENSES REQUIRED TO BE PAID BY HIM IN CONNECTION WITH THE SALE OF HIS
RESIDENCE AT HIS OLD DUTY STATION; THE PURCHASE (INCLUDING
CONSTRUCTION) OF A RESIDENCE AT HIS NEW DUTY STATION; OR IN CONNECTION
WITH THE SETTLEMENT OF AN UNEXPIRED LEASE INVOLVING HIS RESIDENCE OR A
LOT ON WHICH A MOBILE HOME USED AS HIS RESIDENCE WAS LOCATED AT HIS OLD
DUTY STATION, AFTER HE HAD SIGNED THE REQUIRED TRANSPORTATION AGREEMENT
AND PROVIDED THAT:
"6. THE RESIDENCE OR DWELLING IS THE RESIDENCE (WHICH MAY BE A
MOBILE HOME AND THE LOT ON WHICH SUCH MOBILE HOME IS LOCATED OR WILL BE
LOCATED) FROM WHICH THE EMPLOYEE REGULARLY COMMUTES TO AND FROM WORK,
EXCEPT THAT WHEN THE DUTY STATION IS IN A REMOTE AREA WHERE ADEQUATE
FAMILY HOUSING IS NOT AVAILABLE WITHIN REASONABLE COMMUTING DISTANCE,
THEN A RESIDENCE WILL BE CONSIDERED TO INCLUDE THE DWELLING WHERE THE
DEPENDENTS OF THE EMPLOYEE RESIDE OR WILL RESIDE, BUT ONLY IF SUCH
RESIDENCE REASONABLY RELATES TO THE PERMANENT DUTY STATION AS DETERMINED
BY THE TRAVEL-APPROVING OFFICIAL CONCERNED."
THIS REGULATION IS BASED ON PARAGRAPH 2-6.1 OF THE FEDERAL TRAVEL
REGULATIONS (FTR) (MAY 1973), WHICH ARE ISSUED BY THE GENERAL SERVICES
ADMINISTRATION (GSA), AND GOVERN THE ENTITLEMENTS OF ALL CIVILIAN
EMPLOYEES OF THE FEDERAL GOVERNMENT. PARAGRAPH 2-6.1 PROVIDES IN
PERTINENT PART AS FOLLOWS:
"2-6.1. CONDITIONS AND REQUIREMENTS UNDER WHICH ALLOWANCES ARE
PAYABLE. TO THE EXTENT ALLOWABLE UNDER THIS PROVISION, THE GOVERNMENT
SHALL REIMBURSE AN EMPLOYEE FOR EXPENSES REQUIRED TO BE PAID BY HIM IN
CONNECTION WITH THE SALE OF ONE RESIDENCE AT HIS OLD OFFICIAL STATION,
FOR PURCHASE (INCLUDING CONSTRUCTION) OF ONE DWELLING AT HIS NEW
OFFICIAL STATION, OR FOR THE SETTLEMENT OF AN UNEXPIRED LEASE INVOLVING
HIS RESIDENCE OR A LOT ON WHICH A MOBILE HOME USED AS HIS RESIDENCE WAS
LOCATED AT THE OLD OFFICIAL STATION; PROVIDED, THAT:
"B. LOCATION AND TYPE OF RESIDENCE. THE RESIDENCE OR DWELLING IS
THE RESIDENCE AS DESCRIBED IN 2-1.4I, WHICH MAY BE A MOBILE HOME AND/OR
THE LOT ON WHICH SUCH MOBILE HOME IS LOCATED OR WILL BE LOCATED."
PARAGRAPH 2-1.4 PROVIDES:
"OFFICIAL STATION OR POST OF DUTY.
THE BUILDING OR OTHER PLACE WHERE THE OFFICER OR EMPLOYEE REGULARLY
REPORTS FOR DUTY. (FOR ELIGIBILITY FOR CHANGE OF STATION ALLOWANCES,
SEE 2-1.3 AND 2-1.5B.) WITH RESPECT TO ENTITLEMENT UNDER THESE
REGULATIONS RELATING TO THE RESIDENCE AND THE HOUSEHOLD GOODS AND
PERSONAL EFFECTS OF AN EMPLOYEE, OFFICIAL STATION OR POST OF DUTY ALSO
MEANS THE RESIDENCE OR OTHER QUARTERS FROM WHICH THE EMPLOYEE REGULARLY
COMMUTES TO AND FROM WORK. HOWEVER, WHERE THE OFFICIAL STATION OR POST
OF DUTY IS IN A REMOTE AREA WHERE ADEQUATE FAMILY HOUSING IS NOT
AVAILABLE WITHIN REASONABLE DAILY COMMUTING DISTANCE, RESIDENCE INCLUDES
THE DWELLING WHERE THE FAMILY OF THE EMPLOYEE RESIDES OR WILL RESIDE,
BUT ONLY IF SUCH RESIDENCE REASONABLY RELATES TO THE OFFICIAL STATION AS
DETERMINED BY AN APPROPRIATE ADMINISTRATIVE OFFICIAL."
ISSUED PURSUANT TO 5 U.S.C. 5724A (1970) WHICH CONTAINS THE AUTHORITY
FOR REIMBURSEMENT OF REAL ESTATE EXPENSES, THESE REGULATIONS HAVE THE
FORCE AND EFFECT OF LAW AND MAY NOT BE WAIVED BY ANY DEPARTMENT OF THE
GOVERNMENT IN AN INDIVIDUAL CASE.
OUR OFFICE HAS CONSISTENTLY HELD THAT WHERE AN EMPLOYEE RETURNS TO A
RESIDENCE ONLY ON WEEKENDS, SUCH RESIDENCE DOES NOT CONSTITUTE "QUARTERS
FROM WHICH THE EMPLOYEE REGULARLY COMMUTED TO AND FROM WORK," PURSUANT
TO FTR SECTION 2-1.4I. SEE MATTER OF TONLY D. LIMBAUGH, B-188644,
APRIL 28, 1977; MATTER OF NATHANIEL A. WILSON, B-161606, JUNE 3, 1976.
SINCE MR. KACZMAROWSKI COMMUTED TO HIS HOME IN MILWAUKEE ONLY ON
WEEKENDS, THAT RESIDENCE DOES NOT MEET THE CONDITIONS OF THE REGULATIONS
AUTHORIZING REIMBURSEMENT, AND HE IS NOT ENTITLED TO RECEIVE THE
EXPENSES HE INCURRED IN SELLING HIS HOME IN MILWAUKEE.
MR. KACZMAROWSKI STATES THAT HE DECIDED NOT TO MOVE FROM MILWAUKEE TO
SELFRIDGE IN ORDER TO AVOID THE DIFFICULTIES ASSOCIATED WITH TWO MOVES.
BY NOT MOVING, HE ARGUES, HE SAVED THE GOVERNMENT THE EXPENSE OF AN
EXTRA MOVE AND SHOULD NOT BE PENALIZED AS A RESULT.
HE ALSO ARGUES THAT HE SHOULD NOT BE DENIED REIMBURSEMENT BECAUSE HE
WAS NOT INFORMED OF THE REQUIREMENTS OF THE APPLICABLE REGULATIONS.
ALTHOUGH MR. KACZMAROWSKI DID SAVE THE GOVERNMENT SOME EXPENSE, THIS
FACT DOES NOT AFFECT HIS ENTITLEMENT. THE ONLY EXCEPTION TO THE
COMMUTING REQUIREMENT OF THE REGULATIONS IS WHERE THE OFFICIAL DUTY
STATION IS IN A REMOTE AREA WHERE ADEQUATE FAMILY HOUSING IS NOT
AVAILABLE WITHIN A REASONABLE DAILY COMMUTING TIME. SEE 47 COMP. GEN.
109 (1967). THIS EXCEPTION HAS BEEN INCORPORATED INTO THE REGULATIONS
IN PARAGRAPH 2-1.41 OF THE GTR AND PARAGPAPH C8350-1.6 OF THE JTR,
SUPRA. THERE IS NO INDICATION THAT HOUSING WAS NOT AVAILABLE NEAR THE
SELFRIDGE BASE BECAUSE IT WAS IN A REMOTE AREA.
WE RECOGNIZE THAT MR. KACZMAROWSKI WAS AUTHORIZED TO SELL HIS HOME IN
MILWAUKEE IN CONNECTION WITH HIS TRANSFER TO SELFRIDGE.
HOWEVER, FTR PARA. 2-6.1E PROVIDES THAT THE SETTLEMENT DATE FOR THE
SALE OF THE HOME AT THE OLD STATION MUST BE NOT LATER THAN 1 INITIAL
YEAR AFTER THE EFFECTIVE DATE OF THE TRANSFER. ALSO, AN ADDITIONAL
EXTENSION OF THE TIME LIMIT MAY BE GRANTED UPON THE WRITTEN APPLICATION
OF THE EMPLOYEE. IN THE PRESENT CASE THE RECORD SHOWS THAT THE
EFFECTIVE DATE OF MR. KACZMAROWSKI'S TRANSFER WAS NOVEMBER 1, 1971.
THE SETTLEMENT DATE FOR THE SALE OF HIS MILWAUKEE HOME WAS AUGUST 16,
1974. SINCE MR. KACZMAROWSKI DID NOT CONSUMMATE SETTLEMENT WITHIN 2
YEARS OF HIS TRANSFER TO SELFRIDGE, THE MAXIMUM TIME LIMIT FOR SELLING A
HOME, HE MAY NOT BE REIMBURSED THE SALE EXPENSES IN CONNECTION WITH HIS
TRANSFER FROM MILWAUKEE.
WITH RESPECT TO MR. KACZMAROWSKI'S CONTENTION THAT HE WAS NOT
INFORMED CONCERNING THE REQUIREMENTS OF THE REGULATIONS AND SHOULD
THEREFORE BE REIMBURSED, IT IS WELL ESTABLISHED THAT IN ABSENCE OF
SPECIFIC STATUTORY AUTHORITY, THE UNITED STATES IS NOT LIABLE FOR
NEGLIGENT OR ERRONEOUS ACTS OF ITS OFFICERS, AGENTS, OR EMPLOYEES, EVEN
THOUGH COMMITTED IN THE PERFORMANCE OF THEIR OFFICIAL DUTIES. ROBERTSON
V. SICHEL, 127 U.S. 507, 513 (1888); GERMAN BANK V. UNITED STATES, 148
U.S. 573, 579 (1893); 19 COMP. GEN. 503 (1939); 22 ID. 221 (1942); 44
ID. 337 (1954); AND 46 ID. 348 (1966).
IN LIGHT OF THE FOREGOING WE MUST AFFIRM OUR CLAIMS DIVISION'S
DETERMINATION THAT MR. KACZMAROWSKI IS NOT ENTITLED TO REIMBURSEMENT.
B-188189, NOV 2, 1977
HEADNOTES-UNAVAILABLE
THE GRANTING OF ADMINISTRATIVE LEAVE TO AN EMPLOYEE FOR BLOOD
DONATION PURPOSES IS A PROPER EXERCISE OF ADMINISTRATIVE AUTHORITY. THE
CIVIL SERVICE COMMISSION HAS NOT ISSUED GENERAL REGULATIONS COVERING THE
GRANTING OF ADMINISTRATIVE LEAVE AND, THEREFORE, EACH AGENCY, UNDER THE
GENERAL GUIDANCE OF THE DECISIONS OF THE COMPTROLLER GENERAL, HAS
DISCRETION TO ALLOW ADMINISTRATIVE LEAVE FOR BRIEF PERIODS FOR THE
PURPOSES LISTED IN THE FEDERAL PERSONNEL MANUAL. THEREFORE, DEPARTMENT
OF THE ARMY MAY GRANT TWO DAYS ADMINISTRATIVE LEAVE TO EMPLOYEE WHO
DONATED BLOOD TO NEPHEW WHO HAD CANCER.
THIS ACTION CONCERNS A REQUEST BY J. T. IRWIN, LTC, FC. FINANCE AND
ACCOUNTING OFFICER, DEPARTMENT OF THE ARMY, FOR AN ADVANCE DECISION AS
TO WHETHER IT IS WITHIN THE ARMY'S AUTHORITY TO GRANT EXCUSED ABSENCE
WITHOUT CHARGE TO ANNUAL LEAVE OR LOSS OF PAY TO MR. BILL V. MCBRIDE, A
CIVILIAN EMPLOYEE AT FORT SILL, OKLAHOMA, FOR THE PURPOSE OF ALLOWING
HIM TO SERVE AS A BLOOD DONOR FOR HIS NEPHEW ON A SEMI-WEEKLY BASIS OVER
A PERIOD OF SEVERAL MONTHS WHERE HE IN ONLY ONE OF TWO MEDICALLY
ACCEPTABLE BLOOD DONORS.
WE HAVE BEEN INFORMALLY ADVISED THAT MR. MCBRIDE DONATED BLOOD ONLY
ON AUGUST 19 AND 20, 1976, SINCE HIS NEPHEW DIED BEFORE ADDITIONAL
DONATIONS WERE REQUESTED. SINCE THE QUESTION HAS BECOME HYPOTHETICAL,
WE SHALL CONFINE OUR DECISION TO THE QUESTION OF WHETHER ADMINISTRATIVE
LEAVE MAY BE GRANTED ON THE TWO DAYS WHEN BLOOD WAS DONATED.
THE CIVIL SERVICE COMMISSION HAS ISSUED NO GENERAL REGULATIONS ON THE
SUBJECT OF GRANTING EXCUSED ABSENCE TO EMPLOYEES WITHOUT CHARGE TO LEAVE
(COMMONLY CALLED ADMINISTRATIVE LEAVE). HOWEVER, THIS MATTER IS
DISCUSSED IN FPM SUPPLEMENT 990-2, BOOK 630, SUBCHAPTER S11. THAT
SUBCHAPTER INDICATES THE VARIOUS PURPOSES FOR WHICH THE GRANTING OF
ADMINISTRATIVE LEAVE HAS BEEN RECOGNIZED EITHER BY LAW, EXECUTIVE ORDER,
EXECUTIVE POLICY, OR DECISIONS OF OUR OFFICE. THESE INCLUDE:
(1) REGISTERING AND VOTING
(2) CIVIL DEFENSE ACTIVITIES
(3) PARTICIPATION IN MILITARY FUNERALS
(4) BLOOD DONATIONS
(5) TARDINESS AND BRIEF ABSENCES
(6) TAKING EXAMINATIONS
(7) ATTENDANCE AT CONFERENCES OR CONVENTIONS
(8) REPRESENTING EMPLOYEE ORGANIZATIONS
(9) OFFICE CLOSINGS
PARAGRAPH OF A SUBCHAPTER S11-5 OF BOOK 630 CONTAINS THE FOLLOWING
GENERAL INSTRUCTION WITH REGARD TO THE TYPE OF ABSENCE IN QUESTION:
"WITH FEW EXCEPTIONS, AGENCIES DETERMINE ADMINISTRATIVELY SITUATIONS
IN WHICH THEY WILL EXCUSE EMPLOYEES FROM DUTY WITHOUT CHARGE TO LEAVE
AND MAY BY ADMINISTRATIVE REGULATION PLACE ANY LIMITATIONS OR
RESTRICTIONS THEY FEEL ARE NEEDED. ***"
THUS, EACH AGENCY IS RESPONSIBLE FOR DETERMINING THOSE SITUATIONS IN
WHICH EXCUSING EMPLOYEES FROM WORK WITHOUT CHARGE TO LEAVE IS
APPROPRIATE UNDER THE GENERAL GUIDANCE OF THE DECISIONS OF THIS OFFICE
AS THEY ARE DISCUSSED IN THE APPLICABLE FPM SUPPLEMENT.
THE PERTINENT ARMY REGULATIONS REGARDING EXCUSED ABSENCES (CPR 990-2
(C 14) 630.S11) PROVIDE FURTHER INSTRUCTIONS WITH RESPECT TO THE
SPECIFIC CIRCUMSTANCES IN WHICH ADMINISTRATIVE LEAVE MAY BE GRANTED AS
FOLLOWS:
"S11-5. ADMINISTRATIVE DISCRETION
_________________________
"ABSENCES FROM REGULARLY ASSIGNED DUTIES IN CONNECTION WITH THE
ACTIVITIES OUTLINED BELOW ARE CONSIDERED CONSTRUCTIVE DUTY TIME; THAT
IS, ACTIVITY COMMANDERS ARE AUTHORIZED TO EXCUSE ANY EMPLOYEE WITHOUT
CHARGE TO LEAVE OR LOSS OF PAY TO THE EXTENT INDICATED IN EACH CASE.
"B. BLOOD DONATION. ALL EMPLOYEES WHO VOLUNTEER AS BLOOD DONORS,
WITHOUT COMPENSATION, TO THE AMERICAN RED CROSS, TO MILITARY HOSPITALS,
OR OTHER BLOOD BANKS, OR RESPOND TO EMERGENCY CALLS FOR NEEDY
INDIVIDUALS WILL BE EXCUSED FROM WORK WITHOUT CHARGE TO LEAVE. IN
ADDITION TO THE TIME REQUIRED TO TRAVEL TO AND FROM THE BLOOD CENTER AND
TO GIVE BLOOD, DONORS WILL BE AUTHORIZED 4 HOURS OF EXCUSED ABSENCE ON
THE DAY THE BLOOD IS DONATED FOR RECUPERATION PURPOSES. ALL DONORS ARE
ENCOURAGED TO TAKE THE FULL 4 HOURS FOR THIS PURPOSE."
AS THE SCOPE OF AUTHORITY FOR MAKING DETERMINATIONS OF GRANTING
EXCUSED ABSENCES WITHOUT CHARGE TO LEAVE IS NOT CLEARLY DEFINED IN LAW
AND REGULATION AND INASMUCH AS THE ABSENCE FOR A BRIEF PERIOD WAS
RELATED TO AN EMERGENCY SITUATION SIMILAR TO THOSE COVERED IN THE ARMY
REGULATION, WE DO NOT BELIEVE THE EXERCISE OF THE COMMANDER'S AUTHORITY
TO EXCUSE MR. MCBRIDE SHOULD BE QUESTIONED IN THIS CASE.
ACCORDINGLY, OUR OFFICE WILL NOT QUESTION THE GRANTING OF
ADMINISTRATIVE LEAVE UNDER THESE CIRCUMSTANCES.
A VOUCHER FOR TWO DAYS' PAY WAS FORWARDED WITH THE SUBMISSION. THAT
BOUCHER MAY NOT BE PAID SINCE THE PROPER DISPOSITION OF THIS CASE IS THE
ADJUSTMENT OF MR. MCBRIDE'S LEAVE ACCOUNT.
B-189029, NOV 2, 1977
HEADNOTES-UNAVAILABLE
1. AN ARMY OFFICER WHO WAS PROMOTED TO THE GRADE OF LIEUTENANT
GENERAL ON SEPTEMBER 1, 1975, AND WAS VOLUNTARILY RETIRED IN THAT GRADE
ON APRIL 1, 1977, MAY NOT, UNDER 10 U.S.C. 1401A(F), HAVE HIS RETIRED
PAY COMPUTED ON THE PREMISE THAT HE BECAME ENTITLED TO RETIRED PAY AS A
LIEUTENANT GENERAL ON SEPTEMBER 1, 1975, THE DATE OF HIS APPOINTMENT TO
THAT GRADE.
2. AN ARMY OFFICER PROMOTED TO THE GRADE OF LIEUTENANT GENERAL ON
SEPTEMBER 1, 1975, AND RETIRED APRIL 1, 1977, MAY, UNDER 10 U.S.C.
1401A(F), HAVE HIS RETIRED PAY COMPUTED AS IF HE HAD RETIRED OCTOBER 1,
1975, BUT IF THE ACTIVE DUTY BASIC PAY INCREASE EFFECTIVE THAT DAY WOULD
ADVERSELY AFFECT HIS RETIRED PAY, IT MAY BE COMPUTED ON THE PREMISE THAT
HE RETIRED DURING SEPTEMBER AS A LIEUTENANT GENERAL.
UNDER 5 U.S.C. 8301, OCTOBER 1, 1975, WOULD BE THE RETIREMENT DATE,
BUT RETIRED PAY WOULD BE COMPUTED ON THE BASIS OF RETIREMENT DURING
SEPTEMBER 1975.
LIEUTENANT GENERAL WILLIAM B. FULTON, USA, RETIRED:
THIS ACTION IS IN RESPONSE TO A REQUEST SUBMITTED BY LIEUTENANT
COLONEL R. J. WITHINGTON, FC, FINANCE AND ACCOUNTING OFFICER, UNITED
STATES ARMY FINANCE CENTER (FILE REFERENCE FINCM-T), FOR AN ADVANCE
DECISION AS TO THE PROPRIETY OF MAKING PAYMENT ON A VOUCHER IN THE
AMOUNT OF $45.50, IN FAVOR OF LIEUTENANT GENERAL WILLIAM B. FULTON, USA,
RETIRED, 000-00-6670, REPRESENTING ONE MONTH'S DIFFERENCE IN RETIRED PAY
FOR THE MONTH OF APRIL 1977, BETWEEN THAT OF A LIEUTENANT GENERAL (0-9)
COMPUTED UNDER THE OCTOBER 1, 1973, BASIC PAY RATES AND THAT OF A MAJOR
GENERAL (0-8) COMPUTED UNDER THE OCTOBER 1, 1972, BASIC PAY RATES. THE
SUBMISSION WAS FORWARDED TO THIS OFFICE BY THE CHIEF, FINANCE SERVICES
DIVISION, DIRECTORATE OF FINANCE AND ACCOUNTING, OFFICE OF THE
COMPTROLLER OF THE ARMY, UNDER CONTROL NO. KO-A-1266 ALLOCATED BY THE
DEPARTMENT OF DEFENSE MILITARY PAY AND ALLOWANCE COMMITTEE.
IN THE SUBMISSION IT IS INDICATED THE MEMBER WAS RETIRED EFFECTIVE
APRIL 1, 1977, IN THE GRADE OF LIEUTENANT GENERAL UNDER THE AUTHORITY OF
10 U.S.C. 3918, WITH 34 YEARS, 10 MONTHS AND 24 DAYS CREDITABLE SERVICE
FOR BASIC PAY PURPOSES. HOWEVER, HIS RETIRED PAY ENTITLEMENT COMPUTED
ON THE BASIS OF HIS ACTUAL RETIREMENT DATE OF APRIL 1, 1977, IS LESS
THAN THE MONTHLY RETIRED PAY TO WHICH HE WOULD BE ENTITLED IF HE HAD
RETIRED AT AN EARLIER DATE, AND HE HAD SUFFICIENT SERVICE TO QUALIFY FOR
AN EARLIER RETIREMENT AT AN INCREASED RETIRED PAY RATE COMPUTED UNDER
THE PROVISIONS OF 10 U.S.C. 1401A(E) AND (F).
IT IS ALSO STATED THAT THE MEMBER WAS PROMOTED FROM MAJOR GENERAL TO
LIEUTENANT GENERAL ON SEPTEMBER 1, 1975, AND THAT IF HE WAS ELIGIBLE FOR
RETIREMENT AND HAD RETIRED AS A LIEUTENANT GENERAL (0-9) ON SEPTEMBER 1,
1975, HIS RETIRED PAY FOR THE MONTH OF APRIL 1977, BASED ON THE OCTOBER
1, 1973, BASIC PAY RATES WITH COST-OF LIVING INCREASES, WOULD AMOUNT OF
$2,976.54. IN THE ALTERNATIVE, IF HE HAD RETIRED AS A MAJOR GENERAL
(0-8) ON SEPTEMBER 1, 1974, HIS RETIRED PAY FOR THE MONTH OF APRIL 1977,
BASED ON THE OCTOBER 1, 1972, BASIC PAY RATES WITH COST-OF-LIVING
INCREASES, WOULD AMOUNT TO $2,931.04. THE DIFFERENCE BETWEEN THE TWO
COMPUTATIONS EQUALS $45.50, THE AMOUNT SET OUT IN THE SUBMITTED VOUCHER.
IT IS UNDERSTOOD THAT THOSE COMPUTATIONS WOULD GIVE THE MEMBER MAXIMUM
RETIRED PAY UNDER RETIRED PAY COMPUTATIONS AUTHORIZED BY 10 U.S.C.
1401A(E) AND (F) AND THAT THE QUESTION PRESENTED IS WHETHER THE MEMBER
COULD HAVE RETIRED AS A LIEUTENANT GENERAL ON SEPTEMBER 1, 1975, THE DAY
HE WAS APPOINTED TO THAT GRADE, AND THUS QUALIFY FOR RETIRED PAY AT THE
HIGHER OF THE TWO RATES SET OUT ABOVE.
FOR THE REASONS HEREINAFTER SET FORTH, WE CONCLUDE THAT WHILE THE
MEMBER WOULD NOT HAVE BEEN ENTITLED TO BE APPOINTED TO THE GRADE OF
LIEUTENANT GENERAL AND BE REITED IN THAT RANK ON THE SAME DAY, HE IS
NEVERTHELESS ENTITLED TO RECEIVE RETIRED PAY AT THE HIGHER RATE.
SECTION 1401A OF TITLE 10, UNITED STATES CODE (SUPP. V, 1975), IN
GENERAL, DIRECTS THAT MILITARY RETIRED PAY BE ADJUSTED TO REFLECT
CHANGES IN THE CONSUMER PRICE INDEX RATHER THAN CHANGES IN ACTIVE DUTY
BASIC PAY RATES. SUBSECTIONS 1401A(E) AND (F), PERTINENT TO THE PRESENT
CASE, PROVIDE AS FOLLOWS:
"(E) NOTWITHSTANDING SUBSECTIONS (C) AND (D), THE ADJUSTED RETIRED
PAY OR RETAINER PAY OF A MEMBER OR FORMER MEMBER OF AN ARMED FORCE
RETIRED ON OR AFTER OCTOBER 1, 1967, MAY NOT BE LESS THAN IT WOULD HAVE
BEEN HAD HE BECOME ENTITLED TO RETIRED PAY OR RETAINER PAY BASED ON THE
SAME PAY GRADE, YEARS OF SERVICE FOR PAY, YEARS OF SERVICE FOR RETIRED
OR RETAINER PAY PURPOSES, AND PERCENT OF DISABILITY, IF ANY, ON THE DAY
BEFORE THE EFFECTIVE DATE OF THE RATES OF MONTHLY BASIC PAY ON WHICH HIS
RETIRED PAY OR RETAINER PAY IS BASED.
"(F) NOTWITHSTANDING ANY OTHER PROVISION OF LAW, THE MONTHLY RETIRED
OR RETAINER PAY OF A MEMBER OR A FORMER MEMBER OF AN ARMED FORCE WHO
INITIALLY BECAME ENTITLED TO THAT PAY ON OR AFTER JANUARY 1, 1971, MAY
NOT BE LESS THAN THE MONTHLY RETIRED OR RETAINER PAY TO WHICH HE WOULD
BE ENTITLED IF HE HAD BECOME ENTITLED TO RETIRED OR RETAINER PAY AT AN
EARLIER DATE, ADJUSTED TO REFLECT ANY APPLICABLE INCREASES IN SUCH PAY
UNDER THIS SECTION. IN COMPUTING THE AMOUNT OF RETIRED OR RETAINER PAY
TO WHICH SUCH A MEMBER WOULD HAVE BEEN ENTITLED ON THAT EARLIER DATE,
THE COMPUTATION SHALL, SUBJECT TO SUBSECTION (E) OF THIS SECTION, BE
BASED ON HIS GRADE, LENGTH OF SERVICE, AND THE RATE OF BASIC PAY
APPLICABLE TO HIM AT THAT TIME. THIS SUBSECTION DOES NOT AUTHORIZE ANY
INCREASE IN THE MONTHLY RETIRED OR RETAINER PAY TO WHICH A MEMBER WAS
ENTITLED FOR ANY PERIOD PRIOR TO THE EFFECTIVE DATE OF THIS SUBSECTION."
SUBSECTION 1401A(E) WAS ADDED AS AN AMENDMENT TO 10 U.S.C. 1401A BY
SECTION 2(A)(1) OF THE ACT OF DECEMBER 16, 1967, PUBLIC LAW 90-207, 81
STAT. 649, 652. UNDER THAT PROVISION, A MEMBER'S RETIRED PAY MAY BE
COMPUTED BY TWO METHODS, (1) BASED ON THE ACTIVE DUTY PAY RATE IN EFFECT
AT THE TIME OF HIS RETIREMENT AND, (2) BASED ON THE IMMEDIATELY PRIOR
ACTIVE DUTY PAY RA , PLUS ANY APPROPRIATE CONSUMER PRICE INDEX INCREASES
WHICH BECAME EFFECTIVE SUBSEQUENT TO THAT ACTIVE DUTY PAY RATE AND
BEFORE THE ACTUAL DATE OF THE MEMBER'S RETIREMENT. THE MEMBER IS
ENTITLED TO RETIRED PAY UNDER THE COMPUTATION WHICH PRODUCES THE GREATER
BENEFIT. SEE 53 COMP. GEN. 698 (1974); ID. 701 (1974).
SUBSECTION 1401A(F) WAS ADDED AS AN AMENDMENT TO 10 U.S.C. 1401A BY
SECTION 806 OF THE DEPARTMENT OF DEFENSE APPROPRIATION AUTHORIZATION
ACT, 1976, PUBLIC LAW 94-106, OCTOBER 7, 1975, 89 STAT. 531, 538. THAT
AMENDMENT WAS ADOPTED IN VIEW OF THE SO-CALLED "RETIRED PAY INVERSION"
CREATED BY THE FACT THAT FOR SEVERAL YEARS UPWARD COST-OF-LIVING
ADJUSTMENTS OR RETIRED AND RETAINER PAY UNDER 10 U.S.C. 1401A HAD
OCCURRED IN GREATER AMOUNTS AND AT GREATER FREQUENCY THAN INCREASES IN
ACTIVE MILITARY BASIC PAY. THE RESULT OF THIS WAS THAT MANY OF THOSE
WHO REMAINED ON ACTIVE DUTY AFTER BECOMING ELIGIBLE FOR RETIREMENT WERE
LOSING CONSIDERABLE RETIREMENT PAY. THE AMENDMENT WAS INTENDED TO
PROVIDE STILL OTHER ALTERNATIVE METHODS OF CALCULATING RETIRED OR
RETAINED PAY, BUT NOT TO CHANGE THE BASIS UPON WHICH A MEMBER BECOMES
ENTITLED TO SUCH PAY. 56 COMP. GEN. 740 (1977).
THE COMPUTATION OF RETIRED PAY UNDER THE ALTERNATIVE METHODS PROVIDED
BY 10 U.S.C. 1401A(E) AND (F) IS NECESSARILY COMPLEX, BUT IN THE CASE OF
THE MEMBER IN QUESTION IT ESSENTIALLY INVOLVES COMPUTING THE MAXIMUM
AMOUNT OF RETIRED PAY TO WHICH HE WOULD BE ENTITLED HAD HE ENTERED
RETIREMENT VOLUNTARILY AND UPON HIS REQUEST AT SOME TIME PRIOR TO APRIL
1, 1977, HIS ACTUAL RETIREMENT DATE.
IT IS SAID THAT THE MEMBER'S MAXIMUM RETIRED PAY ENTITLEMENT RESULTS
FROM A COMPUTATION BASED ON A PREMISE THAT HE COULD HAVE RETIRED ON
SEPTEMBER 1, 1975, IN THE GRADE OF LIEUTENANT GENERAL (0-9), THE DATE HE
WAS PROMOTED TO THAT RANK. WE HAVE PREVIOUSLY EXPRESSED THE VIEW THAT
MILITARY OFFICERS MAY NOT BE INVOLUNTARILY RETIRED AND BE PROMOTED IN
GRADE ON THE ACTIVE LIST FOR RETIRED PAY PURPOSES ON THE SAME DATE,
SINCE SUCH PROMOTION ACTION WOULD BE INCONSISTENT WITH RETIRED STATUS,
AND THERE IS NO BASIS UNDER WHICH AN OFFICER MIGHT BE HELD TO BE ON
ACTIVE DUTY FOR PROMOTION PURPOSES PART OF A DAY AND BE IN A RETIRED
STATUS FOR THE REST OF THAT DAY. SEE 54 COMP. GEN. 1090 (1975); SEE
ALSO 41 COMP. GEN. 703 (1962). IT IS, THEREFORE, OUR VIEW THAT THE
MEMBER WOULD NOT HAVE BEEN ENTITLED TO BE BOTH RETIRED AND PROMOTED ON
THE ACTIVE LIST TO THE GRADE OF LIEUTENANT GENERAL ON THE SAME DAY,
SEPTEMBER 1, 1975, AND IF HE HAD ACTUALLY REITED ON THAT DATE, HIS
RETIRED PAY WOULD HAVE TO HAVE BEEN COMPUTED ON THE BASIS OF THE ACTIVE
DUTY PAY RATE OF A MAJOR GENERAL (0-8) RATHER THAN THAT OF A LIEUTENANT
GENERAL (0-9). SEE 54 COMP. GEN. 1090, SUPRA. THE RETIRED PAY
COMPUTATION BASED ON SUCH CIRCUMSTANCES (MAJOR GENERAL RETIRED ON
SEPTEMBER 1, 1975) PRODUCES A RESULT LESS FAVORABLE TO THE MEMBER THAN
RESULTS FROM THE COMPUTATION OF HIS APRIL 1977 RETIRED PAY PREMISED ON A
RETIREMENT DATE OF SEPTEMBER 1, 1974, FOR A MAJOR GENERAL WITH OVER 30
YEARS OF ACTIVE SERVICE.
AN ALTERNATIVE IS PRESENTED THAT THE MEMBER COULD HAVE RETIRED AS A
LIEUTENANT GENERAL ON OCTOBER 1, 1975. IN THAT CASE, HOWEVER, THE
COMPUTATIONS AUTHORIZED BY 10 U.S.C. 1401A(E) AND (F) WOULD BE LESS
FAVORABLE TO HIM THAN IF A SEPTEMBER 1975 RETIREMENT DATE AND THE GRADE
OF LIEUTENANT GENERAL COULD BE USED, DUE TO THE CURIOUS EFFECTS OF THE
RETIRED PAY "INVERSION" PROBLEM PREVIOUSLY DESCRIBED.
IT IS NOTED, HOWEVER, THAT THE MEMBER'S RETIREMENT ELIGIBILITY IS
UNDER 10 U.S.C. 3918, WHICH PROVIDES:
"A REGULAR COMMISSIONED OFFICER OF THE ARMY WHO HAS AT LEAST 30 YEARS
OF SERVICE COMPUTED UNDER SECTION 3926 OF THIS TITLE MAY BE RETIRED UPON
HIS REQUEST, IN THE DISCRETION OF THE PRESIDENT."
IT IS CONCEIVABLE THAT HAVING BEEN APPOINTED TO THE GRADE OF
LIEUTENANT GENERAL ON SEPTEMBER 1, 1975, THE MEMBER COULD HAVE BEEN
RETIRED AT HIS REQUEST IN THAT GRADE AT SOME LATER TIME DURING THE MONTH
OF SEPTEMBER 1975. ALTHOUGH THIS IS NOT NORMALLY DONE, WE FIND NOTHING
WHICH WOULD PRECLUDE THE COMPUTATION OF RETIRED PAY BASED ON THE
PREMISE.
IN THAT CASE, THE UNIFORM RETIREMENT DATE ACT, NOW CODIFIED AS 5
U.S.C. 8301 (1970), WOULD BE APPLICABLE. THAT ACT PROVIDES:
"(A) EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED BY THIS TITLE OR OTHER
STATUTE, RETIREMENT AUTHORIZED BY STATUTE IS EFFECTIVE ON THE FIRST DAY
OF THE MONTH FOLLOWING THE MONTH IN WHICH RETIREMENT WOULD OTHERWISE BE
EFFECTIVE.
"(B) NOTWITHSTANDING SUBSECTION (A) OF THIS SECTION THE RATE OF
ACTIVE OR RETIRED PAY OR ALLOWANCE IS COMPUTED AS OF THE DATE RETIREMENT
WOULD HAVE OCCURRED BUT FOR SUBSECTION (A) OF THIS SECTION."
THUS, WHILE THE MEMBER COULD NOT HAVE BEEN RETIRED AS A LIEUTENANT
GENERAL ON SEPTEMBER 1, 1975, THE DAY HE WAS PROMOTED TO THAT GRADE ON
THE ACTIVE LIST, HE COULD THEREAFTER HAVE BEEN RETIRED IN THAT GRADE
DURING SEPTEMBER 1975, AND UNDER THE UNIFORM RETIREMENT DATE ACT HIS
RETIRED PAY WOULD BE COMPUTED AS IF HE HAD RETIRED DURING SEPTEMBER 1975
RATHER THAN ON OCTOBER 1, 1975. IF AS INDICATED IN THE SUBMISSION THE
RESULTING COMPUTATION IS MOST FAVORABLE TO THE MEMBER, IT MAY BE USED.
HENCE, UNDER THE PROVISIONS OF 10 U.S.C. 1401A(E) AND (F), HE MAY BE
PAID RETIRED PAY OF A LIEUTENANT GENERAL (0-9) COMPUTED UNDER THE
OCTOBER 1, 1973, BASIC PAY RATES WITH THE APPROPRIATE COST-OF-LIVING
ADJUSTMENTS.
ACCORDINGLY, THE VOUCHER, WHICH IS RETURNED HEREWITH, MAY BE PAID, IF
OTHERWISE CORRECT.
B-189577, NOV 2, 1977
HEADNOTES-UNAVAILABLE
HOUSEHOLD GOODS OF TRANSFERRED EMPLOYEE WERE TRANSPORTED TO STORAGE
FACILITY 48 MILES FROM NEW DUTY STATION. EMPLOYEE'S REIMBURSEMENT FOR
TRANSPORTATION AND TEMPORARY STORAGE UNDER THE COMMUTED RATE SYSTEM WAS
LESS THAN EMPLOYEE'S ACTUAL COST AND HE REQUESTS THAT REIMBURSEMENT BE
COMPUTED ON BASIS OF TWO LINE HAULS. COMPUTATION MAY NOT BE MADE AS
REQUESTED SINCE TRANSPORTATION COMMUTED RATE COMPUTATION IS BASED ON
DISTANCE FROM OLD STATION TO STORAGE POINT AND COMMUTED RATE STORAGE
REIMBURSEMENT INCLUDES TRANSPORTATION FROM STORAGE TO FINAL DESTINATION.
CHARLES F. OAKLEY - TRANSPORTATION AND STORAGE OF HOUSEHOLD GOODS:
THIS IS IN RESPONSE TO A REQUEST FROM MS. ORRIS C. HUET, AN
AUTHORIZED CERTIFYING OFFICER OF THE DEPARTMENT OF AGRICULTURE, FOR AN
ADVANCE DECISION CONCERNING THE VOUCHER OF MR. CHARLES F. OAKLEY, AN
EMPLOYEE OF THE FOREST SERVICE, DEPARTMENT OF AGRICULTURE. MR. OAKLEY
HAS ASKED FOR REIMBURSEMENT OF CERTAIN TRANSPORTATION CHARGES INCURRED
IN MOVING HIS HOUSEHOLD GOODS INCIDENT TO A PERMANENT CHANGE OF STATION.
TRAVEL AUTHORIZATION NO. 020300052, DATED MAY 12, 1976, WAS ISSUED
INCIDENT TO MR. OAKLEY'S TRANSFER FROM OROFINO, IDAHO, TO CUSTER, SOUTH
DAKOTA. HE WAS AUTHORIZED SHIPMENT AND TEMPORARY STORAGE OF HOUSEHOLD
GOODS BY THE COMMUTED RATE METHOD. MR. OAKLEY HAD 4,960 POUNDS OF
HOUSEHOLD GOODS TRANSPORTED BY BEKINS VAN LINES FROM OROFINO, IDAHO, TO
RAPID CITY, SOUTH DAKOTA, ON MAY 14, 1976. THE SHIPMENT WAS PLACED IN
STORAGE AT RAPID CITY SINCE THIS STORAGE FACILITY WAS THE CLOSEST ONE TO
CUSTER, THE ULTIMATE DESTINATION OF THE GOODS. MR. OAKLEY'S HOUSEHOLD
GOODS WERE REMOVED FROM STORAGE ON JUNE 16, 1976, AND WERE TRANSPORTED
TO HIS NEW RESIDENCE AT CUSTER, 48 MILES FROM RAPID CITY.
MR. OAKLEY CLAIMED TRANSPORTATION CHARGES TOTALING $994.88 AND
TEMPORARY STORAGE CHARGES OF $202.86. THE CHARGES WERE BASED ON
COMMUTED RATES IN GENERAL SERVICES ADMINISTRATION (GSA) BULLETIN FPMR
A-2. HE WAS REIMBURSED THESE EXPENSES.
MR. OAKLEY HAS SUBMITTED AN ADDITIONAL VOUCHER FOR $493,52. HE
CONTENDS THAT THE MOVE SHOULD BE BROKEN DOWN INTO TWO LINE HAULS: (1)
TRANSPORTATION OF 4,960 POUNDS OF HOUSEHOLD GOODS FROM OROFINO, IDAHO,
TO RAPID CITY, SOUTH DAKOTA; AND (2) TRANSPORTATION OF 4,960 POUNDS OF
HOUSEHOLD GOODS FROM RAPID CITY, SOUTH DAKOTA, TO CUSTER, SOUTH DAKOTA.
APPLYING THE APPROPRIATE COMMUTED RATE TO EACH PORTION, MR. OAKELY HAS
COMPUTED TRANSPORTATION CHARGES OF $952.32 AND $486.08, FOR A TOTAL OF
$1,438.40. AS HE HAS PREVIOUSLY BEEN REIMBURSED $944.88, HE NOW SEEKS
REIMBURSEMENT OF THE DIFFERENCE, $493.52. THE CERTIFYING OFFICER STATES
THAT THE VOUCHER HERE INVOLVED HAS BEEN RECOMPUTED AND INDICATES THAT
$7.44 IS DUE. SHE ASKS WHETHER THAT AMOUNT OF ANY AMOUNT IN ADDITION TO
THAT ALREADY PAID TO MR. OAKLEY MAY BE CERTIFIED FOR PAYMENT.
IN SITUATIONS SIMILAR TO THAT UNDER CONSIDERATION, WE HAVE HELD THAT
THE DISTANCE TO BE USED IN CHOOSING THE APPROPRIATE COMMUTED RATE IS THE
DISTANCE BETWEEN THE STORAGE FACILITY AND THE OLD OR NEW DUTY STATION,
DEPENDING ON WHERE THE GOODS HAVE BEEN PLACED IN STORAGE. B-186351, MAY
10, 1977; B-167488, AUGUST 13, 1969; B-165253, OCTOBER 9, 1968.
ACCORDINGLY, THE COMMUTED RATE TO BE USED IN CALCULATING THE COST OF
TRANSPORTING MR. OAKLEY'S HOUSEHOLD GOODS IS TO BE DETERMINED BY THE
DISTANCE BETWEEN OROFINO, IDAHO, THE OLD DUTY STATION AND RAPID CITY,
SOUTH DAKOTA, THE LOCATION OF THE STORAGE FACILITY. MR. OAKLEY'S
CONTENTION THAT THE DISTANCE SHOULD BE DIVIDED INTO TWO PORTIONS AND THE
COMMUTED RATE SHOULD BE APPLIED FOR LINE-HAUL TRANSPORTATION TO EACH
PORTION IS NOT SUPPORTED BY THE REGULATIONS. AS DEFINED BY THE FEDERAL
TRAVEL REGULATIONS (FPMR 101-7) PARA. 2-8.3A(1) FTR, "THE COMMUTED RATE
INCLUDES COST OF LINE-HAUL TRANSPORTATION, PACKING, CRATING, UNPACKING,
DRAYAGE INCIDENT TO TRANSPORTATION, AND OTHER ACCESSORIAL CHARGES."
REIMBURSEMENT IS THEN CALUCLATED IN ACCORDANCE WITH FTR PARA. 2-8.3A(2).
MR. OAKELY IS ALSO ENTITLED TO REIMBURSEMENT OF THE COSTS OF
TEMPORARY STORAGE OF HIS GOODS AT RAPID CITY AND DRAYAGE TO CUSTER, AS
LONG AS THESE COSTS DO NOT EXCEED THE COMMUTED RATES FOR STORAGE AS
PROVIDED IN GSA BULLETIN FPMR A-2. PARAGRAPH 2-8.5B(1) OF THE FTR
STATES IN PERTINENT PART:
"IN CONNECTION WITH TRANSPORTATION WITHIN THE CONTERMINOUS UNITED
STATES UNDER THE COMMUTED RATE SYSTEM, COSTS OF TEMPORARY STORAGE WITHIN
THE APPLICABLE WEIGHT LIMIT WILL BE REIMBURSED TO THE EMPLOYEE IN THE
AMOUNT OF HIS COSTS FOR STORAGE INCLUDING IN AND OUT CHARGES AND
NECESSARY DRAYAGE, BUT NOT TO EXCEED THE COMMUTED RATES FOR STORAGE IN
GSA BULLETIN FPMR A-2. ***"
THE COMMUTED RATE REFERRED TO INCLUDES THE ACTUAL STORAGE RATE AND
THE COST OF TRANSPORTING MR. OAKLEY'S HOUSEHOLD GOODS FROM RAPID CITY
TO CUSTER, THE FINAL DESTINATION. SEE B-186351, MAY 10, 1977.
MR. OAKLEY SUGGESTS THAT THE CHARGES AS CALCULATED UNDER THE COMMUTED
RATE SCHEDULES ARE LOWER THAN THE MAXIMUM ALLOWED BY THE INTERSTATE
COMMERCE COMMISSION. IN PARTICULAR CASES THIS IS TRUE SINCE THE
SCHEDULES ARE BASED ON TARIFFS FILED WITH THE COMMISSION AND DO NOT
REFLECT ANY SINGLE CARRIER'S TARIFF. THESE SCHEDULES ARE PREPARED BY
GSA PURSUANT TO FTR PARA. 2-8.3A(1), WHICH PROVIDES THE FOLLOWING:
"UNDER THE COMMUTED RATE SYSTEM AN EMPLOYEE MAKES HIS OWN
ARRANGEMENTS FOR TRANSPORTING HOUSEHOLD GOODS BETWEEN POINTS WITHIN THE
CONTERMINOUS UNITED STATES. HE SELECTS AND PAYS THE CARRIER OR
TRANSPORTS HIS GOODS BY NONCOMMERCIAL MEANS AND IS REIMBURSED BY THE
GOVERNMENT IN ACCORDANCE WITH SCHEDULES OF COMMUTED RATES WHICH ARE
CONTAINED IN GSA BULLETIN FPMR A-2, COMMUTED RATE SCHEDULE FOR
TRANSPORTATION OF HOUSEHOLD GOODS.
THE SCHEDULES OF COMMUTED RATES WHICH ARE DEVELOPED FROM TARIFFS THAT
CARRIERS HAVE FILED WITH THE INTERSTATE COMMERCE COMMISSION CONSIST OF
TABLES TO BE APPLIED TO THE PARTICULAR TRANSPORTATION INVOLVED. ***"
UNDER THIS SYSTEM, THE EMPLOYEE IS PAID AN ALLOWANCE BASED ON THE
WEIGHT AND DISTANCE OF THE SHIPMENT RATHER THAN THE ACTUAL COST OF THE
SHIPMENT. B-177743, FEBRUARY 2, 1973. THE COMMUTED RATE SYSTEM IS AN
APPROXIMATION AND IS NOT DESIGNED TO REIMBURSE THE EMPLOYEE HIS EXACT
EXPENSES. AS AN APPROXIMATION, IT IS IMPOSSIBLE TO TAKE INTO ACCOUNT
ALL CONTINGENCIES WITH WHICH EVERY EMPLOYEE COULD BE CONFRONTED IN
TRANSPORTING HIS HOUSEHOLD GOODS. THE REIMBURSEMENT WILL AT TIMES BE
LESS THAN THE ACTUAL COSTS, WHILE AT OTHER TIMES IT WILL BE MORE.
B-186351, MAY 10, 1977; B-174642, MARCH 6, 1972.
MR. OAKLEY ALSO QUESTIONS THE USE OF THE COMMUTED RATE SYSTEM IN HIS
SITUATION RATHER THAN USING THE ACTUAL EXPENSE METHOD. PARAGRAPH
2-8.3C(3) OF THE FTR SETS FORTH THE POLICY FOR THE USE OF THE COMMUTED
RATE SYSTEM FOR THE TRANSPORTATION OF HOUSEHOLD GOODS WHEN INDIVIDUAL
TRANSFERS ARE INVOLVED AS FOLLOWS:
"THE GENERAL POLICY IS THAT COMMUTED RATES SHALL BE USED FOR
TRANSPORTATION OF EMPLOYEE'S HOUSEHOLD GOODS WHEN INDIVIDUAL TRANSFERS
ARE INVOLVED, AND THAT APPROPRIATE ACTION, DEPENDING ON THE AMOUNT OF
GOODS TO BE TRANSPORTED, SHALL BE TAKEN TO ESTIMATE AND COMPARE ACTUAL
EXPENSE METHOD COSTS WITH COMMUTED RATE COSTS WHEN GROUPS OF EMPLOYEES
ARE TRANSFERRED BETWEEN THE SAME OFFICIAL STATIONS AT APPROXIMATELY THE
SAME TIME SO THAT THE METHOD RESULTING IN LESS COST TO THE GOVERNMENT
MAY BE USED. SPECIFIC PROCEDURES TO BE FOLLOWED ARE CONTAINED IN
2-8.3C(4)."
THE CRITERIA ESTABLISHED FOR THE USE OF THE ACTUAL EXPENSE METHOD
WHEN INDIVIDUAL TRANSFERS ARE INVOLVED IS AS FOLLOWS:
"AGENCY EXPERIENCE WITH THE ACTUAL EXPENSE METHOD HAS SHOWN THAT
SHIPMENT BY GOVERNMENT BILL OF LADING DOES NOT RESULT IN SAVINGS SIMPLY
BECAUSE A LINE-HAUL DISCOUNT IS AVAILABLE. THEREFORE, THE COMMUTED RATE
SYSTEM SHALL BE USED FOR INDIVIDUAL TRANSFERS WITHOUT CONSIDERATION
BEING GIVEN THE ACTUAL EXPENSE METHOD, EXCEPT THAT THE ACTUAL EXPENSE
METHOD MAY BE USED IF THE ACTUAL COSTS TO BE INCURRED BY THE GOVERNMENT
FOR PACKING AND OTHER ACCESSORIAL SERVICES ARE PREDETERMINED (AT LEAST
AS TO PRICE PER 100 POUNDS) AND IF THAT METHOD IS EXPECTED TO RESULT IN
A REAL SAVINGS TO THE GOVERNMENT OF $100 OR MORE. ***"
FTR PARA. 2-8.3C(4)(A).
IN THIS CONNECTION WE HAVE HELD THAT ONCE AN ADMINISTRATIVE DECISION
IS MADE AS TO THE METHOD OF REIMBURSEMENT, IT BECOMES MANDATORY THAT THE
EMPLOYEE BE REIMBURSED BY SUCH METHOD. B-174642, MARCH 6, 1972;
B-185577, APRIL 28, 1976.
WE ARE UNABLE TO CONSIDER MR. OAKLEY'S CLAIM FROM AN EQUITABLE
VIEWPOINT AS WE WILL NOT EXERCISE EQUITY JURISDICTION UNLESS IT HAS BEEN
SPECIFICALLY GRANTED BY STATUTE. 54 COMP. GEN. 527 (1974). THUS, WE
CANNOT ALLOW CLAIMS FOR TRANSPORTATION EXPENSES WHICH EXCEED THOSE
REIMBURSED BY THE COMMUTED RATE METHOD. B-186975, MARCH 16, 1977.
ACCORDINGLY, MR. OAKLEY'S RECLAIM VOUCHER FOR $493.52 MAY NOT BE
CERTIFIED FOR PAYMENT. WE NOTE THAT MR. OAKLEY HAS BEEN REIMBURSED
$944.88 FOR THE TRANSPORTATION OF HIS GOODS BASED ON A COMMUTED RATE OF
$19.05 PER HUNDRED POUNDS. OUR REVIEW INDICATES THAT THE RATE OF $18.75
SHOULD HAVE BEEN USED. SEE TABLE 3, GSA BULLETIN FPMR A-2, SUPP. 61,
ATTACHMENT A. HOWEVER, SINCE THE OVERPAYMENT IS ONLY $14.88, NO
COLLECTION ACTION NEED BE TAKEN.
B-189685, NOV 2, 1977
HEADNOTES-UNAVAILABLE
FORMER VIETNAMESE EMPLOYEE OF DEPARTMENT OF ARMY IN DA NANG AREA
CLAIMS COMPENSATION FOR A BIWEEKLY PAY PERIOD ENDING DECEMBER 6, 1971,
AND FOR TET BONUS FOR PERIOD JANUARY 1, 1971, THROUGH DECEMBER 6, 1971,
AS HE STATES HE NEVER RECEIVED PAYMENTS. DEPARTMENT OF ARMY HAS BEEN
UNABLE TO LOCATE CLAIMANT'S PAY RECORDS FOR PERIOD OF CLAIM AND CLAIMANT
IS UNABLE TO PROVIDE ANY DOCUMENTATION IN SUPPORT OF CLAIM. CLAIM MAY
NOT BE ALLOWED AS THERE IS NO EVIDENCE WHICH CLEARLY ESTABLISHES
LIABILITY ON PART OF GOVERNMENT.
NGUYEN-KIN-SON - CLAIM FOR COMPENSATION:
BY LETTER DATED AUGUST 29, 1977, MR. NGUYEN-KIN-SON APPEALED THE
ACTION BY OUR CLAIMS DIVISION IN CERTIFICATE OF SETTLEMENT DATED JUNE
21, 1977, WHICH DENIED HIS CLAIM FOR COMPENSATION INCIDENT TO HIS
EMPLOYMENT IN THE REPUBLIC OF VEITNAM BY THE DEPARTMENT OF THE ARMY.
MR. SON ASSERTS THAT HE WAS NOT PAID HIS BIWEEKLY SALARY FOR THE LAST
PAY PERIOD BEGINNING IN NOVEMBER 1971, AND ENDING ON OR ABOUT DECEMBER
6, 1971, AND THAT HE ALSO DID NOT RECEIVE HIS TET BONUS FOR THE PERIOD
JANUARY 1, 1971, THROUGH DECEMBER 6, 1971.
THE RECORD SHOWS THAT DURING THE PERIOD COVERED BY THE CLAIM MR. SON
WAS EMPLOYED BY THE DEPARTMENT OF THE ARMY IN THE DA NANG AREA CIVILIAN
PERSONNEL OFFICE, AS A WAGE AND CLASSIFICATION SPECIALIST AND THEN AS A
SUPERVISORY PERSONNEL MANAGEMENT SPECIALIST, VGS-11, STEP 2. ON APRIL
28, 1972, MR. SON WROTE TO THE CIVILIAN PERSONNEL OFFICER IN THE CAN THO
AREA STATING THAT HE HAD NOT RECEIVED HIS PAY FOR THE LAST BIWEEKLY PAY
PERIOD OF SERVICE IN THE DA NANG AREA CIVILIAN PERSONNEL OFFICE AND THAT
HE ALSO HAD NOT RECEIVED PAYMENT OF ANY OF HIS 1971 TET BONUS FOR THE
PERIOD JANUARY 1, 1971, THROUGH DECEMBER 6, 1971. ON DECEMBER 15, 1972,
MR. SON PURSUED HIS CLAIM FOR PAYMENT BY WRITING A LETTER, TO THE
DIRECTOR, OFFICE OF CIVILIAN PERSONNEL, SAIGON, IN WHICH HE RESTATED THE
BASIS OF HIS CLAIM.
ON NOVEMBER 12, 1975, THE U.S. ARMY SUPPORT COMMAND, HAWAII,
SUBMITTED A REQUEST TO THE DIRECTOR, NATIONAL PERSONNEL RECORDS CENTER,
ST. LOUIS, MISSOURI, REQUESTING THAT MR. SON'S PAYROLL RECORDS BE
FORWARDED TO THEM SO THAT AN APPROPRIATE DETERMINATION COULD BE MADE ON
HIS CLAIM. THE NATIONAL RECORDS CENTER WAS UNABLE TO LOCATE MR. SON'S
PERSONNEL AND PAYROLL FILES. THE RECORD SHOWS THAT A SUBSEQUENT SEARCH
AT THE RECORDS CENTER AS WELL AS AT THE DEPARTMENT OF ARMY FAILED TO
LOCATE THE PERTINENT FILES. BY LETTER OF MAY 31, 1977, THE U.S. ARMY
FINANCE AND ACCOUNTING CENTER, INDIANAPOLIS, INDIANA, INFORMED OUR
CLAIMS DIVISION THAT THE FINANCE AND ACCOUNTING OFFICE WHICH ORIGINALLY
PAID MR. SON HAD BEEN DEACTIVATED AND THAT THE ARMY HAD BEEN UNABLE TO
LOCATE MR. SON'S PAY RECORS. THE ARMY HAS RECOMMENDED THAT MR. SON'S
CLAIM NOT BE PAID AS THERE IS NO EVIDENCE WHICH WOULD SUPPORT THE
LIABILITY OF THE GOVERNMENT. IN A LETTER TO OUR CLAIMS DIVISION DATED
APRIL 19, 1977, MR. SON STATES THAT HE IS UNABLE TO PROVIDE ANY
DOCUMENTATION IN SUPPORT OF HIS CLAIM AS HE LEFT BEHIND HIS PERSONNEL
AND PAY RECORDS WHEN HE HURRIEDLY EVACUATED VIETNAM IN LATE APRIL 1975
TO ESCAPE THE ADVANCING COMMUNIST TROOPS.
THE SUBMISSION OF A CLAIM TO THIS OFFICE DOES NOT CREATE A
PRESUMPTION OF THE CLAIMANT'S ENTITLEMENT. IN PRESENTING A CLAIM
AGAINST THE UNITED STATES THE BURDEN IS ON THE CLAIMANT TO FURNISH
SUBSTANTIAL EVIDENCE TO CLEARLY ESTABLISH LIABILITY ON THE PART OF THE
GOVERNMENT. B-178654, APRIL 8, 1974. ACCORDINGLY, THE REGULATIONS OF
THIS OFFICE GOVERNING CLAIMS SETTLEMENTS REQUIRE A CLAIMANT TO SUPPORT
HIS CLAIM BY FURNISHING ACCEPTABLE EVIDENCE.
IN THIS CONNECTION 4 C.F.R. 31.7 PROVIDES AS FOLLOWS:
"31.7 BASIS OF CLAIM SETTLEMENTS.
CLAIMS ARE SETTLED ON THE BASIS OF THE FACTS AS ESTABLISHED BY THE
GOVERNMENT AGENCY CONCERNED AND BY EVIDENCE SUBMITTED BY THE CLAIMANT.
SETTLEMENTS ARE FOUNDED ON A DETERMINATION OF THE LEGAL LIABILITY OF THE
UNITED STATES UNDER THE FACTUAL SITUATION INVOLVED AS ESTABLISHED BY THE
WRITTEN RECORD. THE BURDEN IS ON CLAIMANTS TO ESTABLISH THE LIABILITY
OF THE UNITED STATES, AND THE CLAIMANTS' RIGHT TO PAYMENT. THE
SETTLEMENT OF CLAIMS IS BASED UPON THE WRITTEN RECORD ONLY."
AS STATED ABOVE, MR. SON IS UNABLE TO PROVIDE THIS OFFICE WITH
DOCUMENTATION WHICH WOULD ESTABLISH HIS RIGHT TO PAYMENT.
ORDINARILY, PROOF OF THE VALIDITY OF A CLAIM CAN BE FOUND IN
GOVERNMENT RECORDS. HOWEVER, IN THIS INSTANCE, THE AGENCY RECORDS
NECESSARY TO PROVE OR DISPORVE THE VALIDITY OF THE CLAIM HAVE BEEN
EITHER LOST OR INADVERTENTLY DESTROYED. ACCORDINGLY, THERE IS NO BASIS
ON WHICH THE CLAIM MAY BE ALLOWED. SEE MATTER OF LEN DOCK LOUIE,
B-183900, AUGUST 3, 1976.
IN VIEW OF THE ABOVE, SINCE NO RECORDS SUPPORTING THIS CLAIM HAVE
BEEN PRESENTED TO THIS OFFICE, THE ACTION TAKEN BY OUR CLAIMS DIVISION
IN THE MATTER IS SUSTAINED.
B-189708, NOV 2, 1977
HEADNOTES-UNAVAILABLE
1. WHERE A RESERVE OFFICER RECEIVED, AFTER SEPARATION FOLLOWING ONLY
9 MONTHS OF CONTINUOUS ACTIVE DUTY, READJUSTMENT PAY OF $2,403.60, AND
HE MADE NO ATTEMPT TO BRING THE MATTER TO THE ATTENTION OF AUTHORITIES,
HIS DEBT TO UNITED STATES MAY NOT BE WAIVED UNDER 10 U.S.C. SEC. 2774,
AS REASONABLE PERSON IN HIS CIRCUMSTANCES SHOULD HAVE KNOWN HE WAS NOT
ENTITLED TO AMOUNT IN QUESTION SINCE HE HAD SERVED LESS THAN 5 YEARS OF
CONTINUOUS ACTIVE DUTY.
2. WHERE AN OFFICER RECEIVED FLIGHT PAY FOR A PERIOD AFTER HE WAS
SUSPENDED FROM FLIGHT STATUS AND THE RECORD INDICATES HE KNEW THAT BEING
ON FLIGHT STATUS WAS A PREREQUISITE FOR ENTITLEMENT TO FLIGHT PAY, AND
HE MADE NO ATTEMPT TO BRING THE MATTER TO THE ATTENTION OF AUTHORITIES,
HIS DEBT TO UNITED STATES MAY NOT BE WAIVED UNDER 10 U.S.C. SEC. 2774.
MR. JOHN R. BASILE:
THIS ACTION IS IN RESPONSE TO A LETTER DATED JANUARY 20, 1977, FROM
MR. JOHN R. BASILE, 000-00-7249, A FORMER SECOND LIEUTENANT IN THE AIR
FORCE RESERVE, APPEALING THE ACTION TAKEN BY OUR CLAIMS DIVISION ON
MARCH 25, 1976, DENYING HIS REQUEST FOR WAIVER OF THE CLAIM OF THE
UNITED STATES AGAINST HIM IN THE GROSS AMOUNT OF $2,476.93.
THE RECORD INDICATES THAT MR. BASILE, A COLLEGE GRADUATE, WAS ON
ACTIVE DUTY WITH THE AIR FORCE STATIONED AT MATHER AIR FORCE BASE,
CALIFORNIA, PARTICIPATING IN THE UNDERGRADUATE NAVIGATOR TRAINING (UNT)
PROGRAM, WHEN ON APRIL 9, 1974, HE REQUESTED THAT HE BE ALLOWED TO
WITHDRAW FROM THE UNT PROGRAM. HE WAS SUSPENDED FROM FLYING STATUS IN
RESPONSE TO HIS REQUEST EFFECTIVE APRIL 10, 1974, BY ORDERS DATED APRIL
11, 1974. HOWEVER, HIS FLIGHT PAY WAS ERRONEOUSLY CONTINUED THROUGH MAY
1, 1974, RESULTING IN AN OVERPAYMENT OF $73.33. MR. BASILE NEVER
BROUGHT THIS OVERPAYMENT TO THE ATTENTION OF THE GOVERNMENT.
MR. BASILE APPARENTLY DESIRED SEPARATION FROM THE AIR FORCE, AND THE
AIR FORCE DETERMINED THAT THIS WAS THE BEST COURSE. ACCORDINGLY, HE WAS
DISCHARGED ON MAY 18, 1974. AT THAT TIME HE HAD SERVED ONLY ABOUT 9
MONTHS OF CONTINUOUS ACTIVE DUTY.
FOLLOWING HIS DISCHARGE MR. BASILE RECEIVED A FINAL CHECK FROM THE
AIR FORCE IN THE NET AMOUNT OF $2,158.78. THIS INCLUDED FINAL PAY AND
ALLOWANCES AND AN ERRONEOUS CREDIT OF $2,403.60 FOR READJUSTMENT PAY TO
WHICH HE WAS NOT ENTITLED, LESS TAX AND CERTAIN SMALL DEDUCTIONS. IT IS
NOT CLEAR WHETHER MR. BASILE RECEIVED ANY SORT OF STATEMENT EXPLAINING
WHAT THE CHECK REPRESENTED. HOWEVER, IN HIS APPLICATION FOR WAIVER HE
INDICATES THAT HE HAD THOUGHT IT WAS READJUSTMENT PAY AND THAT HE WAS
ENTITLED TO IT. MR. BASILE MADE NO ATTEMPT TO BRING THE AMOUNT OF THIS
CHECK TO THE ATTENTION OF THE GOVERNMENT.
SHORTLY THEREAFTER, AIR FORCE ACCOUNTING OFFICERS DISCOVERED THAT MR.
BASILE HAD BEEN IMPROPERLY PAID THE FLIGHT PAY FOR APRIL 10, THROUGH MAY
1, 1974, SINCE HE HAD NOT BEEN ON FLYING STATUS DURING THAT PERIOD
(DEPARTMENT OF DEFENSE MILITARY PAY AND ALLOWANCES ENTITLEMENTS MANUAL,
PARAGRAPH 20111, CHANGE 32). IT WAS ALSO DISCOVERED THAT THE
READJUSTMENT PAY HE RECEIVED WAS ERRONEOUS AS HE HAD NOT SERVED 5 YEARS
OF CONTINUOUS ACTIVE DUTY (10 U.S.C. SEC. 687 (1970)). MR. BASILE WAS
NOTIFIED OF THE ERRONEOUS PAYMENTS AND WAS ASKED TO REFUND THEM. HE
REQUESTED THAT HIS DEBT BE WAIVED PURSUANT TO 10 U.S.C. SEC. 2774 (SUPP.
11,1972). IN A REPORT TO OUR CLAIMS DIVISION DATED MARCH 20, 1975, ON
THE WAIVER REQUEST THE AIR FORCE RECOMMENDED THAT WAIVER BE DENIED. THE
REPORT STATED THAT THERE IS NO INDICATION OF FRAUD OR MISREPRESENTATION
ON THE PART OF THE MEMBER OR ANY OTHER PERSON HAVING AN INTEREST IN
OBTAINING WAIVER OF THE DEBT. HOWEVER, IT FURTHER STATED IN PART AS
FOLLOWS:
"THE MEMBER STATES HE WAS NOT AWARE OF THE OVERPAYMENT. HE DID NOT
'CLEAR' FINANCE PRIOR TO HIS DEPARTURE AND THERFORE, DID NOT RECEIVE AN
OUT-PROCESSING INTERVIEW WITH FINANCE PERSONNEL TO VERIFY HIS
ENTITLEMENTS. SINCE HE HAD INITIATED ACTION TO DISCONTINUE HIS FLYING
STATUS WHICH RESULTED IN HIS SUBSEQUENT INVOLUNTARY RELEASE FROM ACTIVE
DUTY AND HAD SERVED ONLY NINE MONTHS FOUR DAYS, HE SHOULD HAVE
QUESTIONED RECEIVING $2,158.78 ON 26 AUG 74, THREE MONTHS AFTER
DISCHARGE."
OUR CLAIMS DIVISION CONCURRED WITH THE RECOMMENDATION OF THE AIR
FORCE, AND DENIED MR. BASILE'S REQUEST FOR WAIVER OF HIS DEBT.
SECTION 2774 OF TITLE 10, UNITED STATES CODE, AUTHORIZES THE
COMPTROLLER GENERAL TO WAIVE CLAIMS OF THE UNITED STATES ARISING OUT OF
ERRONEOUS PAYMENTS OF PAY OR ALLOWANCES (OTHER THAN TRAVEL AND
TRANSPORTATION ALLOWANCES) TO MEMBERS OR FORMER MEMBERS OF THE UNIFORMED
SERVICES. HOWEVER, THE COMPTROLLER GENERAL MAY NOT WAIVE ANY CLAIM:
"*** IF, IN HIS OPINION, THERE EXISTS, IN CONNECTION WITH THE CLAIM,
AN INDICATION OF FRAUD, MISREPRESENTATION, FAULT, OR LACK OF GOOD FAITH
ON THE PART OF THE MEMBER OR ANY OTHER PERSON HAVING AN INTEREST IN
OBTAINING A WAIVER OF THE CLAIM ***." 10 U.S.C. SEC. 2774(B)(1).
FAULT, AS USED IN THE PRECEDING QUOTE, IS CONSIDERED TO EXIST IF, IN
LIGHT OF ALL THE FACTS, IT IS DETERMINED THAT THE MEMBER SHOULD HAVE
KNOWN THAT AN ERROR EXISTED AND TAKEN ACTION TO HAVE IT COREECTED. THE
STANDARD EMPLOYED BY THIS OFFICE IN MAKING THIS DETERMINATION IS WHETHER
A REASONABLE PERSON SHOULD HAVE BEEN AWARE THAT HE WAS RECEIVING PAYMENT
IN EXCESS OF HIS PROPER ENTITLEMENTS. B-185881, JANUARY 3, 1977.
IN REQUESTING WAIVER MR. BASILE STATED THAT OTHER OFFICERS HAD
"TALKED ABOUT 'READJUSTMENT' OR SOME SORT OF 'SOLVENT' PAY ON THE TIME
LEFT THEY WERE NOT ABLE TO SERVE." HE ALSO INDICATES, CONCERNING THE
AMOUNT OF THE ERRONEOUS PAYMENT, THAT WHAT MAY BE A LARGE SUM OF MONEY
TO ONE PERSON COULD VERY WELL BE A SMALL SUM TO ANOTHER.
WE THINK THAT A PERSON SUCH AS MR. BASILE, AN OFFICER AND A COLLEGE
GRADUATE, SHOULD HAVE KNOWN THAT HE WAS NOT ENTITLED TO THE AMOUNT HE
RECEIVED FOLLOWING HIS SEPARATION. FOR, WHILE TO SOME PEOPLE THE SUM
MAY BE SMALL, CONSIDERING THE NORMAL PAY OF A SECOND LIEUTENANT, THE SUM
WAS FAR TOO LARGE TO CONSIST OF THE PAY AND ALLOWANCES ACTUALLY OWING
HIM. ALSO, AN OFFICER OF THE ARMED FORCES IS RESPONSIBLE FOR HAVING AT
LEAST AN APPROXIMATE IDEA OF WHAT HIS ENTITLEMENTS ARE, AND SHOULD NOT
RELY MERELY ON WHAT OTHER OFFICERS HAD "TALKED ABOUT." COMPARE B-182486,
NOVEMBER 14, 1975; B-184514, SEPTEMBER 10, 1975. THEREFORE, UPON
RECEIPT OF THE CHECK FOR $2,158.78, SOME 3 MONTHS AFTER DISCHARGE, HE
SHOULD HAVE BEEN ON NOTICE OF AT LEAST THE POSSIBILITY THAT AN ERROR HAD
BEEN MADE, AND HE SHOULD HAVE INQUIRED OF THE PROPER OFFICIALS. BECAUSE
HE DID NOT DO SO, HE MUST BE CONSIDERED AT LEAST PARTIALLY AT FAULT IN
THE MATTER OF THE READJUSTMENT PAY. SEE B-184783, MAY 12, 1976;
B-185105, MARCH 11, 1976.
WITH REGARD TO THE FLIGHT PAY, WE NOTE THAT IN MR. BASILE'S LETTER OF
APPEAL, HE STATES:
"*** ALL I WAS TOLD AT THE TIME WAS THAT A PERSON ON FLYING STATUS
NEEDED FOUR HOURS A MONTH TO QUALIFY FOR THE $100 A MONTH FLIGHT PAY."
IT APPEARS, THEREFORE, THAT MR. BASILE KNEW THAT BEING ON FLYING
STATUS WAS A PREREQUISITE FOR ENTITLEMENT TO FLIGHT PAY. IN VIEW OF
THIS, WE THINK HE SHOULD HAVE INFORMED THE PROPER OFFICIALS WHEN HE
RECEIVED FLIGHT PAY FOR THE PERIOD AFTER HIS REMOVAL FROM FLYING STATUS.
AGAIN, BECAUSE HE DID NOT DO SO, HE MUST BE CONSIDERED PARTIALLY AT
FAULT.
ACCORDINGLY, THE DENIAL OF MR. BASILE'S REQUEST FOR A WAIVER OF THE
GOVERNMENT'S CLAIM AGAINST HIS IS SUSTAINED.
B-189895, NOV 2, 1977
HEADNOTES-UNAVAILABLE
EMPLOYEE COMMITTED SUICIDE APPROXIMATELY 2 MONTHS AFTER VOLUNTARY
RESIGNATION. ALTHOUGH EMPLOYEE'S INITIAL MEMORANDUM PRESENTED AGENCY
WITH ALTERNATIVE OF GRANTING LEAVE OR ACCEPTING RESIGNATION, SUBSEQUENT
DOCUMENTS SHOW EMPLOYEE INTENDED RESIGNATION.SEPREATION DATE MAY NOT BE
CHANGED FOR PURPOSE OF GRANTING SICK LEAVE, ANNUAL LEAVE, AND LEAVE
WITHOUT PAY UNTIL DEATH BECAUSE SUCH DATE MAY NOT BE CHANGED IN ABSENCE
OF VIOLATION OF REGULATION OR ADMINISTRATIVE ERROR FAILING TO EFFECT
INTENT OF PARTIES.
RALPH R. STURGES - CHANGE OF SEPARATION DATE:
BY A LETTER DATED AUGUST 11, 1977, MR. FRANK G. HEALEY, DIRECTOR OF
PERSONNEL, FEDERAL HOME LOAN BANK BOARD (FHLBB), REQUESTED OUR DECISION
CONCERNING THE PROPRIETY OF REVISING THAT AGENCY'S ADMINISTRATIVE
RECORDS REGARDING THE DATE ON WHICH MR. RALPH STURGES SEPARATED FROM
THAT AGENCY.
THE RECORD INDICATES THAT MR. STRUGES WAS APPOINTED ON SEPTEMBER 21,
1975, AS A SAVINGS AND LOAN EXAMINER, GRADE GS-5, IN SAN FRANCISCO,
CALIFORNIA. HE WAS PROMOTED TO GRADE GS-7 ON OCTOBER 10, 1976. ON
FEBRUARY 3, 1977, HE SUBMITTED TO HIS IMMEDIATE SUPERVISOR A MEMORANDUM
CAPTIONED "SUBJECT: EMERGENCY LEAVE (OR RESIGNATION - TAKE YOUR
CHOICE)," WHICH STATED AS FOLLOWS:
"UNTIL FURTHER NOTICE CONSIDER ME TO BE ON EMERGENCY LEAVE EFFECTIVE
8:00 A.M. TODAY OR TO HAVE RESIGNED EFFECTIVE TODAY.
"ENCLOSED IS A CHECK FOR $400 TO COVER MY TRAVEL ADVANCE IN CASE I DO
NOT RETURN TO WORK.
"IF THIS IS TO BE MY RESIGNATION, PLEASE HAVE MY FINAL CHECK SENT TO
112 ESPLANADE #255, PACIFICA, CALIF. 94044 IF SENT PRIOR TO FEBRUARY 15,
1977. IF THE FINAL CHECK IS MAILED AFTER THIS DATE, SEND IT TO 2751
HARRISON ST., LONG BEACH, CALIF. 90810.
"IF I HAVE NOT RETURNED TO WORK BY FEBRUARY 15, 1977 - YOU WILL
EITHER HAVE THE REMAINDER OF MY EQUIPMENT OR YOU WILL HAVE TO PICK IT UP
AT 112 ESPLANADE #225.
"SOME OF MY EQUIPMENT IS AT BAY VIEW FEDERAL. PLEASE TAKE CARE OF
IT."
BY A MEMORANDUM DATED FEBRUARY 4, 1977, THE AGENCY ACCEPTED MR.
STURGES' RESIGNATION EFFECTIVE AT THE CLOSE OF BUSINESS ON FEBRUARY 3,
1977. AT THE TIME OF HIS RESIGNATION, MR. STRUGES HAD ACCUMULATED 135
HOURS OF SICK LEAVE AND 36 HOURS OF ANNUAL LEAVE, HAVING TO HIS CREDIT 3
YEARS AND 7 MONTHS OF COMBINED MILITARY AND CIVILIAN SERVICE.
ON APRIL 5, 1977, MR. STURGES WAS FOUND DEAD IN HIS APARTMENT, THE
RESULT OF A SUICIDE. AT THE TIME OF HIS DEATH, MR. STRUGES APARENTLY
HAD NEVER MARRIED AND WAS WITHOUT ISSUE. HIS MOTHER, MRS. RUTH
STRUGES, THEREFORE, EXECUTED A STANDARD FORM 1155 CLAIMING THE UNPAID
COMPENSATION DUE HIM AS A CIVILIAN EMPLOYEE. IN ADDITION, BY A LETTER
DATED APRIL 28, 1977, MRS. STURGES WROTE TO THE AGENCY REQUESTING THAT
THE RESIGNATION ACTION BE RESCINDED AND THAT MR. STRUGES BE CARRIED IN
A LEAVE STATUS UNTIL THE DATE OF HIS DEATH. SHE CONTENDS THAT HER SON
WAS IN A "POOR MENTAL CONDITION" PRIOR TO HIS RESIGNATION AND THAT HIS
FEBRUARY 3, 1977, MEMORANDUM SHOULD HAVE BEEN TREATED AS A REQUEST FOR
LEAVE RATHER THAN AS A RESIGNATION. IT IS HER VIEW, THEREFORE, THAT IT
WAS ADMINISTRATIVE ERROR FOR THE AGENCY TO ACCEPT HER SON'S RESIGNATION.
NOTING THAT THE REQUESTED CHANGE IN MR. STURGES' ADMINISTRATIVE
RECORDS COULD RESULT IN ESTABLISHING AN ELIGIBILITY FOR FEDERAL
EMPLOYEES GROUP LIFE INSURANCE BENEFITS ESTIMATED AT $25,000, THE AGENCY
INDICATES THAT IT IS WILLING TO EFFECT A CHANGE IN THE EMPLOYEE'S
SEPARATION DATE. IT IS THUS PROPOSED TO PLACE MR. STRUGES ON SICK LEAVE
AS OF FEBRUARY 3, 1977, ON ANNUAL LEAVE UPON THE EXPIRATION OF THE SICK
LEAVE, AND ON LEAVE WITHOUT PAY UNTIL THE DATE OF DEATH. THE FHLBB,
THEREFORE, HAS SOUGHT OUR DECISION AS TO THE LEGALITY OF THE PROPOSED
ACTIONS.
THE GENERAL RULE IS THAT THE DATE OF SEPARATION BY RESIGNATION IS THE
DATE TENDERED BY THE EMPLOYEE, AND SUCH DATE MAY NOT BE CHALLENGED ONCE
IT BECOMES AN ACCOMPLISHED FACT. 32 COMP. GEN. 111 (1952). THUS, AN
EMPLOYEE MAY NOT BE RESTORED TO A PAY STATUS FOR ANY PERIOD SUBSEQUENT
TO THE DATE OF SEPARATION FOR THE PURPOSE OF GRANTING LEAVE UNLESS THERE
WAS A BONA FIDE ADMINISTRATIVE ERROR OR A VIOLATION OF A VALID
REGULATION IN EFFECTING THE SEPARATION. 32 COMP. GEN. 421 (1953);
B-164232, MAY 28, 1968; AND ALBERT R. MARTIN, B-183178, JULY 22, 1975.
THUS, WE HAVE PERMITTED CORRECTIVE ACTION WHEN THE CIRCUMSTANCES OF
APRTICULAR CASE SHOW THAT THE RESIGNATION HAD NOT BEEN ACCEPTED IN THE
TERMS SUBMITTED OR THAT THE RESIGNATION AS EXECUTED DID NOT CONFORM WITH
THE INTENTION OF THE PARTIES. 21 COMP. GEN. 517(1941).
IN THE PRESENT CASE, MR. STRUGES' FEBRUARY 3, 1977, MEMORANDUM
COUCHED HIS REQUEST FOR "EMERGENCY" LEAVE AND THE STATEMENT OF
RESIGNATION IN THE ALTERNATIVE. WHEN, HOWEVER, THE AGEBCY ACCEPT HIS
RESIGNATION EFFECTIVE AT THE CLOSE OF BUSINESS ON BEBRUARY 3, 1977, MR.
STURGES DID NOT CONTROVERT OR PROTEST THAT ACTION.
INDEED, BY A LETTER DATED FEBRUARY 10, 1977, TO HIS FORMER
SUPERVISOR, MR. STURGES STATED THAT THE SPECIFIC TIME AT WHICH THE
RESIGNATION WAS TO BE MADE EFFECTIVE WAS "TOTALLY UNACCEPTABLE" AND THAT
HIS INTENT WAS TO BE CONSIDERED ON EMERGENCY LEAVE OR TO HAVE RESIGNED
EFFECTIVE 8 A.M. ON FEBRUARY 3, 1977. THUS, ALTHOUGH MR. STURGES WAS
PRESENTED WITH AMPLE OPPORTUNITY TO HAVE PROTESTED THE AGENCY'S
ACCEPTANCE OF HIS RESIGNATION, HE CHOSE TO RE-AFFIRM THAT ACTION. BY A
LETTER DATED FEBRUARY 25, 1977, THE AGENCY ADVISED MR. STURGES THAT HIS
RESIGNATION WAS MADE EFFECTIVE AS OF THE CLOSE OF BUSNIESS ON FEBRUARY
2, 1977, IN ACCORDANCE WITH HIS INTENTIONS. IT IS CLEAR, THEREFORE, IN
THE CIRCUMSTANCES, THAT MR. STURGES INTENDED TO RESIGN FROM HIS POSITION
WITH THE FHLBB, AND THAT HIS RESIGNATION WAS EFFECTED IN ACCORDANCE WITH
THAT INTENTION.
REGARDING THE CONTENTION THAT MR. STRUGES SUFFERED FROM A "POOR
MENTAL CONDITION" PRIOR TO HIS DEATH, WE NOTE THAT THERE IS NO JUDICIAL
DETERMINATION IN THE RECORD CONCERNING HIS MENATL CAPACITY.
ALTHOUGH THE AGENCY STATES THAT MR. STRUGES DEMONSTRATED "IRRATIONAL
BEHAVIOR" BEFORE HIS RESIGNATION, A JUDICIAL ADJUDICATION OF INCAPACITY
IS REQUIRED IN ORDER TO EFFECT A LIMITATION ON THE LEGAL RIGHTS AND
POWERS OF ADULTS. SEE CALIFORNIA CIVIL CODE SEC. 40 (1971). IN THE
ABSENCE OF SUCH A DETERMINATION, THEREFORE, MR. STRUGES IS PRESUMED TO
HAVE HAD THE LEGAL MENTAL CAPACITY TO DISCHARGE HIS RIGHTS AND
OBLIGATIONS.
SINCE IT THUS APPEARS THAT MR. STURGES FULLY INTENDED TO RESIGN HIS
EMPLOYMENT AND THAT THE RESIGNATION WAS IN ACCORDANCE WITH THAT
INTENTION, THERE IS NO AUTHORITY FOR RESTORING HIM TO A PAY STATUS FOR
THE PURPOSE OF GRANTING ACCUMULATED SICK OR ANNUAL LEAVE. ACCORDINGLY,
THE PROPOSED ACTION MAY NOT BE TAKEN.
B-188836, NOV 1, 1977
HEADNOTES-UNAVAILABLE
WHERE REQUEST FOR RECONSIDERATION OF GAO DECISION MERELY INTRODUCES
NEW FACTS WHICH FAIL TO CLEARLY DEMONSTRATE EITHER ERRORS OF FACT OR OF
LAW, PRIOR DECISION IS AFFIRMED.
CENTER CITY COMMITTEE OF THE PHILADELPHIA BUILDING TRADES COUNCIL -
REPUEST FOR RECONSIDERATION:
THE PROTESTER HAS REQUESTED RECONSIDERATION OF OUR DECISION CENTER
CITY COMMITTEE OF THE PHILADELPHIA BUILDING TRADES COUNCIL, B-18836,
JUNE 6, 1977, 77-1 CPD 396, IN WHICH WE DISMISSED THE PROTEST INVOLVING
REPAIR CONTRACTS EFFECTED BY THE PROPERTY DISPOSITION BRANCH,
PHILADELPHIA AREA OFFICE, DEPARTMENT OF HOUSING AND URGAN DEVELOPMENT
(HUD) BECAUSE UNDER 12 U.S.C., CHAPTER 13, SUCH MATTERS ARE NOT FOR
SETTLEMENT BY THIS OFFICE. WE INDICATED IN OUR DECISION THAT WE WOULD
REFER TO HUD THE ISSUE OF WHETHER CONTRACTORS UNDER HUD CONTRACTS WERE
PERFORMING THEIR CONTRACTS PROPERLY FOR WHATEVER CONSIDERATION THAT
AGENCY DEEMED APPROPRIATE.
THE PROTESTER'S REQUEST FOR RECONSIDERATION INCLUDES A COPY OF A
SEPTEMBER 3, 1976 HUD AUDIT REPORT AND A NUMBER OF BID TABULATION
SHEETS. THE HUD AUDIT REPORT INDICATES THAT, AS OF SEPTEMBER 1976,
THERE WAS A NEED FOR CLOSER LABOR MONITORING IN THE PROPERTY DISPOSITION
BRANCH OF THE PHILADELPHIA AREA OFFICE. THE BID TABULATION SHEETS WERE
PROVIDED BY THE PROTESTER AS EVIDENCE SUPPORTING THE CHARGES MADE IN ITS
INITIAL PROTEST.
THE PROTESTER'S REQUEST FOR RECONSIDERATION, WHILE INTRODUCING SOME
NEW FACTS PREVIOUSLY UNKNOWN TO THIS OFFICE, HAS FAILED TO CLEARLY
DEMONSTRATE THAT THE DISMISSAL OF ITS PROTEST WAS BASED UPON EITHER
ERRORS OF FACT OR OF LAW. THIS FAILURE TO MEET THE STANDARD FOR
RECONSIDERATION MAKES IT UNNECESSARY TO FURTHER DISCUSS THE SIGNIFICANCE
OF THE PROTESTER'S NEWLY INTRODUCED EVIDENCE.
VISOR BUILDERS, INC. REQUEST FOR RECONSIDERATION, B-185605, JULY 22,
1976, 76-2 CPD 68.
ACCORDINGLY, OUR DECISION OF JUNE 6, 1977, IS AFFIRMED.
B-189691, NOV 1, 1977
HEADNOTES-UNAVAILABLE
REEMPLOYED ANNUITANT WAS ERRONEOUSLY OVERPAID BECAUSE OF AGENCY'S
ADMINISTRATIVE ERROR IN INCORRECTLY ESTIMATING THE AMOUNT OF ANNUITY
ALLOCABLE TO PERIOD OF EMPLOYMENT. EMPLOYEE WAS EMPLOYED AS CONSULTANT,
WORKED IRREGULAR NUMBER OF HOURS PER PAY PERIOD, AND PAYCHECKS RECEIVED
VARIED GREATLY IN AMOUNT. IN SUCH CIRCUMSTANCES REEMPLOYED ANNUITANT
WAS NOT PUT ON NOTICE THAT HE WAS BEING OVERPAID EVEN THOUGH STANDARD
FORMS 50 ISSUED UPON APPOINTMENT INDICATED SALARY WOULD BE REDUCED BY
APPROXIMATE ANNUITY ALLOCABLE TO PERIOD OF EMPLOYMENT. THEREFORE, CLAIM
FOR OVERPAYMENTS IS WAIVED UNDER AUTHORITY OF 5 U.S.C. 5584.
MAX R. WALTON - WAIVER OF OVERPAYMENTS OF PAY
MAX R. WALTON, A REEMPLOYED ANNUITANT, APPEALS THE DENIAL BY OUR
CLAIMS DIVISION OF HIS REQUEST FOR WAIVER OF A CLAIM AGAINST HIM BY THE
UNITED STATES FOR RECOVERY OF $1,312.30 IN ERRONEOUS SALARY PAYMENTS.
THE RECORD SHOWS THAT MR. WALTON RECEIVED A TEMPORARY APPOINTMENT AS
A REEMPLOYED ANNUITANT EFFECTIVE JULY 2, 1973 (NOT TO EXCEED SEPTEMBER
30, 1973), AS A MANPOWER RESOURCES PROGRAM MANAGER GRADE GS-15, AT A
SALARY OF $34,971.00 PER ANNUM, AT THE PICATINNY ARSENAL, DOVER, NEW
JERSEY. THIS APPOINTMENT WAS CONVERTED TO AN EXCEPTED
APPOINTMENT-INTERMITTENT EFFECTIVE SEPTEMBER 30, 1973 (NOT TO EXCEED
SEPTEMBER 29, 1974), AS CONSULTANT, AT $134.48 PER DIEM.
UNDER THE TERMS OF THE APPOINTMENT AN AMOUNT EQUAL TO HIS CIVIL
SERVICE COMMISSION RETIREMENT ANNUITY WAS TO HAVE BEEN DEDUCTED FROM HIS
SALARY. THE EMPLOYING AGENCY MADE AN ERRONEOUS ESTIMATE OF MR. WALTON'S
ANNUITY AND DEDUCTED THAT AMOUNT FROM HIS REEMPLOYMENT PAY. THEREFORE,
ERRONEOUS OVERPAYMENTS OF $1,312.30 WERE MADE TO THE EMPLOYEE FROM JULY
2, 1973, THROUGH APRIL 19, 1975. THE ERRONEOUS OVERPAYMENTS WERE
DISCOVERED ON APRIL 18, 1975, WHEN THE AGENCY RECEIVED VERIFICATION OF
MR. WALTON'S ANNUITY FROM THE CIVIL SERVICE COMMISSION. THE FINANCE AND
ACCOUNTING OFFICER AT THE PICATINNY ARSENAL INFORMED THE EMPLOYEE OF THE
ERRONEOUS PAYMENTS BY LETTER OF MAY 21, 1975.
THE UNITED STATES ARMY FINANCE AND ACCOUNTING CENTER DETERMINED THAT
MR. WALTON WAS AT LEAST PARTIALLY AT FAULT FOR NOT DISCOVERING THE
ERRONEOUS OVERPAYMENTS BECAUSE THE STANDARD FORMS 50 THAT WERE ISSUED TO
HIM INCIDENT TO HIS APPOINTMENTS, INDICATED THAT HIS SALARY WOULD BE
REDUCED BY THE APPROXIMATE ANNUITY ALLOCABLE TO THE PERIOD OF
EMPLOYMENT. THEREFORE, IN ITS ADMINISTRATIVE REPORT THE UNITED STATES
ARMY FINANCE AND ACCOUNTING CENTER RECOMMENDED THAT MR. WALTON'S REQUEST
FOR A WAIVER OF THE OVERPAYMENTS BE DENIED. OUR CLAIMS DIVISION
CONCURRED AND DENIED WAIVER OF THE OVERPAYMENTS OF SALARY ON MARCH 29,
1977.
THE COMPTROLLER GENERAL IS AUTHORIZED BY 5 U.S.C. 5584 TO WAIVE
CLAIMS FOR OVERPAYMENT OF PAY AND ALLOWANCES, OTHER THAN TRAVEL AND
TRANSPORTATION EXPENSES AND ALLOWANCES AND RELOCATION EXPENSES, IF
COLLECTION WOULD BE "AGAINST EQUITY AND GOOD CONSCIENCE AND NOT IN THE
BEST INTERESTS OF THE UNITED STATES." SUCH AUTHORITY MAY NOT BE
EXERCISED IF THERE IS "AN INDICATION OF FRAUD, MISREPRESENTATION, FAULT,
OR LACK OF GOOD FAITH ON THE PART OF THE EMPLOYEE OR ANY OTHER PERSON
HAVING AND INTEREST IN OBTAINING A WAIVER OF THE CLAIM." IMPLEMENTING
THE STATUTE, 4 C.F.R. 91.5(C) (1977), STATES IN PERTINENT PART THAT:
"*** ANY SIGNIFICATN UNEXPLAINED INCREASE IN PAY OR ALLOWANCES WHICH
WOULD REQUIRE A REASONABLE PERSON TO MAKE INQUIRY CONCERNING THE
CORRECTNESS OF HIS PAY OR ALLOWANCES, ORDINARILY WOULD PRECLUDE A WAIVER
WHEN THE EMPLOYEE OR MEMBER FAILS TO BRING THE MATTER TO THE ATTENTION
OF APPROPRIATE OFFICIALS. WAIVER OF OVERPAYMENTS OF PAY AND ALLOWANCES
UNDER THIS STANDARD NECESSARILY MUST DEPEND UPON THE FACTS AND
CIRCUMSTANCES EXISTING IN THE PARTIUCLAR CASE. ***"
WE HAVE HELD THAT THIS LANGUAGE APPLIES NOT ONLY TO UNEXPLAINED
INCREASES IN PAY, BUT ALSO TO RECEIPT OF AN INITIAL SALARY AT A RATE
HIGHER THAN EXPECTED AND TO CONTINUED RECEIPT OF THE SAME SALARY WHEN A
REDUCTION IS EXPECTED. MATTER OF WILLIAM WHITE, B-186562, MARCH 11,
1977.
THE QUESTIONS PRESENTED HER ARE WHETHER MR. WALTON KNEW OR SHOULD
HAVE KNOWN THAT THE DEPARTMENT OF THE ARMY HAD FAILED TO REDUCE HIS
SALARY BY THE CORRECT AMOUNT OF HIS ANNUITY AND WHETHER HE WAS PUT ON
NOTICE THAT HIS SALARY WAS NOT REDUCED BY THE CORRECT AMOUNT OF HIS
ANNUITY BY THE STATEMENTS IN THE STANDARD FORMS 50 THAT HIS SALARY WOULD
BE REDUCED BY THE APPROXIMATE ANNUITY ALLOCABLE TO THE PERIOD OF HIS
EMPLOYMENT.
THE SUBMISSIONS SHOW THAT THE OVERPAYMENTS IN QUESTION TOOKPLACE OVER
A 2-YEAR PERIOD AND WERE MADE IN A SERIES OF 34 PAYMENTS. SINCE MR.
WALTON WAS EMPLOYED AS A CONSULTANT. HE WORKED ON AN IRREGULAR BASIS
AND HIS PAYCHECKS VARIED CONSIDERABLY IN AMOUNT FROM PAY PERIOD TO PAY
PERIOD. THE GROSS PAY RECEIVED BY MR. WALTON FOR EACH BIWEEKLY PAY
PERIOD DURING THE PERIOD COVERED BY THE ERRONEOUS OVERPAYMENTS VARIED IN
AMOUNT FROM A LOW OF $99.72 TO A HIGH OF $873.60 AND THE ERRONEOUS
PAYMENTS DURING THIS PERIOD VERIOD IN AMOUNT FROM AN UNDERPAYMENT OF
$10.66 TO AN OVERPAYMENT OF $168.10. ACCORDINGLY, MR. WALTON WAS NOT
PUT ON NOTICE THAT HIS PAYCHECKS WERE INCORRECT BECAUSE THE AMOUNT
VARIED SO GREATLY WITH EACH PAYCHECK. THE SUBMISSIONS ALSO SHOW THAT
EVEN AFTER DEPARTMENT OF THE ARMY PERSONNEL DISCOVERED THAT AN ERROR
EXISTED AND HAD RECEIVED VERIFICATION OF MR. WALTON'S CORRECT ANNUITY
RATES FROM THE CIVIL SERVICE COMMISSION, THEY HAD DIFFICULTY IN
COMPUTING THE CORRECT AMOUNT OF COMPENSATION TO WHICH MR. WALTON WAS
ENTITLED AND THE ACTUAL AMOUNT OF THE NET OVERPAYMENTS. THIS IS
EVIDENCED BY THE FACT THAT THE FINANCE AND ACCOUNTING OFFICER FIRST
NOTIFIED MR. WALTON BY LETTER OF MARCH 26, 1975, THAT HE HAD BEEN
OVERPAID IN THE AMOUNT OF $620.07, AND LATER, BY LETTER OF MAY 21,1975,
HE NOTIFIED MR. WALTON THAT THE OVERPAYMENTS HAD BEEN RECOMPUTED AT
$1,312.30. WE DO NOT BELIEVE THAT MR. WALTON KNEW OR SHOULD HAVE KNOWN
THAT HE WAS BEING OVERPAID MERELY BECAUSE OF STATEMENTS IN THE STANDARD
FORMS 50 THAT HIS SALARY WOULD BE REDUCED BY THE AMOUNT OF THE
APPROXIMATE ANNUITY ALLOCABLE TO THE PERIOD OF EMPLOYMENT, ESPECIALLY
SINCE HIS SALARY HAD BEEN REDUCED BY THE DEPARTMENT OF THE ARMY'S
ESTIMATE OF THE AMOUNT OF HIS ANNUITY ALLOCABLE TO THE PERIOD COVERED.
CONSIDERING THE ABOVE CIRCUMSTANCES, WE DO NOT BELIEVE THAT THE
RECORD ESTABLISHES CONSTRUCTIVE KNOWLEDGE SUFFICIENT TO INDICATE FRAUD,
MISREPRESENTATION, FAULT, OR LACK OF GOOD FAITH ON MR. WALTON'S PART.
IN VIEW OF THIS AND SINCE THE OVERPAYMENTS OF PAY RESULTED FROM
ADMINISTRATIVE ERROR, THE INDEBTEDNESS OF $1,312.30 IS HEREBY WAIVED
UNDER THE AUTHORITY OF 5 U.S.C. 5584.
B-190053, NOV 1, 1977
HEADNOTES UNAVAILABLE
QUESTION OF SMALL BUSINESS CONCERN'S RESPONSIBILITY IS NOT FOR
CONSIDERATION BY GAO BECAUSE CONCLUSIVE AUTHORITY OVER QUESTION IS
VESTED BY STATUTE IN SBA. MOREOVER, IT WAS POSSIBLE FOR PROTESTER TO
RAISE ITS OBJECTIONS WITH SBA IN COURSE OF CERTIFICATE OF COMPETENCY
PROCEEDING.
IKARD MANUFACTURING CO. (IKARD) HAS PROTESTED THE DEPARTMENT OF THE
ARMY'S REJECTION OF ITS FIRM AS NONRESPONSIBLE UNDER INVITATION FOR BIDS
NO. DAAH01-77-B-0317.
THE ARMY HAS ADVISED THIS OFFICE THAT THE CONTRACTING OFFICER FOUND
IKARD NONRESPONSIBLE BASED ON A NEGATIVE PRE-AWARD SURVEY AND THE MATTER
WAS REFERRED TO THE SMALL BUSINESS ADMINISTRATION (SBA) FOR THE POSSIBLE
ISSUANCE OF A CERTIFICATE OF COMPETENCY (COC) AS REQUIRED BY ARMED
SERVICES PROCUREMENT REGULATION SEC. 1-705.4(C) (1976 ED.) BECAUSE THE
FIRM HAD CERTIFIED ITSELF AS A SMALL BUSINESS CONCERN. BY LETTER DATED
SEPTEMBER 20, 1977, THE SBA DECLINED TO ISSUE A COC.
UNDER 15 U.S.C. SEC. 637(B)(7) (1970), AS AMENDED BY PUB.L. NO.
95-89, SEC. 501, 91 STAT. 553, THE SBA HAS AUTHORITY TO CONCLUSIVELY
DETERMINE ALL ELEMENTS OF RESPONSIBILITY. OUR OFFICE DOES NOT REVIEW
SBA DETERMINATIONS OR REQUIRE THE SBA TO ISSUE A COC EVEN IF WE DISAGREE
WITH SBA'S JUDGMENT BECAUSE, BY LAW, ISSUANCE OF A COC BY SBA IS
CONCLUSIVE ON PROCURING OFFICERS. ENVIRONMENTAL TECTONICS CORPORATION,
B-185259, FEBRUARY 13, 1976, 76-1 CPD 101.
MOREOVER, WE NOTE THAT IT WAS POSSIBLE FOR IKARD TO RAISE ITS
OBJECTIONS WITH SBA IN THE COURSE OF THE COC PROCEEDING.
ACCORDINGLY, THE PROTEST IS DISMISSED.
B-190166, B-190195, NOV 1, 1977
HEADNOTES-UNAVAILABLE
1. POSSIBILITY OF "BUY-IN" UNDER RESOLICITATION, ALLEGEDLY MADE
POSSIBLE BY DISCLOSURE OF PRICES IN CONNECTION WITH GAO DECISION
INVOLVING CANCELLATION OF INITIAL SOLICITATION, IS NOT PROPER BASIS TO
CHALLENGE VALIDITY OF PROPOSED AWARD.
2. OUR OFFICE DETERMINED THAT CANCELLATION OF RFP BECAUSE OF
WITHDRAWAL OF FUNDS WAS PROPER, AND THEREFORE DENIED CLAIM FOR PROPOSAL
PREPARATION COSTS. WHERE ONLY EVIDENCE PRESENTED IN REARGUMENT THAT
CANCELLATION WAS IMPROPER, AND RENEWAL OF CLAIM UNDER CANCELED RFP IS
THAT FIRM IS BEING UNDERBID IN RESOLICITATION BY ALLEGED "BUY-IN," PRIOR
DECISION IS AFFIRMED.
A.R.F. PRODUCTS, INC.
A.R.F. PRODUCTS, INC. (ARF), PROTESTS THE PROPOSED AWARD BY THE NAVAL
AVIONICS FACILITY, INDIANAPOLIS, INDIANA (AVIONICS), OF A CONTRACT TO
ITT, THE LOW BIDDER UNDER INVITATION FOR BIDS (IFB) NO.
N00163-77-B-1307, A RESOLICITATION FOR ELECTRONICALLY TUNED DIGITAL
RECEIVERS.
THE INITIAL SOLICITATION (REQUEST FOR PROPOSALS (RFP) NO.
N00163-76-R- 0282) FOR THE ITEMS HAD BEEN CANCELED AFTER THE WITHDRAWAL
OF FUNDS FOR THE PROJECT FOR WHICH THE ITEMS WERE REQUIRED.
IN OUR DECISION IN A.R.F. PRODUCTS, INC., 56 COMP. GEN. 201 (1976),
76-2 CPD 541, WE CONSIDERED A CLAIM BY ARF FOR PROPOSAL PREPARATION
COSTS INCURRED IN CONNECTION WITH THE INITIAL SOLICITATION, UNDER WHICH
ARF HAD BEEN IN LINE FOR AWARD ON THE BASIS OF ITS LOW OFFERED PRICE OF
$359,349. ITT HAD BEEN NEXT LOW AT $367,502. ARF ARGUED THAT THE
WITHDRAWAL OF FUNDING AND THE CANCELLATION WERE MATIVATED BY THE DESIRE
TO PRECLUDE IT FROM RECEIVING THE CONTRACT AWARD. WE DENIED THE CLAIM
AFTER CONCLUDING THAT THE CANCELLATION WAS NOT ARBITRARY OR CAPRICIOUS,
BUT RATHER RESULTED FROM A COMPELLING REASON.
IN ITS PRESENT PROTEST, ARF CONTENDS:
"*** ITT HAS BID ON THE CURRENT PROCUREMENT AT A PRICE WHICH IS UNDER
COST AND THAT THEY ARE 'BUYING IN' TO A SIGNIFICANT DEGREE. *** ITT HAS
TAKEN FULL ADVANTAGE OF THE EXPOSURE OF THE AMOUNT OF A.R.F.'S PREVIOUS
OFFER."
ARF ARGUES THAT ITT'S BID UNDER THE RESOLICITATION SHOULD THEREFORE
BE REJECTED "AS IN CONTRAVENTION OF THE ASPR SEC. 1-311 POLICY WHICH
DISCOURAGES 'BUYING IN.'" ARF STATES THAT THE PROPOSED CONTRACT APPEARS
TO BE THE INITIAL PHASE OF A LARGER PROGRAM, AND SUGGESTS THAT ITT'S
ALLEGED BUY-IN "WILL OBVIOUSLY RESULT IN THE GOVERNMENT PAYING MORE FOR
FOLLOW ON PROCUREMENTS AND FOR SUBSEQUENT CHANGES AS ITT SEEKS TO RECOUP
ITS LOSS." IN ADDITION, ARF RESTATES THE POSITION WE REJECTED IN A.R.F.
PRODUCTS, INC., SUPRA, THAT THE CANCELLATION OF THE INITIAL SOLICITATION
WAS IMPROPER, AND REITERATES ITS CLAIM FOR PROPOSAL PREPARATION COSTS
UNDER THAT RFP.
ALTHOUGH ARMED SERVICES PROCUREMENT REGULATION (ASPR) SEC. 1-311
(1976 ED.) DOES DISCOURAGE "BUYING IN," IT DOES NOT PRECLUDE THE
GOVERNMENT'S ACCEPTANCE OF A BELOW-COST BID. SEE ALLIED TECHNOLOGY,
INC., B-185866, JULY 12, 1976, 76-2 CPD 34. THUS, THE FACT THAT A LOW
BIDDER MAY INCUR A LOSS AT ITS BID PRICE DOES NOT JUSTIFY REJECTING AN
OTHERWISE ACCEPTABLE BID. INTER-CON SECURITY SYSTEMS, INC., B-189165,
JUNE 15, 1977, 77-1 CPD 134. HOWEVER, THE REGULATION DOES CAUTION
CONTRACTING OFFICERS TO ASSURE THAT AMOUNTS EXCLUDED IN THE BUYING-IN
CONTRACT ARE NOT RECOUPED THROUGH CHANGE ORDERS OR FOLLOW-ON CONTRACTS.
THERE IS NO REASON TO QUESTION WHETHER AVIONICS WILL FULFILL ITS
RESPONSIBILITY IN THAT REGARD.
FURTHERMORE, TO PROPERLY REJECT A BID AS BEING EXTREMELY LOW WOULD
REQUIRE A DETERMINATION THAT THE BIDDER IS NONRESPONSIBLE. SEE
FUTRONICS INDUSTRIES, INC., B-185896, MARCH 10, 1976, 76-1 CPD 169.
AWARD TO ITT HERE WOULD NECESSARILY INVOLVE AN AFFIRMATIVE
DETERMINATION BY THE CONTRACTING OFFICIALS OF ITT'S RESPONSIBILITY. OUR
OFFICE DOES NOT CONSIDER PROTESTS CONCERNING DETERMINATIONS THAT
PARTICULAR PROSPECTIVE CONTRACTORS ARE RESPONSIBLE, UNLESS EITHER FRAUD
IS SHOWN ON THE PART OF PROCURING OFFICIALS OR THE SOLICITATION CONTAINS
DEFINITIVE RESPONISIBLITY CRITERIA WHICH ALLEGEDLY HAVE NOT BEEN MET.
CENTRAL METAL PRODUCTS, INC., 54 COMP. GEN. 66 (1974), 74-2 CPD 64.
NEITHER EXCEPTION IS INVOLVED HERE, AND THE PROTEST ON THAT ISSUE IS
THEREFORE DENIED.
IN REGARD TO ARF'S ARGUMENT THAT ITT'S ALLEGED BUY-IN WAS IMPROPERLY
MADE POSSIBLE BY THE DISCLOSURE OF ARF'S PRICE IN CONNECTION WITH OUR
DECISION IN A.R.F. PRODUCTS, INC., SUPRA, WE POINT OUT THAT PRICES WERE
DISCLOSED ONLY AFTER FUNDS FOR THE PROCUREMENT IN ISSUE WERE WITHDRAWN
AND THE RFP PROPERLY CANCELED. MOREOVER, SINCE ITT'S PRICE, AS WELL AS
ARF'S, WAS MADE PUBLIC, WE CANNOT SEE HOW THOSE FIRMS CAN BE CONSIDERED
TO HAVE BEEN COMPETING ON OTHER THAN AN EQUAL BASIS ON THE
RESOLICITATION.
THE ONLY NEW EVIDENCE SUBMITTED BY ARF IS SUPPORT OF ITS REARGUMENT
THAT CANCELLATION OF THE INITIAL RFP WAS IMPROPER, AND THE RENEWAL OF
ITS CLAIM FOR PROPOSAL PREPARATION COSTS INCURRED THEREUNDER, IS THAT IT
WAS UNDERBID BY ITT'S ALLEGED BUY-IN UNDER THE PRESENT IFB, WHICH IT
CONTENDS WAS PREDICTABLE IF THE CANCELLATION WERE TO STAND. HOWEVER,
SINCE WE PREVIOUSLY DETERMINED THAT THE CANCELLATION WAS PROPERLY BASED
ON A LEGITIMATE REPROGRAMMING AND WITHDRAWAL OF FUNDS AND WAS NOT THE
RESULT OF ANY ARBITRARY OR CAPRICIOUS ACTION TOWARDS ARF BY THE
CONTRACTING AGENCY, AND IN VIEW OF OUR DISCUSSION ABOVE, WE SEE NO BASIS
TO MODIFY OUR DECISION IN ARF PRODUCTS, INC., SUPRA.
B-190377, NOV 1, 1977
HEADNOTES-UNAVAILABLE
GENERAL ACCOUNTING OFFICE WILL NOT CONSIDER PROTESTER'S ALLEGATION OF
COLLUSIVE BIDDING PRACTICES, SINCE JURISDICTION IN SUCH MATTERS IS
COMMITTED EXCLUSIVELY TO ATTORNEY GENERAL AND FEDERAL COURTS.
KAUFMANN-DEDELL PRINTING, INC., HAS PROTESTED TO OUR OFFICE THE
POSSIBILITY OF COLLUSIVE BIDDING BY TWO FIRMS UNDER INVITATION FOR BIDS
NO. 263-77-B(86)-3140CC, ISSUED BY THE DEPARTMENT OF HEALTH, EDUCATION,
AND WELFARE.
FEDERAL PROCUREMENT REGULATIONS SEC. 1-1.901 (1964 ED. CIRC. 1)
GOVERNS THE REPORTING OF POSSIBLE ANTI-TRUST VIOLATIONS. WE HAVE HELD
THAT THIS SECTION REQUIRES THAT EVIDENCE OF COLLUSIVE BIDDING IN
ADVERTISED PROCUREMENTS SHOULD BE REFERRED TO THE ATTORNEY GENERAL BY
THE PROCURING AGENCY. IT IS NOT WITHIN OUR JURISDICTION TO DETERMINE
WHAT CONSTITUTES A VIOLATION OF A CRIMINAL STATUTE, BUT WITHIN THE
JURISDICTION OF THE ATTORNEY GENERAL AND THE FEDERAL COURTS. ARCON
CONSTRUCTION AND ENGINEERING COMPANY, B-185859, MARCH 31, 1976, 76-1 CPD
213.
ACCORDINGLY, THE PROTEST IS DISMISSED.
B-190404, NOV 1, 1977
HEADNOTES-UNAVAILABLE
PROTEST FILED AFTER BID OPENING AGAINST ALLEGED SOLICITATION
IMPROPRIETY WHICH SHOULD HAVE BEEN APPARENT PRIOR TO BID OPENING IS
UNTIMELY UNDER SECTION 20.2(B)(1) OF GAO'S BID PROTEST PROCEDURES AND IS
DISMISSED.
CHEMICAL TECHNOLOGY, INC.
CHEMICAL TECHNOLOGY, INC. (CTI) PROTESTS ANY AWARD UNDER SOLICITATION
NO. F65503-77-09161, MESS ATTENDANT SERVICES, ISSUED BY THE AIR FORCE,
EIELSON AIR FORCE BASE, ALASKA.
CTI CONTENDS THAT THE CONTRACTING OFFICER DENIED IT THE OPPORTUNITY
OF SUBMITTING A BID BY ERRONEOUSLY STATING BOND REQUIREMENTS UNDER THE
SOLICITATION. CTI STATES THAT "THE SOLICITATION PROVISIONS WERE DRAFTED
IN SUCH A MANNER AS TO LIMIT THE RESPONSE AND THEREBY RESTRICT
COMPETITION" AND THAT THE CONTRACTING OFFICER FAILED TO FOLLOW PUBLISHED
POLICY AND PROCEDURES IN ARMED FORCES PROCUREMENT REGULATIONS, SECTION
10, PART 1 COVERING BID AND PERFORMANCE BONDS.
ALTHOUGH THE PROTESTER HAS NOT STATED ITS PRECISE OBJECTION WITH
SUFFICIENT DETAIL, THE PROTEST RELATES GENERALLY TO THE ALLEGED
RESTRICTIVE NATURE OF THE BOND REQUIREMENT STATED IN THE SOLICITATION.
WE UNDERSTAND FROM THE AIR FORCE THAT THE PROTESTER DID NOT OBJECT AT
ANY TIME PRIOR TO BID OPENING TO THE SOLICITATION. UNDER OUR BID
PROTEST PROCEDURES, 4 C.F.R. SEC. 20.2(B)(1) (1977), A PROTEST BASED
UPON AN ALLEGED IMPROPRIETY IN A SOLICITATION WHICH IS APPARENT PRIOR TO
BID OPENING OR THE CLOSING DATE FOR RECEIPT OF INITIAL PROPOSALS MUST BE
FILED PRIOR TO THE APPLICABLE DEADLINE IN ORDER TO BE CONSIDERED BY OUR
OFFICE. MICROSURANCE, INC., B-188830, APRIL 28, 1977, 77-1 CPD 292.
SINCE IN THIS CASE, THE OBJECTION APPEARS TO RELATE TO THE SOLICITATION
AS ISSUED AND WAS NOT RAISED EITHER WITH THE AGENCY OR THIS OFFICE PRIOR
TO SEPTEMBER 16, 1977, THE DATE OF THE BID OPENING, IT IS UNTIMELY FILED
AND WILL NOT BE CONSIDERED ON ITS MERITS.
ACCORDINGLY, THE PROTEST IS DISMISSED.
B-188072, NOV 28 1977
HEADNOTES-UNAVAILABLE
CARRIER'S CLAIM FOR AMOUNT ADMINISTRATIVELY DEDUCTED FROM IT FOR AN
OVERCHARGE IS DISALLOWED WHERE THERE IS SUBSTANTIAL COMPLIANCE WITH
TARIFF ITEM SO THAT RATES MAY BE APPLIED AND WHERE CARRIER HAD KNOWLEDGE
OF APPLICATION OF SPECIAL RATE.
NAVAJO FREIGHT LINES, INC:
NAVAJO FREIGHT LINES, INC. (NAVAJO), UNDER ITS CLAIM NO. 52059,
REQUESTS A REVIEW OF A FINAL SETTLEMENT AND SUBSEQUENT DEDUCTION ACTION
IN THE AMOUNT OF $415.80 TAKEN BY THE GENERAL SERVICES ADMINISTRATION
(GSA) ON SEPTEMBER 9, 1976. THE REVIEW OF SETTLEMENT IS BEING MADE BY
THIS OFFICE UNDER THE PROVISIONS OF 49 U.S.C. 66(B) (SUPP. V, 1975), AND
4 C.F.R. 53.3 (!977).
THE RECORD SHOWS THAT NAVAJO PICKED UP A SHIPMENT ON SEPTEMBER 26,
1973, OF 100 CYLINDERS DESCRIBED ON GOVERNMENT BILL OF LADING (GBL)
H-4766092 AS, "CYLINDERS HELIUM EMPTY FOR SHIPPING AIR, GAS, OR LIQUID
STEEL NOI OLD USED." THE SHIPMENT WAS PICKED UP AT THE JET PROPULSION
LAB, PASADENA, CALIFORNIA, AND WAS CONSIGNED TO THE BUREAU OF MINES,
SONCY, TEXAS.
NAVAJO BILLED AND WAS PAID FREIGHT CHARGES OF $900.24, BASED ON A
RATE OF $6.82 PER HUNDRED POUNDS, APPLIED TO THE ACTUAL WEIGHT OF THE
SHIPMENT. GSA DETERMINED IN ITS AUDIT OF TRANSPORTATION CHARGES THAT A
LOWER RATE OF $3.67 PER HUNDREDWEIGHT WAS AVAILABLE AND PUBLISHED IN
ITEM NO. 4370 OF TARIFF NO. 26-B, MF-ICC 155, PUBLISHED BY THE ROCKY
MOUNTAIN MOTOR TARIFF BUREAU, INC. (LATER REDESIGNATED AS ICC RMB 226).
ITEM NO. 4370, ENTITLED "CARRIERS, SECOND HAND, EMPTY, RETURNED," STATES
IN PART:
"NOTE 1-EXCEPT AS OTHERWISE PROVIDED IN NOTE 2 (NOT GERMANE), RATES
APPLY ONLY WHEN THE IMMEDIATE PRECEDING TRANSPORTATION OF THE FILLED
CONTAINERS TO THE SHIPPING POINT OF THE EMPTY CONTAINERS WAS MADE BY THE
IDENTICAL CARRIER OR CARRIERS TRANSPORTING THE EMPTY CONTAINERS AND TO
WHICH FACT THE SHIPPER HAS CERTIFIED ON THE BILL OF LADING AT THE TIME
OF SHIPMENT."
NAVAJO CONTENDS THAT ITEM NO. 4370 DOES NOT APPLY IN THIS CASE
BECAUSE THE SHIPPER'S ANNOTATION ON GBL H-4766092 IS MEANINGLESS AS IT
IS STATED. WE DO NOT AGREE. THE GBL IS ANNOTATED AS FOLLOWS: "THIS
SHIPMENT OF EMPTY CYLINDERS IS MADE UPON RECEIPT THIS DATE OF 100 FILLED
HELIUM CYLINDERS FROM CONSIGNEE SHOWN ABOVE." THE CONSIGNEE ON GBL
H-4766092 IS THE BUREAU OF MINES AMARILLO HELIUM PLANT, SONCY, TEXAS.
THUS, THE ANNOTATION MAKES THE CARRIER AWARE THAT THE COMMODITY IS THE
SAME AS THAT PRESCRIBED IN ITEM NO. 4370.
FURTHER, A SHIPMENT OF FILLED CYLINDERS WAS TRANSPORTED BY NAVAJO AND
RECEIVED THE SAME DATE, AND FROM THE SAME SHIPPER (NOW THE CONSIGNEE,
THE BUREAU OF MINES AMARILLO HELIUM PLANT, SONCY, TEXAS) ON GBL
H-4765974. AND THE TARIFF ITEM DOES NOT PRESCRIBE SPECIFIC WORDING OR
EXPRESS LANGUAGE TO BE CERTIFIED ON THE BILL OF LADING. THUS, THERE IS
SUBSTANTIAL COMPLIANCE WITH THE TARIFF ITEM SO THAT THE RATES CONTAINED
THEREIN MAY BE APPLIED. STRICKLAND TRANSPORTATION COMPANY V. UNITED
STATES, 334 F.2D 172, 179 (5TH CIR. 1964); CAMPBELL "66" EXPRESS, INC.
V. UNITED STATES, 302 F.2D 270, 272 (CT. CL. 1962).
IT IS OUR VIEW, THAT WHEN, AS IS THE CASE HERE, THERE APPEARS ON THE
BILL OF LADING SOME WRITTEN NOTATION (CERTIFICATION), WHICH REASONABLY
APPRISES THE CARRIER THAT THE CYLINDERS TENDERED ARE BEING RETURNED IN
CONNECTION WITH THE IMMEDIATE TRANSPORTATION PERFORMED BY THAT SAME
CARRIER, THAT THIS IS SUFFICIENT COMPLIANCE WITH THE TARIFF TO MAKE THE
RATES IN ITEM 4370 APPLICABLE.
PROVISIONS OF TARIFFS FILED WITH THE INTERSTATE COMMERCE COMMISSION
AS PUBLISHED ARE BINDING UPON BOTH THE SHIPPER AND THE CARRIER AS A
MATTER OF LAW, BUT THEY ARE NOT TO BE READ OR APPLIED IN A MANNER WHICH
WOULD LEAD TO AN UNJUST OR ABSURD CONCLUSION. GLICKFELD V. HOWARD VAN
LINES, 213 F.2D 723 (9TH CIR. 1954). THE ONLY FACT THAT SEEMS TO BE
MISSING IN THE ANNOTATION ON GBL H-4766092 IS THE NAME OF THE CARRIER,
HOWEVER, THE EVIDENCE INDICATES THAT NAVAJO WAS AWARE OF THE INBOUND
SHIPMENT, AND THE PROPER TARIFF APPLICATION. THE SHIPMENT WAS TENDERED
TO NAVAJO, AND NAVAJO ISSUED THE BILL OF LADING UNDER THE PROVISIONS OF
49 U.S.C. 20(11) (1970). THE GBL ALSO REFERS TO "RM 226," THE
REDESIGNATED RATE TARIFF AS ITS RATE AUTHORITY, AND ITEM NO. 4370 IS IN
THAT TARIFF.
THE ANNOTATION ITSELF INDICATES THAT AN INBOUND SHIPMENT WAS RECEIVED
AND IT CAN BE IMPLIED THAT THE SUBSEQUENT TENDER OF THE SHIPMENT TO
NAVAJO WAS A TENDER TO THE SAME CARRIER FOR THE PURPOSE OF OBTAINING THE
SPECIAL RATE. THUS, NAVAJO HAD KNOWLEDGE OF THIS FACT. SEE UNION
PACIFIC R.R. V. UNITED STATES, 172 F. SUPP. 668 (CT.CL.1959), IN WHICH
THE COURT HELD THAT WHERE AN EXPORT RATE WAS MADE AVAILABLE TO THE
GOVERNMENT FOR SHIPMENTS DESTINED FOR EXPORT UNDER AN AGREEMENT
REQUIRING AN AUTHORIZED GOVERNMENT REPRESENTATIVE TO FURNISH THE CARRIER
A CERTIFICATE OF EXPORT, AND THE CARRIER KNEW THAT THE SHIPMENTS WERE
GOING INTO EXPORT AND THEY ACTUALLY WENT INTO EXPORT, THE CARRIER WAS
NOT ENTITLED, UPON THE FAILURE OF THE GOVERNMENT TO FURNISH THE
CERTIFICATE, TO RECOVER THE DIFFERENCE BETWEEN THE DOMESTIC RATE AND THE
EXPORT RATE.
ACCORDINGLY, THE CLAIM OF NAVAJO FOR $415.80 IS DISALLOWED.
B-188089, OCTOBER 31, 1977
HEADNOTES - UNAVAILABLE
TWO FORMER EMPLOYEES OF AGENCY FOR INTERNATIONAL DEVELOPMENT
PERFORMED "VOLUNTARY OVERTIME" WORK IN ACCORDANCE WITH DUTY ROSTERS
ISSUED BY OFFICIAL WITH COMPETENT AUTHORITY TO ORDER OR APPROVE
OVERTIME, AND WERE RESPONSIBLE FOR OBTAINING REPLACEMENTS IF UNABLE TO
WORK AS SCHEDULED. IN VIEW OF THESE CIRCUMSTANCES AND SINCE OVERTIME
WAS REQUIRED BY VERY NATURE AND VOLUME OF WORK ASSIGNED AND SINCE
NONPERFORMANCE OF SUCH WORK COULD AFFECT THEIR PERFORMANCE RATINGS,
OVERTIME WAS, IN EFFECT, ORDERED AND EMPLOYEES ARE ENTITLED TO PAYMENT
OF OVERTIME COMPENSATION UNDER 5 U.S.C. 5542 (SUPP. II, 1972).
DONALD E. BORDENKIRCHER AND CHESTER C. JEW - OVERTIME COMPENSATION:
THIS DECISION IS IN RESPONSE TO A LETTER DATED DECEMBER 21, 1976,
WITH ENCLOSURES, FROM MR. I. R. LUDACER, ASSISTANT GENERAL COUNSEL FOR
ENFORCEMENT, AGENCY FOR INTERNATIONAL DEVELOPMENT (AID), DEPARTMENT OF
STATE, IN WHICH HE SEEKS GUIDANCE WITH RESPECT TO THE CLAIMS FOR
OVERTIME COMPENSATION BY MESSRS. DONALD E. BORDENKIRCHER AND CHESTER C.
JEW, FORMER AID EMPLOYEES OF THE OFFICE OF PUBLIC SAFETY (OPS).
THE RECORD DISCLOSES THAT MESSRS. BORDENKIRCHER AND JEW AND ABOUT 76
OTHER EMPLOYEES WERE EMPLOYED AS DUTY OFFICERS BY THE TRAINING DIVISION
(TD), INTERNATIONAL POLICE ACADEMY, AID, IN WASHINGTON, D.C. MR.
BORDENKIRCHER'S CLAIM FOR 664 HOURS OF OVERTIME PAY FOR SERVICES
PERFORMED BY HIM OUTSIDE OF NORMAL WORKING HOURS ALLEGEDLY OCCURRED ON
VARIOUS DATES WITHIN THE PERIOD FEBRUARY 7, 1971, TO JULY 21, 1973. THE
PERIOD DURING WHICH MR. JEW'S CLAIM AROSE WAS FROM JULY 11, 1971, TO
SEPTEMBER 20, 1974, AND THE CLAIMED OVERTIME WORKED TOTALS 629 HOURS.
THE CLAIMANTS CONTEND THAT THE OVERTIME DUTY IN QUESTION WAS
PERFORMED BY THEM UNDER SPECIFIC INSTRUCTIONS FROM THEIR OFFICIAL
SUPERVISORS AND IN ACCORDANCE WITH ESTABLISHED ADMINISTRATIVE
PROCEDURES, AND IN NO SENSE WAS SUCH OVERTIME DUTY PERFORMED ON A
VOLUNTARY BASIS. IN SUPPORT OF THEIR CONTENTIONS THEY HAVE SUBMITTED
COPIES OF DUTY ROSTERS DATED SEPTEMBER 13 AND NOVEMBER 24, 1972, AND
FEBRUARY 14, AND JULY 9, 1973, ISSUED IN MEMORANDUM FORM TO THE AFFECTED
DUTY OFFICERS BY MR. JOHN A LINDQUIST, THEN CHIEF, TD, OPS. THE SUBJECT
OF THE MEMORANDA WAS "SECURITY DUTY SCHEDULE OPS/TD PROFESSIONAL STAFF."
THE INITIAL PARAGRAPH IN EACH MEMORANDUM STATES THE FOLLOWING:
"IT IS THE RESPONSIBILITY OF EACH OFFICER NAMED BELOW TO PERFORM
SECURITY DUTY AS SCHEDULED OR TO MAKE SUITABLE ARRANGEMENTS FOR HIS
SUBSTITUTE AND SO NOTIFY ADMINISTRATIVE SERVICES BRANCH. THIS SCHEDULE
IS TO BE ISSUED QUARTERLY, WITH REVISIONS AS NECESSARY."
THE NAME OF MR. BORDENKIRCHER APPEARS ON TWO OF THE AFOREMENTIONED
MEMORANDA, AND MR. JEW'S NAME APPEARS ON THREE OF THEM.
A COPY OF AN ADDITIONAL OFFICIAL AID DOCUMENT DATED APRIL 18, 1973,
ENTITLED "STAFF NOTICE NO. 54," SUBJECT: "TRAINING DIVISION DUTY
PERSONNEL," SIGNED BY MR. LINDQUIST, STATES IN PERTINENT PART THAT ITS
PURPOSE IS TO DEFINE AND DISCUSS THE DUTIES OF THREE DIFFERENT
ASSIGNMENTS WHICH PROVIDE COVERAGE OUTSIDE NORMAL DUTY HOURS WITHIN THE
TD, NAMELY, THE DIVISION DUTY OFFICER, THE SECURITY DUTY OFFICER, AND
THE DUTY SECRETARY. THE CLAIMANTS PERFORMED THE DUTIES OF THE DIVISION
DUTY OFFICER AND THE SECURITY DUTY OFFICER. WITH RESPECT TO THE
DIVISION DUTY OFFICER AND THE SECURITY DUTY OFFICER, THE STAFF NOTICE
STATED THAT ROSTER ASSIGNMENTS WOULD BE ESTABLISHED BY THE OFFICE OF THE
DIVISION SHIEF AND THE CHIEF, ADMINISTRATIVE SERVICES SECTION
RESPECTIVELY. IT WAS STATED IN REGARD TO SECURITY DUTY OFFICERS THAT:
"ANY OFFICER UNABLE TO PERFORM HIS ASSIGNED DUTY IS RESPONSIBLE FOR
OBTAINING A REPLACEMENT AND NOTIFYING THE CHIEF, ADMINISTRATIVE
SERVICES, 48 HOURS IN ADVANCE IN WRITING OF THE CHANGE ON A ROUTER
SLIP."
THE CLAIMANTS ALSO POINT OUT THAT STAFF NOTICE NO. 54 SHOWS (1) THAT
THE DUTY OFFICER ASSIGNMENTS WERE NOT ON AN IRREGULAR OR OCCASIONAL
BASIS BUT WERE FIRMLY SCHEDULED IN ADVANCE BY DATE AND WORKING DUTY
TIME, AND (2) THAT EACH DUTY OFFICER HAD SPECIFIC REGULAR DUTIES FOR
EACH ASSIGNMENT.
IN ITS REQUEST FOR A DETERMINATION BY THIS OFFICE IN THE MATTER, THE
AGENCY STATES AS FOLLOWS:
"MR. JOHN LINDQUIST, WHO WAS THE CHIEF OF THE TRAINING DIVISION OF
THE PUBLIC SAFETY OFFICE DURING THE RELEVANT PERIOD OF TIME HAS
INDICATED THAT WHEN HE ASSUMED HIS JOB IN 1968 THE PREVAILING PRACTICE
AMONG HIS STAFF WAS TO PERFORM THESE OVERTIME SERVICES ON A VOLUNTARY
BASIS AND THAT HE MERELY CONTINUED THE EXISTING PRACTICE. HE DENIES
THAT ANYONE WAS COERCED INTO PERFORMING THESE SERVICES IN ANY WAY AND IT
WAS UNDERSTOOD THAT THE SERVICES WERE ENTIRELY VOLUNTARY."
MR. BORDENKIRCHER STATES THAT EVEN THOUGH THE OVERTIME WORK IN
QUESTION HAS BEEN STIPULATED BY THE AGENCY AS BEING VOLUNTARY, IT WAS
STATED TO HIM AND HIS PROFESSIONAL COLLEAGUES VERBALLY THAT FAILURE TO
WORK "VOLUNTARY" OVERTIME WOULD RESULT IN THEIR RECEIVING A POOR
PERFORMANCE REPORT AND SUBSEQUENT DISMISSAL. IN THIS REGARD, THE FILE
DOES NOT CONTAIN HIS PERFORMANCE EVALUATION REPORT. HOWEVER, THE FILE
CONTAINS SUCH REPORTS FOR MR. JEW. IN THE NARRATIVE COMMENTS IN THE
PERFORMANCE EVALUATION REPORT FOR MR. JEW FOR THE PERIOD JULY 11 THROUGH
DECEMBER 31, 1971, IT IS STATED:
"THE RATED OFFICER IS HARDWORKING AND DEDICATED, AS INDICATED BY HIS
CONTRIBUTION OF 144 HOURS OF VOLUNTARY OVERTIME SINCE JULY OF
RATINGPERIOD, MUST OF THIS TIME BEING ON SATURDAYS. HE ONLY TOOK 16
HOURS OF ANNUAL LEAVE AND 8 HOURS SICK LEAVE."
IN HIS PERFORMANCE EVALUATION REPORT FOR THE PERIOD JANUARY 1 THROUGH
DECEMBER 31, 1972, IT IS STATED AS FOLLOWS:
"MR. JEW HAS GIVEN 260 HOURS OF VOLUNTARY UNCOMPENSATED OVERTIME
DURING THIS REPORTING PERIOD."
ALSO INCLUDED IN THE EVIDENCE OF RECORD IS A COPY OF A DRAFT
MEMORANDUM DATED JANUARY 1, 1973, FROM MR. LINDQUIST TO MR. BYRON ENGLE,
DIRECTOR, OPS, ENTITLED "REPORT OF OVERTIME AND FORFEITED ANNUAL LEAVE
FOR CALENDAR YEAR 1972." THE DRAFT MEMORANDUM STATES IN PERTINENT PART
AS FOLLOWS:
"1. FORWARDED HEREWITH IS A REPORT OF OVERTIME AND ANNUAL LEAVE
FORFEITED BY ALL PERSONNEL PERFORMING DUTIES WITH THE TRAINING DIVISION
DURING CALENDAR YEAR 1972.
TOTAL NUMBER PERSONNEL THIS REPORT . . . . . . . . . . 78
TOTAL HOURS VOLUNTARY OVERTIME . . . . . . . . . . 13,858
TOTAL HOURS PAID OVERTIME. . . . . . . . . . . . . 2,881
TOTAL HOURS ANNUAL LEAVE FORFEITED . . . . . . . . 1,449
"2. THE TRAINING DIVISION'S PROFESSIONAL STAFF WORKED A TOTAL OF
13,858 VOLUNTARY OVERTIME HOURS AND FORFEITED 1,091 HOURS OF ANNUAL
LEAVE FOR A GRAND TOTAL OF 14,949 HOURS. THIS EQUATES TO 1,868 MAN-DAYS
OR 7.3 MAN-YEARS AND PROVIDED ADDITIONAL SERVICES VALUED AT $162,496.00
(BASED ON THE AVERAGE HOURLY WAGE FOR IPA PROFESSIONALS AT $10.87 PER
HOUR).
"3. A COMPLETE ROSTER OF PERSONNEL REFLECTING THE INDIVIDUAL
BREAKDOWN OF OVERTIME, ANNUAL LEAVE, AND SICK TIME IS ATTACHED."
THE CLAIMANTS THEREFORE CONTEND THAT ONE OF THE APPARENT MAJOR
ADMINISTRATIVE OBJECTIVES WAS THE ACHIEVEMENT OF BUDGETARY SAVINGS BY
AID.
THE BASIC STATUTORY PROVISIONS REGARDING THE PAYMENT OF OVERTIME
COMPENSATION ARE CODIFIED IN 5 U.S.C. 5542 (SUPP. II, 1972). UNDER THIS
STATUTE, WHEN AN OFFICIAL WITH COMPETENT AUTHORITY ORDERS OR APPROVES
HORUS OF WORK IN EXCESS OF 40 HOURS IN AN ADMINISTRATIVE WORKWEEK OR IN
EXCESS OF 8 HOURS A DAY, OVERTIME SHALL BE PAID.
THE DETERMINATIVE ISSUE HERE, AS WAS IN THE CASE OF MATTER OF JOHN W.
GARDNER, B-175275.05, APRIL 7, 1976, IS WHETHER THE OVERTIME WORK
PERFORMED BY MESSRS. BORDENKIRCHER AND JEW WAS "WORK OFFICIALY ORDERED
OR APPROVED," AS THAT CLAUSE APPEARS IN SECTION 5542. THE DECISIONS OF
THIS OFFICE AND THOSE OF THE UNITED STATES COURT OF CLAIMS CLEARLY
ESTABLISH THAT APPROPRIATE ACTION BY AN OFFICIAL HAVING AUTHORITY TO
ORDER OR APPROVE OVERTIME IS A CONDITION PRECEDENT TO RECOVERY OF
COMPENSATION FOR OVERTIME WORK. WITH RESPECT TO THE FACTS AND
CIRCUMSTANCES HEREIN INVOLVED, THE SPECIFIC QUESTION IS WHETHER MR.
LINDQUIST, THE DIRECTOR OF TD, WHO HAD AUTHORITY TO ORDER OR APPROVE
OVERTIME WORK FOR THE CLAIMANTS, KNEW OF OR SHOULD HAVE KNOWN OF ANY
REGULATIONS, DUTY ROSTERS, ETC., WHICH REQUIRED THE PERFORMANCE OF
OVERTIME, AND WHETHER MR. LINDQUISH HAD MORE THAN A "TACIT EXPECTATION"
THAT THE OVERTIME WORK WOULD BE PERFORMED. THUS, AN ASSESSMENT AS TO
THE KNOWLEDGE AND/OR ENDORSEMENT OF MR. LINDQUIST OF THE CONTINUED
PERFORMANCE OF OVERTIME WORK BY MESSRS. BORDENKIRCHER AND JEW IS
REQUIRED.
AS TO WHETHER THE DUTY ROSTERS CONSTITUTE ORDERS TO PERFORM
UNCOMPENSATED OVERTIME WORK SUCH ROSTERS, STANDING ALONG, DO NOT
CONSTITUTE OFFICIAL WRITTEN AUTHROIZATIONS FOR OVERTIME WORK. HOWEVER,
THE COURT OF CLAIMS HAS HELD IN NUMEROUS DECISIONS THAT THE ABSENCE OF
OFFICIAL WRITTEN AUTHORIZATION OR APPROVAL OF OVERTIME WORK DOES NOT
NECESSARILY DEFEAT A CLAIM FOR OVERTIME COMPENSATION UNDER SECTION 201
OF THE FEDERAL EMPLOYEES PAY ACT OF 1945, AS AMENDED, NOW CODIFIED AS 5
U.S.C. 5542. SEE COURT OF CLAIMS DECISIONS CITED IN GARDNER, SUPRA.
IN BAYLOR V. UNITED STATES, 198 CT.CL. 331 (1972), WHICH INVOLVED
CLAIMS BY UNIFORMED GUARDS OF THE GENERAL SERVICES ADMINISTRATION FOR
OVERTIME COMPENSATION FOR VARIOUS PRELIMINARY AND POSTLIMINARY DUTIES,
THE COURT OF CLAIMS STATED THE STANDARDS FOR DETERMINING WHETHER
OVERTIME WAS PROPERLY "ORDERED OR APPROVED." THE COURT EXPLAINED ITS
HOLDING ON PAGE 359 AS FOLLOWS:
" * * * IF THERE IS A REGULATION SPECIFICALLY REQUIRING OVERTIME
PROMULGATED BY A RESPONSIBLE OFFICIAL, THEN THIS CONSTITUTES 'OFFICIALLY
ORDERED OR APPROVED' BUT, AT THE OTHER EXTREME, IF THERE IS ONLY A
'TACIT EXPECTATION' THAT OVERTIME IS TO BE PERFORMED, THIS DOES NOT
CONSTITUTE OFFICIAL ORDER OR APPROVAL.
"IN BETWEEN 'TACIT EXPECTATION' AND A SPECIFIC REGULATION REQUIRING A
CERTAIN NUMBER OF MINUTES OF OVERTIME THERE EXISTS A BROAD RANGE OF
FACTUAL POSSIBILITIES, WHICH IS BEST CHARACTERIZED AS 'MORE THAN A TACIT
EXPECTATION.' WHERE THE FACTS SHOW THAT THERE IS MORE THAN ONLY A 'TACIT
EXPECTATION' THAT OVERTIME BE PERFORMED, SUCH OVERTIME HAS BEEN FOUND TO
BE COMPENSABLE AS HAVING BEEN 'OFFICIALLY ORDERED OR APPROVED,' EVEN IN
THE ABSENCE OF A REGULATION SPECIFICALLY REQUIRING A CERTAIN NUMBER OF
MINUTES OF OVERTIME. WHERE EMPLOYEES HAVE BEEN 'INDUCED' BY THEIR
SUPERIORS TO PERFORM OVERTIME IN ORDER TO EFFECTIVELY COMPLETE THEIR
ASSIGNMENTS AND DUE TO THE NATURE OF THEIR EMPLOYMENT, THIS OVERTIME HAS
BEEN HELD TO HAVE BEEN 'OFFICIALLY ORDERED OR APPROVED' AND THEREFORE
COMPENSABLE."
IN OUR DECISION 53 COMP.GEN. 489 (1974), WE INDICATED THAT WE WOULD
FOLLOW THE PRINCIPLES OF LAW AS SET FORTH IN THE BAYLOR CASE.
THE RECORD DOES NOT SHOW THAT THE CLAIMANTS WERE, BY EXPRESS WRITTEN
ORDERS, DIRECTED TO PERFORM OVERTIME WORK BY THE DIRECTOR OF TD.
HOWEVER, THEY WERE CLEARLY ACTIVELY INDUCED TO PERFORM SUCH OVERTIME
WORK BY THE DIRECTOR WHO HAD THE AUTHORITY TO ORDER OR APPROVE OVERTIME
WORK. THIS WAS ACCOMPLISHED BY THE ISSUANCE OF DUTY ROSTERS SIGNED BY
MR. LINDQUIST SCHEDULING THE CLAIMANTS TO PERFORM SECURITY DUTY WORK
AFTER REGULAR DUTY HOURS ON WEEKDAYS AND SATURDAYS (SEE STAFF NOTICE NO.
54); BY REQUIRING THE CLAIMANTS TO OBTAIN SUBSTITUTES WHEN THEY WERE
UNABLE TO WORK AS SCHEDULED AND SO NOTIFY THE ADMINISTRATIVE SERVICES
BRANCH; BY THE VERY NATURE AND VOLUME OF THE WORK ASSIGNED; AND BY THE
UNDERSTANDING BY BOTH MANAGEMENT OFFICIALS AND THE RANK AND FILE
EMPLOYEES THAT EACH DAY, THE WORK ASSIGNED THE EMPLOYEES HAD TO BE
COMPLETED IN ORDER TO EFFECTIVELY COMPLETE THEIR ASSIGNMENTS. FURTHER,
IT APPEARS THAT THE EMPLOYEES HAD A REASONABLE FEAR OF REPRISAL SINCE
"VOLUNTARY OVERTIME" WAS ENTERED ON PERFORMANCE EVALUATION REPORTS AND
THERE WAS, THUS, THE THREAT OF LOWER PERFORMANCE RATINGS AND EVEN
DISMISSAL IF THE OVERTIME WORK WAS NOT PERFORMED. WHILE MR. LINDQUIST
HAS INDICATED THAT HE DID NOT COERCE ANY EMPLOYEE TO WORK OVERTIME, HE
DID PERMIT THE CONTINUANCE OF THE PREVAILING PRACTICE OF ALLOWING THE
CLAIMANTS, AND OTHER EMPLOYEES SIMILARLY SITUATED, TO PERFORM OVERTIME
SERVICES, AND DIRECTED THEM, IN WRITING, TO PERFORM OVERTIME WORK.
UNDER THE CIRCUMSTANCES IT IS OUR OPINION THAT THE OVERTIME WORK BY
MESSRS. BORDENKIRCHER AND JEW WAS, IN EFFECT, ORDERED AND THE CLAIMANTS
ARE ENTITLED TO PAYMENT OF OVERTIME COMPENSATION UNDER 5 U.S.C. 5542.
IN LIGHT OF THE FOREGOING, THE CLAIMS OF MESSRS. BORDENKIRCHER AND
JEW FOR OVERTIME WORK PERFORMED BY THEM DURING THE PERIODS IN QUESTION
ARE FOR ALLOWANCE BY YOUR AGENCY IN THE AMOUNTS FOUND DUE IF THEY ARE
OTHERWISE PROPER.
B-188125, OCTOBER 31, 1977
HEADNOTES - UNAVAILABLE
AIR TRAFFIC CONTROLLER WAS INVOLUNTARILY REMOVED FROM AIR TRAFFIC
CONTROL DUTIES FOR MEDICAL DISQUALIFICATION. FEDERAL AVIATION
ADMINISTRATION'S BOARD OF REVIEW CONCLUDED THAT MEDICAL EVIDENCE DID NOT
SUPPORT FINDING OF MEDICAL DISQUALIFICATION AND REVERSED THE AGENCY'S
DETERMINATION. BOARD'S DECISION IS FINAL ON THE MATTER AND IS
TANTAMOUNT TO FINDING OF AN UNWARRANTED AND UNJUSTIFIED PERSONNEL
ACTION. EMPLOYEE IS ENTITLED TO PREMIUM PAY WHICH HE WOULD HAVE EARNED
DURING PERIOD OF REASSIGNMENT AWAY FROM TRAFFIC CONTROL DUTIES UNDER
BACK PAY ACT, 5 U.S.C. 5596.
DAVID E. BRIGHT, JR. - AIR TRAFFIC CONTROLLER - BACKPAY FOR MEDICAL
DISQUALIFICATION:
THIS ACTION CONCERNS THE CLAIM OF MR. DAVID E. BRIGHT, JR., AN
EMPLOYEE OF THE FEDERAL AVIATION ADMINISTRATION (FAA), FOR CERTAIN
PREMIUM PAY AND DIFFERENTIALS WHICH HE CLAIMS WERE LOST AS THE RESULT OF
HIS TEMPORARY REASSIGNMENT FOR MEDICAL REASONS FROM AIR TRAFFIC CONTROL
DUTIES TO ADMINISTRATIVE DUTIES. THE MATTER HAS BEEN REFERRED TO OUR
OFFICE JOINTLY BY THE FAA AND THE PROFESSIONAL AIR TRAFFIC CONTROLLERS
ORGANIZATION (PATCO) IN LIEU OF ARBITRATION.
AT ALL RELEVANT TIMES, MR. BRIGHT WAS AN AIR TRAFFIC CONTROL
SPECIALIST AT THE OAKLAND, CALIFORNIA, AIR TRAFFIC CONTROL TOWER. ON
JUNE 16, 1975, MR. BRIGHT WAS TAKEN OFF AIR TRAFFIC CONTROL DUTIES AND
PLACED ON ADMINISTRATIVE DUTIES PENDING MEDICAL EVALUATION. UPON
RECEIPT AND REVIEW OF MEDICAL REPORTS, THE REGIONAL FLIGHT SURGEON
RECOMMENDED TO THE CHIEF, OAKLAND CONTROL TOWER, ON JULY 21, 1975, THAT
MR. BRIGHT BE REMOVED FROM AIR TRAFFIC CONTROL DUTIES. THIS
RECOMMENDATION WAS STATED TO BE BASED ON THE MEDICAL FINDINGS OF THE
CONSULTING DOCTORS. ON JULY 29, 1975, MR. BRIGHT WAS ADVISED THAT HE
WAS MEDICALLY DISQUALIFIED FOR FLIGHT CONTROL AND WAS REMOVED FROM SUCH
DUTY.
BY LETTER DATED AUGUST 4, 1975, MR. BRIGHT ADVISED THE CHIEF, OAKLAND
CONTROL TOWER, THAT HE WISHED TO APPEAL THE DETERMINATION OF THE
REGIONAL FLIGHT SURGEON THAT HE WAS NOT MEDICALLY CAPABLE OF CONTINUING
HIS FLIGHT CONTROL DUTIES. ON APPEAL, MR. BRIGHT SUBMITTED NEW MEDICAL
EVALUATIONS WHICH WERE COMPLETED IN AUGUST 1975 BY A DIFFERENT SET OF
SPECIALISTS. UPON RECEIPT OF THE REPORTS OF THE NEW DOCTORS, THE FAA
REGIONAL FLIGHT SURGEON ISSUED A FINAL DECISION ON OCTOBER 7, 1975,
CONFIRMING HIS PREVIOUS FINDING OF MEDICAL DISQUALIFICATION. THREE DAYS
LATER, MR. BRIGHT RECEIVED A NOTICE OF DETERMINATION FROM THE CHIEF,
OAKLAND CONTROL TOWER, THAT HE WAS TO BE PERMANENTLY REMOVED FROM ACTIVE
CONTROL DUTIES BY REASON OF MEDICAL DISQUALIFICATION. ON OCTOBER 15,
1975, MR. BRIGHT REQUESTED THAT THE ADMINISTRATOR, FEDERAL AVIATION
ADMINISTRATION, RECONSIDER THE REGIONAL FLIGHT SURGEON'S DETERMINATION.
BY LETTER DATED NOVEMBER 13, 1975, THE ACTING FAA ADMINISTRATOR
SUSTAINED THE MEDICAL DISQUALIFICATION, AND STATED THAT A BOARD OF
REVIEW WOULD BE CONVENED IN ACCORDANCE WITH 5 U.S.C. 3383 (SUPP. IV,
1974).
THE AIR TRAFFIC CONTROL SPECIALIST SECOND CAREER PROGRAM BOARD OF
REVIEW MET ON JANUARY 26, 1976, AND REVERSED THE ACTING ADMINISTRATOR'S
FINDING OF MEDICAL DISQUALIFICATION. THE BOARD REVIEWED THE REPORTS OF
EACH OF THE DOCTORS AND NOTED THAT NONE OF THEM RECOMMENDS THAT MR.
BRIGHT BE REMOVED FROM HIS AIR TRAFFIC CONTROL POSITION. FROM ITS
REVIEW OF THE MEDICAL STATEMENTS AND THE OTHER INFORMATION OF RECORD,
THE BOARD OF REVIEW FOUND:
" * * * THE EVIDENCE PRESENTED DOES NOT SUPPORT A CONCLUSION THAT MR.
BRIGHT IS NOT MEDICALLY QUALIFIED FOR AIR TRAFFIC CONTROL DUTIES."
ACCORDINGLY, THE BOARD REVERSED THE DECISION OF THE ACTING
ADMINISTRATOR ISSUED NOVEMBER 13, 1975. MR. BRIGHT WAS RESTORED TO AIR
TRAFFIC CONTROL DUTIES ON MARCH 21, 1976.
ON APRIL 2, 1976, MR. BRIGHT FILED A GRIEVANCE REQUESTING BACK-PAY
FOR ALL NIGHT AND SUNDAY DIFFERENTIAL, HOLIDAY PAY, AND OVERTIME PREMIUM
PAY WHICH HE WOULD HAVE RECEIVED IF HE HAD BEEN SCHEDULED TO PERFORM AIR
TRAFFIC CONTROL FUNCTIONS FROM JUNE 16, 1975, TO MARCH 21, 1976. THE
GRIEVANCE WAS ADMINISTRATIVELY DENIED ON THE GROUNDS THAT THE
REASSIGNMENT FROM CONTROL DUTIES WAS NOT A DISCIPLINARY ACTION.
ALTHOUGH PATCO INITIALLY INDICATED THAT IT WOULD SUBMIT THE GRIEVANCE
FOR ARBITRATION, THE MATTER WAS SUBSEQUENTLY REFERRED JOINTLY BY THE FAA
AND PATCO TO OUR OFFICE FOR A DECISION IN LIEU OF ARBITRATION.
MR. BRIGHT REQUESTS BACKPAY FOR EACH ELEMENT OF PREMIUM PAY
PREVIOUSLY REQUESTED BY HIS GRIEVANCE. IT IS HIS CONTENTION THAT HIS
INVOLUNTARY SUSPENSION FROM AIR TRAFFIC CONTROL DUTIES CONSTITUTED AN
UNWARRANTED OR UNJUSTIFIED PERSONNEL ACTION FOR WHICH BACKPAY MAY BE
AWARDED PURSUANT TO 5 U.S.C. 5596 (1970). IN RESPONSE, THE FAA ARGUES
THAT AN UNWARRANTED OR UNJUSTIFIED PERSONNEL ACTION IS ONE WHICH
VIOLATES THE REQUIREMENTS OF A NONDISCRETIONARY PROVISION WHICH REQUIRES
THE AGENCY TO TAKE A PRESCRIBED ACTION UNDER STATED CONDITIONS OR
CRITERIA. THE FAA CONTENDS THAT 5 U.S.C. 3381 ET SEQ. (SUPP. IV, 1974)
AND THE IMPLEMENTING DIRECTIVE, FAA ORDER 3410.11A (MAY 16, 1975),
PRESCRIBE DISCRETIONARY, RATHER THAN NONDISCRETIONARY, PROVISIONS FOR
REMOVAL OF AN AIR TRAFFIC CONTROLLER FROM AIR FLIGHT DUTIES. IT IS THUS
ARGUED THAT REASSIGNING MR. BRIGHT FROM AIR TRAFFIC CONTROL DUTIES DID
NOT VIOLATE THE REQUIREMENTS OF A NONDISCRETIONARY PROVISION, AND
THEREFORE WAS NOT UNWARRANTED OR UNJUSTIFIED.
RECOGNIZING THE UNIQUE OCCUPATIONAL STATUS OF AIR TRAFFIC
CONTROLLERS, CONGRESS ENACTED PUBLIC LAW 92-297 ON MAY 16, 1972, IN
ORDER TO ESTABLISH A SECOND CAREER PROGRAM AND TO PROVIDE OTHER BENEFITS
FOR CONTROLLERS WHO MUST BE REMOVED FROM FLIGHT CONTROL FUNCTIONS.
THUS, 5 U.S.C. 3381 VESTS THE AGENCY WITH DISCRETION TO REMOVE AN
EMPLOYEE AS A CONTROLLER WHEN REQUIRED TO DO SO FOR MEDICAL REASONS.
HOWEVER, 5 U.S.C. 3383 SPECIFICALLY PROVIDES FOR A BOARD OF REVIEW WHICH
HAS THE POWER TO DETERMINE THE VALIDITY OF THE REMOVAL ACTION AND TO
ISSUE A DECISION WHICH IS BINDING ON BOTH THE AGENCY AND THE EMPLOYEE.
THUS, IT IS CLEAR THAT THE AGENCY HAS THE DISCRETIONARY RIGHT TO
REASSIGN EMPLOYEES, BUT THE FAA'S DISCRETION TO REASSIGN AIR TRAFFIC
CONTROLLERS TO OTHER DUTIES IS SUBJECT TO THE REVIEW PROCEDURES SET
FORTH IN THE STATUTE (5 U.S.C. 3383). WHERE THE BOARD DECIDES THAT THE
AGENCY EXERCISED ITS DISCRETION ERRONEOUSLY, THE GOVERNMENT SHOULD BEAR
THE LOSS OF PREMIUM PAY INVOLVED, NOT THE EMPLOYEE. SEE MARY 3.
SEEBACH, 182 CT.CL. 342, 350 (1968). THE ORIGINAL ACTION TO REMOVE MR.
BRIGHT THEREUPON BECAME SUBJECT TO THE PROVISION OF THE REGULATIONS
GOVERNING AWARDS OF BACKPAY AT 5 C.F.R. 550.803(D) (1976) AS FOLLOWS:
"(D) TO BE UNJUSTIFIED OR UNWARRANTED, A PERSONNEL ACTION MUST BE
DETERMINED TO BE IMPROPER OR ERRONEOUS ON THE BASIS OF EITHER
SUBSTANTIVE OR PROCEDURAL DEFECTS AFTER CONSIDERATION OF THE EQUITABLE,
LEGAL, AND PROCEDURAL ELEMENTS INVOLVED IN THE PERSONNEL ACTION."
IN ADDITION, THE FAA CONTENDS THAT THE REMOVAL ACTIONS WERE JUSTIFIED
BASED ON AN APPARENT MEDICAL DISQUALIFICATION OF MR. BRIGHT, AND THAT
FAILURE TO MOVE HIM MAY HAVE JEOPARDIZED AIR SAFETY. THIS OFFICE HAS
LONG HELD THAT GOVERNMENT EMPLOYEES WHO ARE REASSIGNED OR PLACED IN AN
INVOLUNTARY LEAVE STATUS FOR MEDICAL REASONS ARE ENTITLED TO RECOVER
LOST COMPENSATION, INCLUDING PREMIUM PAY, WHEN IT IS SHOWN THAT THE
EMPLOYEES WERE READY, WILLING, AND ABLE TO PERFORM THEIR DUTIES AND WERE
NOT, IN FACT, MEDICALLY INCAPACITED AT THE TIME OF THE REASSIGNMENT OR
SUSPENSION. THUS, WHERE THE MEDICAL FINDINGS ON WHICH THE PERSONNEL
ACTION WAS BASED HAVE BEEN OVERTURNED OR WHERE THERE WERE NO MEDICAL
FINDINGS TO SUPPORT THE ADMINISTRATIVE DETERMINATION, OUR OFFICE HAS
HELD THE SUSPENSION TO BE AN UNJUSTIFIED OR UNWARRANTED PERSONNEL
ACTION. 39 COMP.GEN. 154 (1959) AND B-170092, SEPTEMBER 1, 1970. OF
COURSE, WHERE THERE ARE COMPETENT MEDICAL FINDINGS THAT THE EMPLOYEE WAS
IN FACT INCAPACITATED AT THE TIME OF THE SUSPENSION, A PERSONNEL ACTION
BASED THEREON WOULD NOT BE UNJUSTIFIED OR UNWARRANTED. 41 COMP.GEN. 774
(1962). SEE CONNIE R. CECALAS, B-184522, MARCH 16, 1976; SUSTAINED
UPON RECONSIDERATION, APRIL 21, 1977.
IN THE PRESENT CASE, THE FAA'S OWN BOARD OF REVIEW OVERTURNED THE
DISQUALIFICATION OF MR. BRIGHT, STATING SPECIFICALLY THAT THE EVIDENCE
DID NOT SUPPORT A CONCLUSION OF MEDICAL DISQUALIFICATION. IN SO DOING,
THE BOARD NOTED THAT NEITHER OF THE EXPERTS SELECTED BY THE FAA
RECOMMENDED THAT MR. BRIGHT BE REMOVED FROM AIR CONTROL DUTIES. SINCE
THE INITIAL REMOVAL ACTION WAS PREDICATED ON THE OPINIONS OF THOSE
EXPERTS, THERE IS AN AUTHORITATIVE DETERMINATION IN THIS CASE BY THE
BOARD OF REVIEW THAT REMOVAL WAS NOT SUPPORTED BY THE EVIDENCE, AND THAT
MR. BRIGHT WAS NOT MEDICALLY DISABLED FOR AIR TRAFFIC CONTROL DUTIES.
IN OUR VIEW, THE BOARD'S DECISION IS TANTAMOUNT TO A FINDING OF AN
UNWARRANTED OR UNJUSTIFIED PERSONNEL ACTION WHICH IS COMPENSABLE UNDER
THE PROVISIONS OF 5 U.S.C. 5596 AND 5 C.F.R. 550.804. PREMIUM PAY IS
SPECIFICALLY INCLUDED IN 5 C.F.R. 550.804(B)(1) WITHIN THE ELEMENTS OF
COMPENSATION FOR WHICH PACKPAY MAY BE AWARDED. SUBCHAPTER V OF CHAPTER
55, TITLE 5, UNITED STATES CODE, INCLUDES OVERTIME PAY, SUNDAY AND
HOLIDAY PAY, AND NIGHT DIFFERENTIAL WITHIN THE GENERAL CATEGORY OF
PREMIUM PAY. SINCE WE HAVE HELD THAT AN EMPLOYEE'S AWARD OF BACKPAY
SHOULD BE COMPUTED AT THE RATE HE WAS RECEIVING ON THE DATE HE WAS
SUSPENDED, INCLUDING PREMIUM PAY HE NORMALLY WOULD HAVE EARNED D RING
THE PERIOD OF SUSPENSION, AN AWARD OF PREMIUM PAY TO MR. BRIGHT IN THIS
CASE IS APPROPRIATE. SEE 39 COMP.GEN. 154, 157, SUPRA.
OUR DECISION IS NOT INTENDED TO SECOND-GURESS THE REASONABLENESS OF
THE INITIAL DECISION TO REASSIGN THE CLAIMANT, NOR TO IMPLY THAT THAT
DECISION WAS ARBITRARY OR CAPRICIOUS. THE FAA CLEARLY HAS THE RIGHT TO
REMOVE ITS EMPLOYEES FROM AIR TRAFFIC CONTROL DUTIES IN THE INTEREST OF
AVIATION SAFETY, AND IT NEED NOT AND SHOULD NOT AVOID ITS DUTY TO
PROTECT AVIATION SAFETY EVEN IN CLOSE CASES. WHERE, HOWEVER, UNDER THE
STATUTORY REVIEW PROCEDURES, THE BOARD OF REVIEW DETERMINES THAT A
REMOVAL ACTION WAS NOT SUPPORTED BY THE MEDICAL EVIDENCE, THE AGENCY
MUST RESTORE THE EMPLOYEE TO HIS POSITION AND REIMBURSE HIM FOR THE
MISTAKEN ACTION TAKEN TO HIS DETRIMENT. SEE MARY E. SEEBACH, SUPRA, AT
350.
ACCORDINGLY, IF OTHERWISE PROPER, MR. BRIGHT MAY BE PAID EACH OF THE
ABOVE ELEMENTS OF PREMIUM PAY WHICH HE WOULD HAVE EARNED FOR THE PERIOD
FROM JUNE 16, 1975, TO MARCH 21, 1976, BUT FOR THE UNWARRANTED AND
UNJUSTIFIED REMOVAL FROM AIR TRAFFIC CONTROL DUTIES.
B-189115, OCTOBER 31, 1977
HEADNOTES - UNAVAILABLE
CONTRACTING OFFICERS ARE ENCOURAGED TO RECONSIDER FINDING OF
NONRESPONSIBILITY AFTER SBA DENIAL OF ISSUANCE OF CERTIFICATE OF
COMPETENCY WHERE NEW INFORMATION, PROBATIVE OF BIDDER'S RESPONSIBILITY,
COMES TO LIGHT BETWEEN DENIAL OF COC AND DATE OF CONTRACT AWARD. ABSENT
BAD FAITH OR FRAUD, GAO WILL NOT REVIEW A CONTRACTING OFFICER'S FINDING
OF NONRESPONSIBILITY UPON RECONSIDERATION AFTER DENIAL OF A COC WHERE IT
APPEARS THAT THE BIDDER'S NEW INFORMATION HAS BEEN FULLY CONSIDERED.
INFLATED PRODUCTS COMPANY, INC.:
INFLATED PRODUCTS COMPANY, INC. (INFLATED PRODUCTS), PROTESTS ANY
AWARD TO ANY OTHER BIDDER UNDER SOLICITATION NO. DAAK01-77-B-5011 ISSUED
BY THE UNITED STATES ARMY TROOP SUPPORT COMMAND. INFLATED PRODUCTS
CONTENDS THAT IT IS NOW THE LOW RESPONSIVE, RESPONSIBLE BIDDER.
THE RECORD IN THIS MATTER SHOWS THAT THE CONTRACTING OFFICER, AFTER A
PREAWARD SURVEY, FOUND INFLATED PRODUCTS TO BE NONRESPONSIBLE ON THE
BASIS OF PAST PERFORMANCE AND FOR LACK OF FINANCIAL CAPACITY AND
REFERRED THE MATTER TO THE SMALL BUSINESS ADMINISTRATION (SBA) ON JULY
28, 1977. ON AUGUST 18, 1977, THE SBA ISSUED ITS DETERMINATION NOT TO
AWARD A CERTIFICATE OF COMPETENCY (COC) TO INFLATED PRODUCTS. ON
OCTOBER 3, 1977, INFLATED PRODUCTS FILED THIS PROTEST, CONTENDING THAT
IT HAS NEW INFORMATION, FORWARDED BY MESSAGE DATED OCTOBER 5, WHICH
SHOWS IT TO BE A RESPONSIBLE BIDDER. THE CONTRACTING OFFICER STATES
THAT ALL INFORMATION SUBMITTED BY INFLATED PRODUCTS, UP TO AND INCLUDING
THE MESSAGE OF OCTOBER 5, HAS BEEN CONSIDERED AND RECONSIDERED AND HE
STILL FINDS INFLATED PRODUCTS TO BE NONRESPONSIBLE.
AS WE STATED IN INFLATED PRODUCTS COMPANY, INCORPORATED, B-188319,
MAY 25, 1977, 77-1 CPD 365:
"IN THE RECENT CASES OF PRECISION ELECTRONICS LABS, B-186251, OCTOBER
29, 1976, 76-2 CPD 369, AND CRAWFORD DEVELOPMENT AND MANUFACTURING,
B-188110, MARCH 15, 1977, 77-1 CPD 193, WE STATED OUR WILLINGNESS TO
RECOMMEND REASSESSMENT OF THE RESPONSIBILITY OF A PROSPECTIVE CONTRACT
WHERE IT APPEARS THAT EITHER SBA OR THE AGENCY FAILED TO CONSIDER ALL
RELEVANT INFORMATION. ALTHOUGH WE DO NOT REVIEW THE AGENCY'S INITIAL
DETERMINATION THAT A SMALL BUSINESS IS NONRESPONSIBLE WHEN THE QUESTION
HAS BEEN REFERRED TO SBA AND THE AGENCY'S DETERMINATION IS AFFIRMED, SEE
MARINE RESOURCES, INC., B-179738(1), FEBRUARY 20, 1974, 74-1 CPD 82, WE
DO NOT TREAT THE DENIAL OF A COC AS DISPOSITIVE WHERE, DURING THE PERIOD
BETWEEN THE COC DENIAL AND CONTRACT AWARD, INFORMATION PROBATIVE AS TO
THE BIDDER'S RESPONSIBILITY COMES TO LIGHT FOR THE FIRST TIME.
PRECISION ELECTRONICS LABS AND CRAWFORD DEVELOPMENT AND MANUFACTURING,
SUPRA, AND 53 COMP.GEN. 344 (1973). EVEN IN THOSE CASES, HOWEVER, WE
HAVE LIMITED OUR REVIEW TO RECOMMENDING THAT THE AGENCY REASSESS THE
BIDDER'S RESPONSIBILITY WHERE SUCH NEWLY AVAILABLE INFORMATION HAS NOT
BEEN CONSIDERED. SEE, HARPER ENTERPRISES, 53 COMP.GEN. 496 (1974), 74-1
CPD 31; GALLERY INDUSTRIES, INC., B-185963, APRIL 16, 1976, 76-1 CPD
262.
"WE WOULD AGREE THAT THE CONTRACTING OFFICER SHOULD MAKE HIS FINAL
DETERMINATION OF RESPONSIBILITY NOT ON THE BASIS OF 'STALE' INFORMATION,
BUT ON THE BASIS OF INFORMATION MADE AVAILABLE AS CLOSELY AS PRACTICABLE
TO THE CONTRACT AWARD. SEE 53 COMP.GEN. 344 (1973). AT THE SAME TIME,
WE DO NOT BELIEVE A BIDDER CAN REASONABLY EXPECT THE GOVERNMENT TO
WITHHOLD AWARD INTERMINABLY WHILE THE BIDDER ATTEMPTS TO CURE THE CAUSES
FOR ITS BEING FOUND NONRESPONSIBLE. WE BELIEVE THIS IS ESPECIALLY TRUE
WHERE, AS HERE, THE CONTRACTING OFFICER'S NEGATIVE DETERMINATION IS
AFFIRMED BY THE SBA'S DENIAL OF THE COC."
ABSENT BAD FAITH OR FRAUD, WE WILL NOT REVIEW A CONTRACTING OFFICER'S
FINDING OF NONRESPONSIBILITY UPON RECONSIDERATION WHERE THE SBA HAS
PREVIOUSLY DENIED ISSUANCE OF A COC AND IT APPEARS THAT THE BIDDER'S NEW
INFORMATION HAS BEEN FULLY CONSIDERED. TO DO OTHERWISE WOULD BE TO
SUBSTITUTE OUR JUDGMENT FOR THAT OF THE COGNIZANT CONTRACTING OFFICIALS.
WE PERCEIVE NO SUCH BAD FAITH ON THE PART OF CONTRACTING OFFICIALS IN
THIS CASE. ACCORDINGLY, THE PROTEST IS DISMISSED.
B-189173, OCTOBER 31, 1977
HEADNOTES - UNAVAILABLE
1. WHERE SOLICITATION IS AMBIGUOUS AS TO APPLICATION OF ST. LOUIS
AFFIRMATIVE ACTION PLAN TO PROCUREMENT AND LOW BIDDER FAILS TO RETURN
PLAN WITH BID, READVERTISEMENT OF PROCUREMENT USING CLEAR NOTICE THAT
PLAN REQUIREMENTS FOR SUBMISSION ARE APPLICABLE IS APPROPRIATE. BIDDER
DOES NOT COMMIT ITSELF TO AFFIRMATIVE ACTION REQUIREMENTS MERELY BY
SIGNING BID WHEN SOLICITATION REQUIRES SOMETHING MORE.
2. CLAIM FOR RESTITUTION AS A RESULT OF NO AWARD BEING MADE TO
BIDDER AND PROCUREMENT BEING READVERTISED IS DENIED, SINCE RECORD DOES
NOT INDICATE THAT CONTRACTING OFFICER ACTED FRADULENTLY OR IN BAD FAITH
OR OTHERWISE ABUSED HIS DISCRETION.
R. G. ROSS CONSTRUCTION CO., INC.:
ON MARCH 14, 1977, THE DEPARTMENT OF THE INTERIOR (INTERIOR) ISSUED A
SOLICITATION (NO. 6520-9708) THROUGH THE NATIONAL PARK SERVICE FOR
ACOUSTICAL IMPROVEMENTS TO THE ARCH VISITOR CENTER, JEFFERSON NATIONAL
EXPANSION MEMORIAL NATIONAL HISTORIC SITE (CENTER) IN MISSOURI. THE
SOLICITATION CONTAINED THE AFFIRMATIVE ACTION PLAN (PLAN), REQUIRED BY
THE DEPARTMENT OF LABOR FOR WORK WITHIN THE ST. LOUIS, MISSOURI, AREA.
R. G. ROSS CONSTRUCTION CO., INC. (ROSS), THE LOW BIDDER, AND HUBBARD
AND HUBBARD, INC., THE SECOND LOW BIDDER, DID NOT RETURN THE PLAN WITH
THEIR BIDS. THE THIRD LOW BIDDER FAILED TO ACKNOWLEDGE RECEIPT OF AN
AMENDMENT OF THE SOLICITATION. THE THREE LOW BIDDERS WERE DETERMINED TO
BE NONRESPONSIVE AND THE AWARD WAS MADE TO THE FOURTH LOW BIDDER,
HOEL-STEFFEN CONSTRUCTION COMPANY.
ROSS PROTESTED THE REJECTION OF ITS BID TO INTERIOR. THE PROTEST WAS
DENIED. ROSS THEN FILED A PROTEST WITH THIS OFFICE. AS A RESULT OF THE
LATTER PROTEST, THE CONTRACTING OFFICER DETERMINED THAT THE SOLICITATION
WAS AMBIGUOUS AND TERMINATED THE HOEL-STEFFEN CONTRACT FOR THE
CONVENIENCE OF THE GOVERNMENT. INTERIOR NOW PROPOSES A READVERTISEMENT
"USING A CLEAR NOTICE TO ALL BIDDERS THAT IMPOSED PLAN REQUIREMENTS ARE
APPLICABLE TO THIS PROCUREMENT." ROSS DISAGREES THAT THE PROCUREMENT
SHOULD BE READVERTISED. ROSS CONTENDS THAT THE AWARD SHOULD BE MADE TO
IT UNDER THE ORIGINAL SOLICITATION.
ON THE FIRST PAGE OF THE AFFIRMATIVE ACTION MATERIAL THERE IS A
WARNING:
"TO BE ELIGIBLE FOR AWARD OF THE CONTRACT, EACH BIDDER MUST FULLY
COMPLY WITH THE REQUIREMENTS, TERMS AND CONDITIONS OF THIS DOCUMENT"
UNDER THE "REQUIREMENTS, TERMS AND CONDITIONS" SECTION, THE FOLLOWING
IS PROVIDED:
"1. NO CONTRACTS OR SUBCONTRACTS SHALL BE AWARDED FOR FEDERAL OR
FEDERALLY-ASSISTED CONSTRUCTION IN THE ST. LOUIS, MISSOURI AREA ON
PROJECTS WHOSE ESTIMATED COST EXCEEDS $500,000 UNLESS THE BIDDER
COMPLETES AND SUBMITS, PRIOR TO BID OPENING, THIS DOCUMENT OR A
SUBSTNATIALLY SIMILAR DOCUMENT, WHICH SHALL INCLUDE SPECIFIC GOALS OF
MINORITY MANPOWER UTILIZATION FOR EACH TRADE DESIGNATED * * *
"A BIDDER WHO FAILS OR REFUSES TO COMPLETE OR SUBMIT SUCH GOALS SHALL
NOT BE DEEMED A RESPONSIVE BIDDER AND MAY NOT BE AWARDED THE CONTRACT OR
SUBCONTRACT, * * * "
IT IS WELL SETTLED THAT AN AMBIGUITY EXISTS WHEN TWO OR MORE
REASONABLE INTERPRETATIONS ARE POSSIBLE. SEE 48 COMP.GEN. 747, 760
(1968), CITING DITTMORE-FREIMUTH CORP. V. UNITED STATES, 182 CT.CL. 507,
390 F.2D 664 (1968).
ROSS CONTENDS THAT THE SOLICITATION SPECIFICATIONS WERE NOT
AMBIGUOUS. IN SUPPORT OF THIS, ROSS ARGUES THAT NOWHERE IN THE BID
DOCUMENTS DOES IT STATE THAT A BIDDER IS REQUIRED TO SUBMIT THE PLAN ON
A PROJECT WHOSE ESTIMATED COST DOES NOT EXCEED $500,000. IT IS ROSS'
POSITION THAT SINCE THE SOLICITATION STATES THAT THE ESTIMATED PRICE OF
THE PROJECT IS BETWEEN $150,000 AND $180,000 AND THE PROJECT HAS ITS OWN
NUMBER (6520-9708), THE BID SHOULD NOT HAVE BEEN DECLARED NONRESPONSIVE.
MOREOVER, UNDER THESE CIRCUMSTANCES, ROSS CONTENDS THAT IT IS NOT
NECESSARY FOR THE SOLICITATION TO CONTAIN, WHICH IT DOES NOT, A
DEFINITION OF THE TERM "PROJECT."
ON THE OTHER HAND, INTERIOR CONTENDS THAT ROSS' BID WAS NONRESPONSIVE
BECAUSE IT FAILED TO INCLUDE THE PLAN. INTERIOR AGREES WITH ROSS THAT
THE SOLICITATION DOES NOT STATE SPECIFICALLY THAT THE PLAN SHOULD BE
SUBMITTED WITH THE BID. HOWEVER, IT IS INTERIOR'S POSITION, BASED ON
THE DEPARTMENT OF LABOR'S INTERPRETATION OF 41 C.F.R. 60-5.2 (1976),
THAT THE TERM "PROJECT" IS DEFINED AS A TOTAL DEVELOPMENT OF A SITE AND
THE ENTIRE DEVELOPMENT OF THE CENTER CONSTITUTES THE PROJECT AND NOT
EACH INDIVIDUAL CONTRACT. SEE 41 C.F.R. 60-7.2 (1976) (CONCERNING THE
ST. LOUIS PLAN). INTERIOR STATES THAT IT IS UNFORTUNATE THAT THE PLAN
DID NOT INCLUDE A DEFINITION OF "PROJECT" AND, IN THE FUTURE, IT WILL
CORRECT THIS DEFICIENCY. NEVERTHELESS, INTERIOR CONTENDS THAT THIS DOES
NOT CHANGE THE REQUIREMENT FOR SUBMITTING THE PLAN WITH THE BID.
WHILE IT MIGHT HAVE BEEN INTERIOR'S INTENTION THAT THE PLAN BE
SUBMITTED WITH THE BID, THIS WAS NOT CLEARLY SET FORTH IN THE BID
DOCUMENTS AND TO THAT EXTENT THE SOLICITATION WAS AMBIGUOUS. MOREOVER,
A READING OF THE PLAN COULD REASONABLY LEAD ONE TO CONCLUDE THAT
"PROJECT" MEANS A SINGLE CONTRACT (ROSS) AS EASILY AS TOTAL DEVELOPMENT
OF AN ENTIRE SITE (INTERIOR). THEREFORE, SINCE ROSS' INTERPRETATION WAS
NOT UNREASONABLE, THE BID COULD NOT BE REJECTED AS NONRESPONSIVE TO THE
TERMS OF THE SOLICITATION AS WRITTEN. SEE B-169205, MAY 22, 1970,
AFFIRMED, B-169205, JUNE 23, 1970. HOWEVER, WHILE WE ARE UNABLE TO
AGREE WITH INTERIOR THAT ROSS' BID WAS NONRESPONSIVE, WE ARE OF THE
OPINION THAT AN AWARD SHOULD NTO HAVE BEEN MADE, SINCE THE SOLICITATION
FAILED TO PROVIDE CLEAR AND OBJECTIVE INSTRUCTIONS WHEREUNDER ALL
BIDDERS WERE APPRISED, IN ADVANCE OF BID OPENING, OF THE MANNER IN WHICH
TO SUBMIT THEIR BIDS IN ORDER TO BE ELIGIBLE FOR AWARD. SEE B-169205,
SUPRA.
ROSS INDICATES THAT, RATHER THAN READVERTISING, THE AWARD SHOULD BE
MADE TO IT BECAUSE THE PLAN WAS INCLUDED IN THE SPECIFICATION BOOK AND
IT IS BOUND BY THE SUBMISSION OF ITS BID TO ALL DOCUMENTS CONTAINED IN
THE SPECIFICATIONS. HOWEVER, A BIDDER DOES NOT COMMIT ITSELF TO
AFFIRMATIVE ACTION REQUIREMENTS OF A SOLICITATION MERELY BY SIGNING THE
BID WHEN THE SOLICITATION REQUIRES SOMETHING MORE. SEE 52 COMP.GEN. 874
(1973).
INTERIOR HAS STATED ALSO THAT, AS SUBSTANTIAL WORK HAS BEEN PERFORMED
BY THE TERMINATED CONTRACTOR, AN AWARD TO ROSS BASED ON ITS ORIGINAL BID
WOULD RESULT IN INTERIOR CONTRACTING NOW FOR SOME WORK WHICH HAS BEEN
DONE. ROSS HAS SUGGESTED THEN THAT THE CONTRACT COULD BE AWARDED TO IT
AND A CHANGE ORDER COULD BE ISSUED ELIMINATING THE ACCOMPLISHED WORK.
HOWEVER, IN 53 COMP.GEN. 838, 839-840 (1974), IT WAS STATED:
" * * * THE COMPETITION TO BE ACHIEVED IN THE AWARD OF GOVERNMENT
CONTRACTS MUST BE HELD TO THE WORK ACTUALLY TO BE PERFORMED. THUS, A
CONTRACTING OFFICER MAY NOT AWARD A CONTRACT COMPETED UNDER A GIVEN
SPECIFICATION WITH THE INTENTION TO CHANGE TO A DIFFERENT SPECIFICATION
AFTER AWARD. OTHERWISE A MAJOR PURPOSE OF THE FEDERAL PROCUREMENT
SYSTEM WOULD BE THWARTED. CF. 37 COMP.GEN. 524 (1958); 46 ID. 281
(1966)."
ACCORDINGLY, WE CONCUR WITH INTERIOR'S PROPOSAL TO READVERTISE THE
PROCUREMENT USING A CLEAR NOTICE TO ALL BIDDERS THAT THE PLAN
REQUIREMENTS ARE APPLICABLE.
THERE ARE TWO ADDITIONAL AREAS OF CONCERN WHICH ROSS PRESENTED:
1. WHERE IN THE PLAN IS IT MENTIONED THAT IT WAS AN IMPOSED PLAN?
2. RESTITUTION, IN SOME FORM, TO COMPENSATE THE FIRM FOR ITS TIME,
LOSS OF OVERHEAD AND PROFIT, EMBARRASSMENT, AND POTENTIAL LAY-OFFS OF
KEY PERSONNEL.
WITH REFERENCE TO THE FIRST POINT, ALTHOUGH THE PLAN DOES NOT STATE
THAT IT IS AN IMPOSED PLAN, C.F.R. CONTAINS THE IMPOSED PLANS. SEE 41
C.F.R.PART 60.7 (1976) FOR THE ST. LOUIS PLAN.
CONCERNING THE SECOND POINT, ROSS' REQUEST FOR RESTITUTION IS DENIED.
IT IS WELL ESTABLISHED THAT ANTICIPATED PROFIT MAY NOT BE AWARDED TO AN
UNSUCCESSFUL BIDDER. SEE KECO INDUSTRIES, INC. V. UNITED STATES, 428
F.2D 1233 (CT. CL. 1970); HEYER PRODUCTS COMPANY V. UNITED STATES, 140
F.SUPP. 409 (CT. CL. 1956). THE EXPENSES INCURRED IN PURSUING A PROTEST
ALSO ARE NONCOMPENSABLE COSTS. DESCOMP, INC. V. SAMPSON, 377 F.SUPP.
254 (D. DEL. 1974); T&H COMPANY, 54 COMP.GEN. 1021 (1975), 75-1 CPD
345.
UNDER CERTAIN CIRCUMSTANCES, WHERE IT IS SHOWN THAT A BID WAS NOT
FAIRLY OR PROPERLY CONSIDERED FOR AWARD BECAUSE OF SUBJECTIVE BAD FAITH
OR ACTIONS CONTRARY TO LAW OR REGULATION ON THE PART OF PROCURING
OFFICIALS, OR THAT THERE WAS NO REASONABLE BASIS FOR THE AGENCY'S
ACTION, BID PREPARATION EXPENSES MAY BE AWARDED. KECO INDUSTRIES, INC.
V. UNITED STATES, 492 F.2D 1200 (CT. CL. 1974); THE MCCARTHY
CORPORATION V. UNITED STATES, 499 F.2D 633 (CT. CL. 1974); T&H COMPANY,
SUPRA. HERE, WE DO NOT FIND THAT THE RECORD CONTAINS ANY EVIDENCE
INDICATING THAT THE CONTRACTING OFFICER ACTED FRAUDULENTLY OR IN BAD
FAITH OR OTHERWISE ABUSED HIS DISCRETION. CONSEQUENTLY, THERE IS NO
BASIS FOR ALLOWING BID PREPARATION COSTS IN THIS CASE.
ACCORDINGLY, THE PROTEST AND CLAIM FOR RESTITUTION ARE DENIED.
B-190413, OCTOBER 31, 1977
HEADNOTES - UNAVAILABLE
PROTEST BASED ON CONTENTION THAT LOW BIDDER IS INCAPABLE OF RENDERING
REQUIRED SERVICES IS DISMISSED SINCE IT CONCERNS CHALLENGE TO AGENCY'S
AFFIRMATIVE DETERMINATION OF RESPONSIBILITY WHICH IS NOT MATTER FOR
REVIEW BY GAO EXCEPT IN CIRCUMSTANCES NOT PRESENT HERE.
LOUISVILLE BILLIARD SUPPLY COMPANY:
LOUISVILLE BILLIARD SUPPLY COMPANY (LOUISVILLE) PROTESTS THE
ANTICIPATED AWARD OF A CONTRACT UNDER SOLICITATION NO. GSW-4FWR-70031,
ISSUED BY THE GENERAL SERVICES ADMINISTRATION, FOR THE REPAIR AND
MAINTENANCE OF POOL TABLES, TO THE APPARENT LOW BIDDER, MR. AL FUTRELL.
LOUISVILLE QUESTIONS MR. FUTRELL'S RESPONSIBILITY, ALLEGING THAT HE
HAS NO EXISTING COMPANY, NO STORE LOCATION AND NO EMPLOYEES. IT IS
LOUISVILLE'S BELIEF THAT MR. FUTRELL IS INCAPABLE OF RENDERING THE
REQUIRED SERVICES.
THIS OFFICE DOES NOT REVIEW PROTESTS OF AFFIRMATIVE DETERMINATIONS OF
RESPONSIBILITY, UNLESS FRAUD IS ALLEGED ON THE PART OF THE CONTRACTING
OFFICER OR THE SOLICITATION CONTAINS DEFINITIVE RESPONSIBILITY CRITERIA
WHICH ALLEGEDLY HAVE NOT BEEN APPLIED. SEE CENTRAL METAL PRODUCTS,
INC., 54 COMP.GEN. 66 (1974), 74-2 CPD 64; DATA TEST CORPORATION, 54
COMP.GEN. 499 (1974), 74-2 CPD 365, AFFIRMED 54 COMP.GEN. 715 (1975),
75-1 CPD 138. WHILE WE DO CONSIDER PROTESTS INVOLVING NEGATIVE
DETERMINATIONS OF A PROTESTER'S RESPONSIBILITY IN ORDER TO PROVIDE
ASSURANCE AGAINST THE ARBITRARY REJECTION IN ORDER TO PROVIDE ASSURANCE
AGAINST THE ARBITRARY REJECTION OF BIDS, AFFIRMATIVE DETERMINATIONS ARE
BASED IN LARGE MEASURE ON SUBJECTIVE JUDGMENTS WHICH ARE LARGELY WITHIN
THE DISCRETION OF THE PROCURING OFFICIALS WHO MUST SUFFER ANY
DIFFICULTIES RESULTING BY REASON OF A CONTRACTOR'S INABILITY TO PERFORM.
HERE THERE IS NO ALLEGATION THAT THE RESPONSIBILITY DETERMINATION WAS
THE RESULT OF FRAUD OR THAT DEFINITIVE CRITERIA HAVE NOT BEEN APPLIED.
THE PROTEST IS DISMISSED
B-186983, OCTOBER 28, 1977
HEADNOTES - UNAVAILABLE
1. OFFEROR DOES NOT MEET BENCHMARK REQUIREMENT BY DEMONSTRATING
EARLIER VERSION OF MODEL IT PROPOSES TO FURNISH. ALTHOUGH OFFEROR
CONTENDS THAT BOTH MODELS ARE FUNCTIONALLY IDENTICAL, RECORD SHOWS THAT
OFFEROR HAS NOT YET PRODUCED MODEL IT PROPOSES TO FURNISH AND HENCE
AGENCY REASONABLY CONCLUDED THAT BENCHMARK OF THAT MODEL RATHER THAN
EARLIER VERSION OF THAT MODEL WAS REQUIRED.
2. AGENCY DID NOT WAIVE ITS RIGHT TO OBJECT TO OFFEROR'S USE FOR
BENCHMARK TEST OF EARLIER VERSION OF MODEL IT PROPOSES TO FURNISH MERELY
BECAUSE AGENCY EVALUATORS PERMITTED OFFEROR TO COMPLETE BENCHMARK TEST.
EVALUATORS' ROLE AT BENCHMARK TEST WAS TO OBSERVE AND REPORT ON RESULTS
OF OFFEROR'S BENCHMARK TO CONTRACTING OFFICER.
3. ALLEGATION OF BIAS IN EVALUATION IS NOT SUSTAINED SINCE RECORD
SHOWS THAT AGENCY'S EVALUATION WAS REASONABLE.
4. CONTENTION THAT SPECIFICATIONS CONTAINED LATENT AMBIGUITIES IS
DENIED. SOLICITATION NEED NOT USE WORK "MANDATORY" TO INDICATE TO
OFFERORS THAT LISTED FEATURES WERE REQUIRED WITH EQUIPMENT TO BE
SUPPLIED. MOREOVER, AGENCY'S POSSIBLE WILLINGNESS TO CONSIDER PROPOSED
CHANGE FROM A LISTED FEATURE DOES NOT INDICATE THAT LISTED FEATURES WERE
NOT MANDATORY.
TELEFILE COMPUTER PRODUCTS, INC.:
TELEFILE COMPUTER PRODUCTS, INC. (TELEFILE) PROTESTS THE EXCLUSION OF
ITS PROPOSAL FROM THE COMPETITIVE RANGE UNDER DEPARTMENT OF THE ARMY
REQUEST FOR PROPOSALS (RFP) DAAB09-76-R-0013 FOR THE PURCHASE OF 64
PROGRAMMABLE COMMUNICATIONS CONTROLELRS, MAINTENANCE AND SOFTWARE.
THE RFP WAS ISSUED ON APRIL 22, 1976, AND WAS THE SUBJECT OF A PRIOR
PROTEST TO THIS OFFICE WHICH WAS DENIED. COMTEN, INC., B-186983,
DECEMBER 8, 1976, 76-2 CPD 468; AFFIRMED ON RECONSIDERATION, MARCH 3,
1977, 77-1 CPD 173. BASED ON THE PROPOSALS SUBMITTED, THREE FIRMS
(INCLUDING TELEFILE) WERE INITIALLY INCLUDED WITHIN THE COMPETITIVE
RANGE.
TELEFILE PROPOSED A COMMUNICATIONS CONTROLLER IT DESIGNED AS THE
FECP-I, AN ACRONYM FOR FRONT END COMMUNICATIONS PROCESSOR, WITH THE "I"
USED TO DESIGNATE IBM COMPATIBLE EQUIPMENT. TELEFILE ALSO PROPOSED TO
FURNISH SOFTWARE IT IDENTIFIED AS FROS. BOTH THE FECP-I AND FROS WERE
FOUND TO BE TECHNICALLY ACCEPTABLE AS PROPOSED, SUBJECT, HOWEVER, TO THE
FOLLOWING RFP PROVISIONS:
"SECTION E
"3. REQUIREMENTS.
A. HARDWARE REQUIREMENTS.
(13) PRODUCTION STATUS. TO INSURE EARLY OPERATION AND RELIABILITY OF
THE SYSTEM, ONLY STANDARD PRODUCTION MODULES MAY BE PROPOSED.
SUCCESSFUL PRODUCTION MODULES MAY BE PROPOSED. SUCCESSFUL INSTALLATION
AT OTHER (NON-BIDDER) LOCATIONS WILL BE TAKEN AS EVIDENCE OF SUCH
PRODUCTION STATUS.
"4. DEMONSTRATIONS.
A. THE GOVERNMENT WILL REQUIRE AN OPERATIONAL DEMONSTRATION, PRIOR TO
SELECTION OF A VENDOR, OF ALL EQUIPMENT, SOFTWARE, AND SYSTEMS
CAPABILITY PROPOSED IN SATISFACTION OF REQUIREMENTS IN THESE
SPECIFICATIONS."
TELEFILE'S DEMONSTRATIONS WERE HELD AT TWO LOCATIONS-- A NATIONAL
AERONAUTICS AND SPACE ADMINISTRATION (NASA) FACILITY IN LINTHICUM
HEIGHTS, MARYLAND, AND IN A PRIVATE FACILITY IN IRVINE, CALIFORNIA.
BOTH LOCATIONS WERE DESIGNATED BY TELEFILE, AND AT NEITHER LOCATION WAS
EQUIPMENT IDENTIFIED AS "FECP-I" OR "FROS" SOFTWARE DEMONSTRATED. WHAT
WAS DEMONSTRATED WAS A COMMUNICATIONS CONTROLLER MARKETED BY TELEFILE AS
THE TCP-64, AND WHAT PROTESTER STATES WERE SEPARATE ELEMENTS OF THE FROS
SOFTWARE.
THE PROTESTER HAS, IN OUR VIEW, APPROPRIATELY IDENTIFIED THE
PRINCIPAL ISSUE WHICH IS DISPOSITIVE OF THE PROTEST. ACCORDING TO
TELEFILE: "THE REAL ISSUE SHINES CLEARLY, I.E., IS TELEFILE'S * * *
LONG PRODUCED TCP-64 FOR ALL INTENTS AND PURPOSES THE SAME AS THE
EQUIPMENT PROPOSED BY TELEFILE AND CALLED THE FECP-I? IT IS * * *
TELEFILE'S POSITION THAT THE TCP-64 AND THE FECP-I ARE THE SAME * * *
AND THE ARMY KNOWS THEY ARE THE SAME."
PROTESTER ACKNOWLEDGES THAT THE TCP-64 WAS MANUFACTURED USING WIRE
WRAP CIRCUITRY, WHILE THE HARDWARE PROPOSED IS TO BE MANUFACTURED WITH
PRINTED CIRCUIT BOARDS INSTEAD OF THE WIRE WRAP METHOD OF CONSTRUCTION.
THERE IS NOTHING IN THE RECORD TO SUGGEST THAT AT THE TIME OF THE
DEMONSTRATIONS, ANY IBM COMPATIBLE FRONT END COMMUNICATIONS CONTROLLERS
MANUFACTURED WITH PRINTED CIRCUIT BOARDS WERE IN REGULAR PRODUCTION BY
TELEFILE OR SUCCESSFULLY INSTALLED IN ANY LOCATION. NONETHELESS,
TELEFILE CONTENDS THAT THE TWO UNITS ARE FUNCTIONALLY IDENTICAL, AND
THEREFORE MAINTAINS THAT THE EQUIPMENT DEMONSTRATED (TCP-64) WAS THE
SAME AS THAT PROPOSED; THAT THE ARMY THEREFORE IN FACT WITNESSES THE
FECP-I IN OPERATION. IN THIS REGARD, AT A CONFERENCE HELD AT THIS
OFFICE ON JULY 20, 1977, PURSUANT TO OUR BID PROTEST PROCEDURES,
TELEFILE OFFERED FOR THE RECORD WHAT IT STATED TO BE THE LOGIC DIAGRAMS
FOR THE TWO SYSTEMS. IN ADDITION, TELEFILE DISPLAYED BOTH THE WIRE WRAP
AND PRINTED CIRCUIT BOARDS PURPORTED TO BE USED IN THE RESPECTIVE
SYSTEMS.
IN VARIOUS SUBMISSIONS TO THIS OFFICE, THE PROTESTER HAS ASSERTED (1)
THAT IT CHANGED THE NAME OF THE MODEL IT PROPOSED BECAUSE IT PLANNED TO
USE PRINTED CIRCUITS IN THE HARDWARE IT DELIVERED TO THE GOVERNMENT, (2)
THAT THE MODEL TO BE DELIVERED (WIRE WRAP VS PRINTED CIRCUITS) WAS
DEPENDENT ON WHICH WAS COMING OFF THE PRODUCTION LINE AT THE TIME
DELIVERY WAS REQUIRED, (3) THAT THE PRODUCT WAS RELABELED TO DISTINGUISH
IT FROM THE CONTROLLERS BUILT FOR OTHER HOST COMPUTERS (THE "I" FOR
"IBM"), AND (4) THE ARMY ACTUALLY OBSERVED THE FECP-I IN OPERATION AT
NASA (ALTHOUGH IT WAS THE WIRE WRAP TCP-64). THUS, THE PROTESTER STATES
THAT "TELEFILE CHANGED THE NAME OF THE TCP-64 BECAUSE IT PLANNED TO USE
PRINTED CIRCUIT BOARDS IN THE DELIVERED EQUIPMENT RATHER THAN THE MORE
COSTLY WIRE WRAP CIRCUITS THEN IN USE." TELEFILE INSISTS THAT SUCH A
CHANGE "PROVES THE PRODUCTION STATUS OF THE FECP-I, AS A WIRE-WRAP
CIRCUIT IS USED BASICALLY WHILE AN ITEM IS STILL IN THE DEVELOPMENT
STAGE. WIRE-WRAP CIRCUITRY CAN BE CHANGED MUST MORE READILY AND
INEXPENSIVELY THAN A PRINTED CIRCUIT BOARD." THE PROTESTER STATES THAT
THE MODEL TO BE DELIVERED TO THE GOVERNMENT "WAS STRICTLY A FUNCTION OF
THE TIME AT WHICH THE ORDER WAS PLACED." IT ASSERTS THAT IF THE MODEL
CONTAINING PRINTED CIRCUITS "WAS COMING OFF THE PRODUCTION LINE AT THE
TIME DELIVERY WAS REQUIRED", THAT MODEL WOULD HAVE BEEN DELIVERED, IF
NOT, THE EARLIER WIRE WRAP MODEL (TCP-64) WOULD HAVE BEEN DELIVERED.
THE PRESIDENT OF TELEFILE STATES IN PERTINENT PART THAT:
"AT NO TIME DID HE STATE THAT THE FECP-I MODEL OF THE TELEFILE
COMPUTER PRODUCTS, INC. FRONT-END COMMUNICATIONS CONTROLLER WAS NOT
SCHEDULED FOR PRODUCTION STATUS UNTIL JULY 1977. SINCE THE TELEFILE
COMPUTER PRODUCTS, INC. FRONT-END COMMUNICATIONS CONTROLLER WAS
RELABELED TO FECP-1 FROM TCP-64 TO DISTINGUISH IT FROM OTHER FRONT-END
COMMUNICATIONS CONTROLLERS BEING BUILT FOR OTHER HOST COMPUTERS, THE
ARMY APPARENTLY HAS CHOSEN TO BELATEDLY CONFUSE THE FECP-1 MODEL
FRONT-END COMMUNICATIONS PROCESSOR WITH THE MICRO-PROGRAMMABLE VERSION
OF THE FECP-1 FRONT-END COMMUNICATIONS CONTROLLER SCHEDULED FOR NORMAL
PRODUCTION DELIVERIES STARTING IN JULY OF 1977. * * * THE FRONT-END
COMMUNICATION CONTROLLER PROPOSED TO THE ARMY WAS FUNCTIONALLY IDENTICAL
TO THE SYSTEM OBSERVED AT NASA EXCEPT THAT THE ULC AND IFUI ARE ON
PRINTED CIRCUIT BOARDS AS OPPOSED TO BEING WIRE-WRAPPED IN THE NASA
UNIT."
ON THE OTHER HAND, THE RECORD CONTAINS AFFIDAVITS OF ARMY PERSONNEL
WHICH STATE THAT ON JANUARY 20, 1977, AND MARCH 17, 1977, TELEFILE
REPRESENTATIVES ACKNOWLEDGED THAT THE FECP-I WAS A NEW MACHINE WHICH WAS
NOT SCHEDULED FOR PRODUCTION UNTIL JULY 1977. MOREOVER, WE NOTE THAT
THE RFP INCLUDED THE MICRO-PROGRAMMABLE FEATURE UNDER THE HARDWARE
REQUIREMENTS.
IN ANY EVENT, WE CANNOT SAY THAT THE EQUIPMENT WHICH TELEFILE
PROPOSED TO FURNISH WAS THE SAME AS THE EQUIPMENT WHICH IT DEMONSTRATED
TO THE ARMY. WHILE IT MAY BE, AS TELEFILE CONTENDS, THAT ELECTRONIC
HARDWARE CAN BE CHANGED FROM WIRE WRAP MANUFACTURE TO PRINTED CIRCUIT
BOARD MANUFACTURE AND REMAIN FUNCTIONALLY THE SAME, IT IS ALSO POSSIBLE,
IN OUR OPINION, THAT SUCH A CHANGE COULD AFFECT PERFORMANCE. THE TWO
DIFFERENT SYSTEMS WILL HAVE SOME DIFFERENCES IN THE METHOD OF
CONSTRUCTION. AS A RESULT, IT IS NOT POSSIBLE TO SAY THAT THE TWO
SYSTEMS WILL BE FUNCTIONALLY IDENTICAL BASED SOLELY ON THE DOCUMENTS
FURNISHED BY TELEFILE. IN ORDER TO DEMONSTRATE THAT THE TWO MODELS ARE
FUNCTIONALLY IDENTICAL, WE BELIEVE IT IS NECESSARY TO CONDUCT BENCHMARK
TESTS ON BOTH MODELS.
WE BELIEVE, THEREFORE, THAT THE PROPOSED "EQUIPMENT, SOFTWARE AND
SYSTEMS CAPABILITY" WERE NOT DEMONSTRATED (BENCHMARKED) AS REQUIRED BY
THE RFP; ALL THAT WAS DEMONSTRATED WAS EQUIPMENT ASSERTED TO HAVE BEEN
"FUNCTIONALLY IDENTICAL" WITH THE PROPOSED EQUIPMENT. WE ARE OF THE
OPINION THAT THE ARMY'S REFUSAL TO ACCEPT THAT THE TCP-64 AND THE FECP-I
WERE ONE AND THE SAME WAS A REASONABLE EXERCISE OF ITS TECHNICAL
JUDGMENT. WE THINK THAT THE ARMY WAS ENTITLED TO HAVE DEMONSTRATED THE
ACTUAL HARDWARE AND SOFTWARE PROPOSED TO BE DELIVERED, AND NOT SOMETHING
ASSERTED TO BE FUNCTIONALLY EQUIVALENT. IT ALSO APPEARS FROM THE RECORD
THAT TELEFILE'S PROPOSED SYSTEM WAS NOT A "STANDARD PRODUCTION MODEL"
SUCCESSFULLY INSTALLED AT "NON-BIDDER LOCATIONS." BURROUGHS CORPORATION,
B-187769, JULY 12, 1977, 77-2 CPD 16.
PROTESTER FURTHER ASSERTS THAT THE ARMY KNEW OR SHOULD HAVE KNOWN
THAT THE TCP-64, NOT THE FECP-I, WAS INSTALLED AT NASA BECAUSE ALL
"GOVERNMENT ADP EQUIPMENT IS COORDINATED THROUGH GSA WITH WHICH THE ARMY
WAS IN CLOSE COMMUNICATION." THUS IT IS CLAIMED THAT THE ARMY KNEW OR
SHOULD HAVE KNOWN THAT THE DEMONSTRATION WAS TO BE PERFORMED ON THE
TCP-64. LIKEWISE IT IS CLAIMED THAT THE ARMY SHOULD HAVE OBJECTED TO
THE DEMONSTRATION ONCE IT ACTUALLY BECAME AWARE OF THE EQUIPMENT TO BE
USED. ACCORDINGLY, THE PROTESTER CLAIMS THAT BY NOT OBJECTING TO THE
OPERATIONAL DEMONSTRATION ON THE TCP-64 THE GOVERNMENT "WAIVED ANY RIGHT
IT MAY HAVE HAD TO A DEMONSTRATION ON THE FECP-I RATHER THAN THE
TCP-64."
WE CANNOT ATTRIBUTE TO THE ARMY THE KNOWLEDGE WHICH GSA MAY HAVE AS
TO THE EQUIPMENT AT THE NASA INSTALLATION SELECTED BY THE PROTESTER FOR
THE INITIAL DEMONSTRATION, PARTICULARLY IN VIEW OF THE ARMY'S DENIAL OF
SUCH KNOWLEDGE. THERE IS NO EVIDENCE IN THE RECORD TO SUGGEST THAT THE
PROTESTER ACTUALLY ADVISED THE ARMY THAT IT INTENDED TO DEMONSTRATE
EQUIPMENT WHICH IT CLAIMED TO BE FUNCTIONALLY EQUIVALENT TO THE
EQUIPMENT PROPOSED, RATHER THAN THE ACTUAL EQUIPMENT PROPOSED. NOR DO
WE AGREE THAT THE ARMY WAIVED ITS RIGHT TO OBJECT TO A DEMONSTRATION OF
THE TCP-64 BECAUSE IT ALLOWED THE DEMONSTRATION TO BE COMPLETED WITHOUT
COMPLAINT. BY DEMONSTRATING ITS EXISTING PRODUCTION MODEL RATHER THAN
THE MODEL IT PROPOSED TO DELIVER, THE PROTESTER SHOULD HAVE KNOWN THAT
THE AGENCY MIGHT ULTIMATELY CONCLUDE THAT THE DEMONSTRATION WAS NOT IN
CONFORMANCE WITH THE RFP REQUIREMENT THAT "ONLY STANDARD PRODUCTION
MODULES MAY BE PROPOSED", AND THAT THE "OPERATIONAL DEMONSTRATION OF ALL
EQUIPMENT * * * PROPOSED" WAS NOT SATISFACTORILY COMPLETED. AS THE ARMY
POINTS OUT, THE EVALUATION TEAM'S ROLE WAS TO OBSERVE THE DEMONSTRATION
AND TO REPORT BACK TO THE CONTRACTING OFFICER THE RESULTS OF THEIR
OBSERVATION.
THE PROTESTER ALSO CLAIMS THAT BECAUSE ITS WRITTEN PROPOSAL WAS FOUND
TO BE TECHNICALLY ACCEPTABLE PRIOR TO THE DEMONSTRATION (A FACT WHICH IS
NOT CONTROVERTED), IT SHOULD NOT THEREAFTER HAVE BEEN EXCLUDED FROM THE
COMPETITIVE RANGE AS "NONRESPONSIVE (TECHNICALLY DEFICIENT) BECAUSE OF
ANY ASSERTED DEFICIENCIES IN THE DEMONSTRATION. THE PROTESTER CITES
LINOLEX SYSTEMS, INC., ET AL., 53 COMP.GEN. 895 (1974), 74-1 CPD 296 AND
47 COMP.GEN. 29 (1967) IN SUPPORT OF THAT PROPOSITION.
WE BELIEVE THAT THE CITED CASES DO NOT STAND FOR THE PROPOSITION
URGED. LINOLEX, SUPRA, INVOLVED A BENCHMARK TEST IN WHICH THE OFFEROR
USED ITS SUPPLIER'S EMPLOYEES RATHER THAN ITS OWN PERSONNEL TO PERFORM
THE DEMONSTRATION TEST. THE AGENCY STATED THAT THE PURPOSE OF THE TEST
WAS TO VALIDATE EACH PROPOSAL BY SHOWING HOW FAMILIAR THE OFFEROR WAS
WITH THE EQUIPMENT IT PROPOSED TO FURNISH AS WELL AS TO DEMONSTRATE THE
PERFORMANCE OF THE EQUIPMENT. WE CONCLUDED THAT THE PURPOSE OF THE TEST
AS STATED IN THE RFP WAS SUSCEPTIBLE TO THE OFFEROR'S INTERPRETATION AND
THAT THEREFORE THE OFFEROR SHOULD BE GIVEN THE OPPORTUNITY TO PERFORM
THE TEST WITH ITS OWN EMPLOYEES. IN 47 COMP.GEN. 29, SUPRA, A PROTEST
INVOLVING THE PROCUREMENT OF SUBSTANTIAL AMOUNTS OF COMPUTER EQUIPMENT,
THE PROTESTER WAS EXCLUDED FROM THE COMPETITIVE RANGE FOR FAILURE TO
PASS A 200 HOUR "OPERATIONAL USE TIME" TEST (ONE OF THE BENCHMARK TESTS
REQUIRED). THE EXCLUSION OF THE PROTESTER (HONEYWELL) FROM THE
COMPETITIVE RANGE LEFT ONLY ONE OFFEROR IN THE COMPETITION WITH A PRICE
PREMIUM OVER HONEYWELL OF APPROXIMATELY $60,000,000. WE STATED:
" * * * WHEN THE BENCHMARK TEST LEFT ONLY ONE PROPOSER AS AN ELIGIBLE
CONTRACTOR, WE DO NOT BELIEVE THE 200 HOUR BENCHMARK TEST, WHICH WAS THE
ONLY TEST HONEYWELL FAILED, SHOULD HAVE BEEN CONSIDERED DETERMINATIVE OF
WHAT CONSTITUTED A 'COMPETITIVE' RANGE WITHOUT REGARD TO PRICE."
IN BOTH CASES THE EQUIPMENT PROPOSED WAS THE EQUIPMENT DEMONSTRATED,
WHICH WAS NOT THE CASE HERE. HERE, WE BELIEVE THE EXCLUSION OF TELEFILE
FROM THE COMPETITIVE RANGE, AS DISCUSSED ABOVE, FOR FAILURE TO
DEMONSTRATE THE PROPOSED EQUIPMENT HAD A REASONABLE BASIS.
THE PROTESTER ASSERTS, HOWEVER, THAT THE ARMY WAS MOTIVATED TO
EXCLUDE TELEFILE FROM FURTHER NEGOTIATIONS BECAUSE OF ITS "DESIRE FOR
MORE COMPLEX AND INHERENTLY MORE EXPENSIVE EQUIPMENT," POINTING TO
CERTAIN "INCONSISTENCIES" IN THE ARMY'S STATEMENTS IN THE COMTEN
PROTEST, SUPRA, VIS-A-VIS ITS STATEMENTS MADE IN THIS PROTEST. WE DO
NOT BELIEVE THE "INCONSISTENCIES" ASSERTED ARE SIGNIFICANT AND
CONSEQUENTLY THEY NEED NOT BE DETAILED HERE. MOREOVER, WE NOTE THAT
NONE OF THE ASSERTED "INCONSISTENCIES", EVEN IF ACCEPTED AS SUCH, WOULD
PROVE THE ALLEGED MOTIVE OR EVEN EXPLAIN WHY SUCH MOTIVE EXISTED.
THEREFORE, WHERE, AS HERE, THE RECORD REASONABLY SUPPORTS THAT AGENCY'S
ACTIONS, MERE ALLEGATIONS OF A BIASED EVALUATION PROVIDES NO BASIS FOR
OUR OFFICE TO INTERFERE WITH THE AGENCY'S DETERMINATION THAT A PROPOSAL
IS UNACCEPTABLE AND OUTSIDE THE COMPETITIVE RANGE. JOANELL
LABORATORIES, INCORPORATED, 56 COMP.GEN. 291 (1977), 77-1 CPD 51.
THE PROTESTER ALSO CLAIMS THAT THE RFP CONTAINS "LATENT AMBIGUITIES"
REQUIRING CANCELLATION AND RESOLICITATION OF THE REQUIREMENT IF WE ARE
UNABLE TO AFFIRM ITS POSITION WITH REGARD TO THE EQUIPMENT DEMONSTRATED.
ALTHOUGH "NUMEROUS LATENT AMBIGUITIES" ARE CLAIMED, ONLY TWO ARE
ASSERTED-- (1) THE "FAILURE TO IDENTIFY SPECIFICATION REQUIREMENTS AS
MANDATORY OR NONMANDATORY," AND (2) THE DIFFERENCES BETWEEN THE
OPERATIONAL DEMONSTRATION CRITERIA PROVIDED TO OFFERORS AND AS USED BY
THE IN-HOUSE EVALUATION TEAM.
OUR EXAMINATION OF THE RFP REVEALS NO SUCH AMBIGUITIES. THE
SPECIFICATIONS FOR BOTH THE HARDWARE AND THE SOFTWARE ARE CLEARLY LISTED
WITH THE PREFACE "REQUIREMENTS". WE DO NOT BELIEVE THE WORD "MANDATORY"
IS ESSENTIAL FOR ANY OFFEROR'S UNDERSTANDING THAT THE LISTED FEATURES
AND CAPABILITIES WERE TO BE INCLUDED IN THE HARDWARE AND SOFTWARE TO BE
FURNISHED.
THE PROTESTER NONETHELESS CLAIMS THAT IT PROPOSED TO INSTALL THE
FRONT-END POLLING FEATURE LISTED IN THE SPECIFICATION 12 MONTHS AFTER
AWARD OF THE CONTRACT WITHOUT INITIAL OBJECTION BY THE ARMY, AND THAT
THE ARMY'S LATER INDICATION THAT SUCH DELIVERY MIGHT BE NEGOTIABLE,
RENDERED THE SPECIFICATION AMBIGUOUS. WE DO NO BELIEVE THAT THE
PROTESTER'S UNILATERAL ACT, E.G., PROPOSING TO DELAY THE DELIVERY OF A
REQUIRED FEATURE TO BE INCLUDED IN THE HARDWARE, CHANGES THE PLAIN
MEANING OF THE SPECIFICATIONS THAT SUCH FEATURE IS "MANDATORY", NOR DO
WE BELIEVE THE ARMY'S POTENTIAL WILLINGNESS TO NEGOTIATE THAT POINT
OPERATED TO THE PREJUDICE OF TELEFILE. MOREOVER, WE CANNOT CONCLUDE
THAT THE REQUIREMENT TO DEMONSTRATE THAT FEATURE ON THE PROPOSED
HARDWARE IN THE FACE OF THE ACCEPTABLE WRITTEN PROPOSAL OFFERING LATER
DELIVERY CHANGED THE MANDATORY NATURE OF THE REQUIREMENT. LIKEWISE,
TELEFILE'S CLAIM OF AMBIGUITY RELATING TO INSTRUCTIONS TO THE TECHNICAL
EVALUATORS DID NOT CREATE AN AMBIGUITY IN THE SPECIFICATIONS, NOR DID
THEY OPERATE TO THE PREJUDICE OF TELEFILE. CONSEQUENTLY, IN OUR VIEW,
THE RECORD DOES NOT SUPPORT A FINDING OF SPECIFICATION AMBIGUITY.
INASMUCH AS WE HAVE CONCLUDED THAT THE PROTESTER FAILED TO
DEMONSTRATE THE EQUIPMENT IT PROPOSED, WE NEED NOT CONSIDER ANY OF THE
MATTERS RAISED WHICH RELATE TO THE QUESTION OF WHETHER OR NOT THE
DEMONSTRATED EQUIPMENT PASSED THE DEMONSTRATION TEST.
THE PROTEST IS DENIED.
B-189264, OCTOBER 28, 1977
HEADNOTES - UNAVAILABLE
1. REJECTION OF LOW BID FOR FAILURE TO ACKNOWLEDGE MATERIAL
AMENDMENT TO SOLICITATION IS PROPER, ALTHOUGH BIDDER NEVER RECEIVED
AMENDMENT, SINCE FAILURE TO RECEIVE AMENDMENT WAS NOT RESULT OF
CONSCIOUS AND DELIBERATE EFFORT BY CONTRACTING AGENCY TO EXCLUDE BIDDER
FROM COMPETITION.
2. CONTRACTING AGENCY IS NOT INSURER OF DELIVERY OF PROCUREMENT
DOCUMENTS TO PROSPECTIVE BIDDERS. BIDDER, NOT AGENCY, BEARS RISK OF
NONRECEIPT OF AMENDMENTS TO SOLICITATION.
3. AMENDMENT IMPOSING ADDITIONAL LIABILITY AND COSTS ON BIDDER WHICH
WERE NOT CONTAINED IN ORIGINAL SOLICITATION CONSTITUTES MATERIAL CHANGE.
FAILURE TO ACKNOLWEDGE AMENDMENT THEREFORE CANNOT BE WAIVED AND BID
MUST BE REJECTED AS NONRESPONSIVE TO AMENDED SOLICITATION.
G & H AIRCRAFT:
THE DEPARTMENT OF AGRICULTURE, FOREST SERVICE (FOREST SERVICE), HAS
REQUESTED AN ADVANCE DECISION CONCERNING THE AWARD OF AN INDEFINITE
QUANTITIES CONTRACT TO PROVIDE LIGHT AIRCRAFT TRANSPORTATION AND
RECONNAISSANCE SERVICES, RESULTING FROM INVITATION FOR BIDS (IFB) NO.
R5-77-37, ISSUED BY THE FOREST SERVICE ON MARCH 21, 1977. THE FOREST
SERVICE ASKS WHETHER THE APPARENT LOW BID WAS PROPERLY REJECTED AS
NONRESPONSIVE BECAUSE THE BIDDER FAILED TO ACKNOWLEDGE AN AMENDMENT TO
THE SOLICITATION.
THREE AMENDMENTS WERE ISSUED PRIOR TO BID OPENING. THE INITIAL
AMENDMENT, ISSUED ON MARCH 29, 1977, CHANGED THE TYPE OF SERVICE, HOURLY
STANDBY RATE, AIRCRAFT INSPECTION COST PROVISIONS, AND MEASUREMENT OF
STANDBY TIME, AND ADVISED AS FOLLOWS:
"OFFERERS ARE REQUIRED TO ACKNOWLEDGE RECEIPT OF THIS AMENDMENT PRIOR
TO BID OPENING. IF YOU FAIL TO DO SO, YOUR BID WILL BE CONSIDERED
NONRESPONSIVE AND WILL NOT BE CONSIDERED FOR AWARD."
A SECOND AMENDMENT, EFFECTIVE APRIL 1, 1977, ADDED TWO ITEMS TO THE
SCHEDULE OF WORK, BUT REQUIRED ACKNOWLEDGMENT ONLY IF THE BIDDER
SUBMITTED A BID ON THE NEWLY ADDED ITEMS. ON APRIL 4, 1977, THE THIRD
AMENDMENT, WHICH DELETED AN ITEM FROM THE SCHEDULE, WAS ISSUED; NO
ACKNOWLEDGEMENT WAS REQUIRED.
THE FOREST SERVICE RECEIVED 25 BIDS AT THE BID OPENING ON APRIL 12,
1977. G & H AIRCRAFT (G & H) WAS THE APPARENT LOW BIDDER ON ITEMS NOS. 1
& 2 (TRANSPORT - EL MONTE AIRPORT), AND EXECUTIVE AVIATION WAS THE
SECOND LOW BIDDER ON THESE ITEMS. HOWEVER, BY LETTER DATED APRIL 29,
1977, THE FOREST SERVICE NOTIFIED G & H THAT ITS BID WAS NONRESPONSIVE
AND COULD NOT BE CONSIDERED FOR AWARD BECAUSE THE FIRM FAILED TO
ACKNOWLEDGE RECEIPT OF AN AMENDMENT TO THE IFB. ALTHOUGH THE AMENDMENT
WAS INITIALLY ERRONEOUSLY REFERRED TO AS AMENDMENT NO. 2 (APRIL 1,
1977), THE AMENDMENT IN QUESTION IS, IN FACT, AMENDMENT NO. 1 (MARCH 29,
1977).
G & H PROTESTED THE REJECTION OF ITS BID BY LETTER TO THE FOREST
SERVICE DATED MAY 2, 1977, ON THE GROUNDS THAT THE FIRM WAS THE LOW
BIDDER AND COULD NOT ACKNOWLEDGE THE AMENDMENT BECAUSE NO AMENDMENTS HAD
BEEN RECEIVED TO DATE. THE FOREST SERVICE DENIED THE PROTEST BY LETTER
TO G & H DATED MAY 10, 1977, WHICH STATES, IN PERTINENT PART, AS
FOLLOWS:
"OUR RECORDS SHOW THAT SOLICITATION R5-77-37 AND EACH AMENDMENT
THERETO WERE MAILED TO G & H AIRCRAFT. WE ARE NOT OBLIGATED TO NOR DO
WE USE CERTIFIED OR REGISTERED MAIL FOR SUCH MAILINGS, THEREFORE WE HAVE
NO WAY OF KNOWING IF THE AMENDMENTS WERE LOST IN THE MAIL."
IN THIS REGARD, WE HAVE HELD, CONCERNING THE FAILURE TO RECEIVE AN
AMENDMENT, THAT THE PROCURING ACTIVITY IS NOT AN INSURER OF DELIVERY OF
BIDDING DOCUMENTS TO PROSPECTIVE BIDDERS. THE BIDDER BEARS THE RISK OF
NONRECEIPT OF SOLICITATIONS AND AMENDMENTS. 52 COMP.GEN. 281, 283
(1972); A BRINDIS COMPANY, INC., B-187041, DECEMBER 9, 1976, 76-2 CPD
477.
THE GENERAL RULE REGARDING THE EFFECT OF A BIDDER'S FAILURE TO
ACKNOWLEDGE AN AMENDMENT TO AN IFB IS THAT SUCH FAILURE CANNOT BE WAIVED
IF THE AMENDMENT AFFECTS THE PRICE, QUALITY OR DELIVERY OF THE
PROCUREMENT IN OTHER THAN A "TRIVIAL OR NEGLIGIBLE" MANNER. FEDERAL
PROCUREMENT REGULATIONS SEC. 1-2.405(D)(2) (1964) ED. CIRC. 1); MILLS
MANUFACTURING CORPORATION, B-188672, JUNE 15, 1977, 77-1 CPD 430.
THUS, THE INITIAL ISSUE FOR RESOLUTION IS WHETHER THE MARCH 29
AMENDMENT INCLUDED ANY MATERIAL CHANGE. CHANGES EFFECTED BY THE
AMENDMENT CONCERNING THE TYPE OF SERVICE, STANDBY RATE, AND STANDBY TIME
MEASUREMENT APPEAR TO DECREASE THE SCOPE OF WORK REQUIRED. BECAUSE THE
DECREASED WORK WOULD PRESUMABLY RESULT IN A REDUCTION IN THE BID PRICE
AND SINCE G & H WAS ALREADY LOW, WE CANNOT CONCLUDE THAT THESE CHANGES
WOULD AFFECT THE PRICE OF THE PROCUREMENT IN OTHER THAN A "TRIVIAL OR
NEGLIGIBLE" MANNER. THE AMENDMENT, HOWEVER, ALSO MODIFIES THE AIRCRAFT
INSPECTION COST PROVISION, ARTICLE 311, TO REDUCE THE GOVERNMENT'S
LIABILITY AND COSTS. THIS CHANGE IS MATERIAL AND, ABSENT
ACKNOWLEDGEMENT OF THE AMENDMENT, THE PROTESTER WOULD NOT OTHERWISE BE
BOUND TO ASSUME THE ADDITIONAL RESPONSIBILITY AND RESULTANT COSTS OF
INSPECTION WHICH WERE NOT IMPOSED BY THE ORIGINAL SOLICITATION. MILLS
MANUFACTURING CORPORATION, SUPRA.
IF A BIDDER FAILS TO RECEIVE AND ACKNOWLEDGE A MATERIAL AMENDMENT TO
A SOLICITATION, THE BID MUST BE REJECTED AS NONRESPONSIVE UNLESS FAILURE
TO DO SO IS THE RESULT OF A CONSCIOUS AND DELIBERATE EFFORT BY THE
CONTRACTING AGENCY TO EXCLUDE THE BIDDER FROM PARTICIPATION IN THE
COMPETITION. 40 COMP.GEN. 126, 128 (1960); TOROTRON CORPORATION,
B-182418, JANUARY 30, 1975, 75-1 CPD 69; PORTER CONTRACTING COMPANY, 55
COMP.GEN. 615, 616 (1976), 76-1 CPD 2. BASED ON THE RECORD, WE HAVE NO
REASON TO BELIEVE THAT G & H FAILED TO RECEIVE THE AMENDMENTS DUE TO ANY
DELIBERATE EFFORT ON THE PART OF THE FOREST SERVICE TO EXCLUDE THE FIRM
FROM COMPETITION.
FOR THE AFOREMENTIONED REASONS, WE CONCLUDE THAT THE G & H BID WAS
PROPERLY REJECTED AS NONRESPONSIVE.
B-189950, OCTOBER 28, 1977
HEADNOTES - UNAVAILABLE
PROTEST CHALLENGING CONTRACTING OFFICER'S AFFIRMATIVE DETERMINATION
OF PROSPECTIVE CONTRACTOR'S RESPONSIBILITY WILL NOT BE CONSIDERED WHERE
FRAUD OR MISAPPLICATION OF DEFINITIVE RESPONSIBILITY CRITERIA IS NOT
INVOLVED.
LESLIE BROOKS & ASSOCIATES, INC.:
LESLIE BROOKS & ASSOCIATES, INC. (LESLIE BROOKS), PROTESTS THE AWARD
OF A CONTRACT BY THE DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE TO
ANOTHER OFFEROR UNDER RFP 105-77-6001. TO BE MORE SPECIFIC, LESLIE
BROOKS PROTESTS IN SUBSTANCE THAT THE AWARDEE WAS NOT LISTED IN THE
TULSA TELEPHONE DIRECTORY AT THE TIME THE CONTRACT WAS AWARDED.
FURTHER, THE AWARDEE IS BASICALLY A CERTIFIED PUBLIC ACCOUNTANT WITH
LITTLE BACKGROUND IN THE FIELD OF MANAGEMENT CONSULTING. LESLIE BROOKS,
IN EFFECT, CHALLENGES THE CONTRACTING OFFICER'S AFFIRMATIVE
DETERMINATION OF AN OFFEROR'S RESPONSIBILITY.
AS A GENERAL RULE, WE DO NOT CONSIDER PROTESTS CONCERNING
DETERMINATIONS THAT PARTICULAR PROSPECTIVE CONTRACTORS ARE RESPONSIBLE.
AFFIRMATIVE DETERMINATIONS OF RESPONSIBILITY ARE LARGELY A MATTER OF
SUBJECTIVE JUDGMENT WITHIN THE SOUND DISCRETION OF CONTRACTING AGENCY
OFFICIALS, WHO MUST BEAR THE BRUNT OF ANY DIFFICULTIES EXPERIENCED BY
REASON OF A CONTRACTOR'S INABILITY TO PERFORM. WE WILL REVIEW SUCH
DETERMINATIONS ONLY IN CERTAIN LIMITED CIRCUMSTANCES-- IF THERE IS A
SHOWING OF FRAUD BY THE AGENCY, OR WHERE IT IS ALLEGED THAT DEFINITIVE
RESPONSIBILITY CRITERIA SET FORTH IN THE SOLICITATION WERE NOT PROPERLY
APPLIED BY THE AGENCY.
SINCE NO SHOWING OF FRAUD OR ALLEGED MISAPPLICATION OF DEFINITIVE
RESPONSIBILITY CRITERIA IS INVOLVED IN THE PRESENT CASE, THE PROTESTER'S
OBJECTION TO THE AFFIRMATIVE DETERMINATION OF RESPONSIBILITY WILL NOT BE
CONSIDERED. SOUTHERN METHODIST UNIVERSITY, B-187737, APRIL 27, 1977,
77-1 CPD 289.
B-190237, OCTOBER 28, 1977
HEADNOTES - UNAVAILABLE
PROTEST THAT THREE LOWER BIDDERS ARE NOT CAPBLE OF PERFORMING
CONTRACT AS REQUIRED IS DISMISSED, SINCE DETERMINATION OF BIDDER'S
RESPONSIBILITY IS FOR CONTRACTING AGENCY. GAO REVIEWS SUCH
DETERMINATION ONLY UNDER CIRCUMSTANCES NOT APPLICABLE HERE.
DAMUTH-TRANE SERVICE AGENCY, INC.:
DAMUTH-TRANE SERVICE AGENCY, INC., PROTESTS THAT THE THREE LOW
BIDDERS UNDER SOLICITATION NO. N62470-77-B02155, ISSUED BY THE
DEPARTMENT OF THE NAVY FOR THE MAINTENANCE AND SERVICE OF
AIR-CONDITIONING AND HEATING SYSTEMS, LACK THE EXPERIENCE AND FACILITIES
TO PROVIDE THE REQUIRED SERVICES. DAMUTH-TRANE SUGGESTS THAT, TO
"VERIFY CONFORMANCE," CERTAIN INFORMATION BE OBTAINED FROM THOSE FIRMS
CONCERNING THEIR BACKGROUNDS AND CAPABILITIES, WHICH ALLEGEDLY WILL
DEMONSTRATE THE MERIT OF THE PROTEST. DAMUTH-TRANE CONTENDS THAT ALL
THREE SHOULD THEREFORE BE REJECTED AS "NON-RESPONSIVE."
THE ABILITY TO PERFORM IN ACCORDANCE WITH THE TERMS OF A CONTRACT
INVOLVES "RESPONSIBILITY," NOT "RESPONSIVENESS." SEE CITY AMBUANCE OF
ALABAMA, INC., B-187964, JANUARY 13, 1977, 77-1 CPD 29; 52 COMP.GEN.
389 (1972); ARMED SERVICES PROCUREMENT REGULATION SECS. 1-902 AND
1-903 (1976 ED.). THE DETERMINATION WHETHER A BIDDER IS RESPONSIBLE IS
A MATTER OF SUBJECTIVE JUDGMENT WITHIN THE SOUND DISCRETION OF
CONTRACTING AGENCY OFFICIALS, WHO MUST BEAR THE BRUNT OF ANY
DIFFICULTIES EXPERIENCED BY REASON OF A CONTRACTOR'S INABILITY TO
PERFORM. IN THIS CONNECTION, ALTHOUGH OUR OFFICE WILL CONSIDER A
PROTEST CONCERNING A DETERMINATION OR NONRESPONSIBILITY IN ORDER TO
PROVIDE ASSURANCE AGAINST THE ARBITRARY REJECTION OF A BID, WE CONSIDER
A PROTEST CONCERNING A DETERMINATION THAT A PARTICULAR PROSPECTIVE
CONTRACTOR IS RESPONSIBLY ONLY IF THERE IS A SHOWING OF FRAUD BY THE
AGENCY, OR IT IS ALLEGED THAT DEFINITIVE RESPONSIBILITY CRITERIA SET
FORTH IN THE SOLICITATION WERE NOT PROPERLY APPLIED. SEE GENERALLY,
ENSEC SERVICE CORPORATION, 55 COMP.GEN. 494 (1975), 75-2 CPD 341.
THE PROTEST IS DISMISSED.
B-190450, OCTOBER 28, 1977
HEADNOTES - UNAVAILABLE
GAO WILL NOT REVIEW DETERMINATION OF NONRESPONSIBILITY OF SMALL
BUSINESS BIDDER WHERE MATTER WAS REFERRED TO SBA, BECAUSE DISPOSITIONS
OF SBA WITH REGARD TO MATTERS OF RESPONSIBILITY ARE FINAL.
IKARD MANUFACTURING CO.:
IKARD MANUFACTURING CO. (IKARD), A SMALL BUSINESS CONCERN, PROTESTS A
DETERMINATION OF NONRESPONSIBILITY CONCERNING ITS FIRM, UNDER INVITATION
FOR BIDS (IFB) NO. DAAH01-77-B-0404 ISSUED BY THE U.S. ARMY MISSILE
MATERIAL READINESS COMMAND (ARMY). THE IFB CALLED FOR BIDS TO PROVIDE
OPTICAL FILTERS.
WE HAVE BEEN INFORMED BY THE ARMY THAT THE CONTRACTING OFFICER MADE A
DETERMINATION OF NEGATIVE RESPONISIBILITY WITH REGARD TO IKARD AND THE
MATTER WAS THEN REFERRED TO THE SMALL BUSINESS ADMINISTRATION (SBA) FOR
FINAL DISPOSITION. UNDER 15 U.S.C. 637(B)(7) (1970) AS AMENDED BY PUB.
L. 95-89, SEC. 501, 91 STAT. 561, AUGUST 4, 1977, THE SBA HAS AUTHORITY
TO CERTIFY TO GOVERNMENT PROCUREMENT OFFICERS WITH RESPECT TO ALL
ELEMENTS OF RESPONSIBILITY, "INCLUDING, BUT NOT LIMITED TO, CAPABILITY,
COMPETENCY, CAPACITY, CREDIT, INTEGRITY, PERSEVERANCE, AND TENACITY OF
ANY SMALL BUSINESS CONCERN * * * TO RECEIVE AND PERFORM A SPECIFIC
GOVERNMENT CONTRACT." THIS OFFICE DOES NOT REVIEW SBA DETERMINATIONS OR
REQUIRE THE SBA TO ISSUE CERTIFICATES OF COMPETENCY BECAUSE, BY LAW THE
DISPOSITION OF THE SBA ON THE MATTER IS FINAL.
ACCORDINGLY, THIS PROTEST IS DISMISSED.
B-187733, OCT 27, 1977
HEADNOTES - UNAVAILABLE
IMMIGRATION AND NATURALIZATION SERVICE (INS) MAY PAY FOR POLICE
PROTECTION SERVICES PROVIDED BY CITY FOR SPECIAL EVENT SPONSORED BY INS,
WHERE USE OF AND PAYMENT FOR POLICE PROTECTION SERVICE IS A CONDITION OF
RENTAL OF BUILDING CONTROLLED BY CITY. WHETHER INS MAY PAY FOR POLICE
DETAIL FOR SEPARATE CEREMONY AT PRIVATELY-CONTROLLED BUILDING DEPENDS ON
WHETHER CHARGE WOULD HAVE BEEN ASSESSED AGAINST PRIVATE CITIZEN FOR SAME
SERVICES. IF INS DETERMINES ADMINISTRATIVELY THAT IT WOULD, THEN CHARGE
MAY BE PAID.
UNITED STATES IMMIGRATION AND NATURALIZATION SERVICE - PAYMENT FOR
POLICE PROTECTION SERVICES:
THIS IS IN RESPONSE TO A REQUEST FOR AN ADVERSE DECISION FROM AN
AUTHORIZED CERTIFYING OFFICER, UNITED STATES DEPARTMENT OF JUSTICE, INS,
AS TO THE LEGALITY OF PAYING FOR SECURITY SERVICES FURNISHED BY THE
BOSTON POLICE DEPARTMENT.
ON JULY 5 AND SEPTEMBER 17, 1976, "BICENTENNIAL FINAL HEARINGS" WERE
HELD AT THE OLD NORTH CHURCH AND FANEUIL HALL, HISTORIC SITES IN BOSTON,
MASSACHUSETTS. THESE HEARINGS WERE FOR THE PURPOSE OF ADMITTING ALIENS
TO CITIZENSHIP BUT WERE EVIDENTLY ALSO INTENDED TO COMMEMORATE THE
BICENTENNIAL. ACCORDING TO A MEMORANDUM FROM THE DISTRICT DIRECTOR,
INS, THE OLD NORTH CHURCH--
" * * * IS LOCATED IN AN ANCIENT, CONGESTED AREA OF NARROW STREETS
WITH CROWD-CONTROL AND POSSIBLE SECURITY PROBLEMS. THE BOSTON POLICE
DEPARTMENT HAS SUGGESTED THE USE OF TWO PATROLMEN FOR SECURITY PURPOSES
AT A RATE OF $36.00 PER MAN. * * * "
ALSO ACCORDING TO THE MEMORANDUM, THE BOSTON REAL PROPERTY
DEPARTMENT, WHICH CONTROLS THE USE OF FANEUIL HALL, STATED THAT A BOSTON
POLICE DETAIL MUST BE UTILIZED AS A CONDITION OF RENTING THE PREMISES.
THE BOSTON POLICE DEPARTMENT HAS SUBMITTED INVOICES TO INS FOR $36
AND $108 FOR THESE SERVICES, CHARACTERIZING THEM AS "PRICATE DETAIL
SERVICE." THE CERTIFYING OFFICER QUESTIONS THE PROPRIETY OF PAYMENT
BECAUSE OF OUR DECISIONS IN 26 COMP.GEN. 382 (1946) AND 30 COMP.GEN. 376
(1951).
THIS OFFICE HAS CONSISTENTLY HELD THAT A CHARGE AGAINST APPROPRIATED
FUNDS FOR FIREFIGHTING SERVICES RENDERED BY A MUNICIPALITY IS GENERALLY
PRECLUDED WHERE THERE IS NO LEGAL OBLIGATION UPON THE UNITED STATES TO
PAY FOR SUCH SERVICES. THIS IS BASED UPON THE PREMISE THAT A
MUNICIPALITY IS REQUIRED BY LAW TO RENDER FIRE PROTECTION OR
FIREFIGHTING SERVICES TO PROPERTY WITHIN ITS LIMITS, WITHOUT COST TO THE
PROPERTY OWNERS. SUCH A DUTY EXTENDS TO PROTECTING THE PROPERTY OF THE
UNITED STATES LOCATED WITHIN SUCH LIMITS AND, CONSEQUENTLY, SINCE THE
GOVERNMENT IS LEGALLY ENTITLED TO FIRE PROTECTION OR FIREFIGHTING
SERVICES THERE IS NO AUTHORITY TO CHARGE APPROPRIATED FUNDS WITH THE
COST THEREOF. SEE 24 COMP.GEN. 599 (1945); 26 ID. 382 (1946); 53 ID.
410 (1973).
THE RATIONALE OF THE DECISIONS CITED ABOVE CONCERNING FIREFIGHTING
SERVICES APPLIES TO POLICE PROTECTION. SEE 49 COMP.GEN. 284, 286-87
(1969). THE BOSTON POLICE DEPARTMENT COULD NOT LEVY DIRECT CHARGES ON
THE INS FOR ORDINARY POLICE PROTECTION SERVICES PROVIDED WITHIN ITS AREA
OF JURISDICTION. ID. AT 287. A LOCAL GOVERNMENT IN PROVIDING THESE
SERVICES IS PERFORMING A GOVERNMENTAL FUNCTION, FOR WHICH PAYMENT BY A
FEDERAL AGENCY, ABSENT STATUTORY AUTHORITY, IS NOT PERMISSIBLE.
THE CASES INVOLVING POLICE AND FIRE PROTECTION REFER TO ORDINARY
SERVICES PROVIDED ON AN EVERYDAY BASIS. IT IS CLEAR THAT A DIRECT
CHARGE COULD NOT BE ASSESSED AGAINST THE FEDERAL GOVERNMENT FOR SERVICES
RENDERED BY THE CITY FIRE DEPARTMENT IN EXTINGUISHING A FIRE IN A
FEDERAL FACILITY WITHIN THE CITY LIMITS. SIMILARLY IF A CRIME WERE
BEING COMMITTED ON FEDERAL PROPERTY, THE CITY POLICE WOULD NOT BE
EXPECTED TO STAND BY AND OBSERVE A CRIME IN PROGRESS. THESE SITUATIONS
INVOLVE ORDINARY PROTECTIVE SERVICES, GOVERNMENTAL IN NATURE, FOR WHICH
PAYMENT BY A FEDERAL AGENCY IS NOT PERMISSIBLE. HOWEVER, WHERE A CHARGE
IS IMPOSED FOR MUNICIPAL SERVICES, MEASURED BY THE VALUE OF THE SERVICE
PROVIDED, AND ALL USERS OF THE SERVICE ARE LIABLE FOR PAYMENT OF THE
CHARGE, THERE IS NO OBJECTION TO PAYMENT BY THE UNITED STATES ON A
QUANTUM MERUIT BASIS. 29 COMP.GEN. 120 (1949); 34 ID. 398 (1955).
IN THIS CASE, THEREFORE, PAYMENT MAY NOT LAWFULLY BE MADE IF THE
SERVICES PROVIDED BY THE POLICE DEPARTMENT OF THE CITY OF BOSTON ARE
AMONG THOSE NORMAL POLICE SERVICES WHICH ARE FINANCED BY TAX REVENUES
AND WHICH ARE REQUIRED TO BE PROVIDED TO ALL RESIDENTS OF THE CITY. IF,
ON THE OTHER HAND, THE SERVICES IN QUESTION ARE NOT AMONG THOSE WHICH
THE CITY IS REQUIRED TO PROVIDE, AND THE CHARGE DOES NOT SINGLE OUT THE
UNITED STATES BUT WOULD BE IMPOSED ON ANYONE, ON A QUANTUM MERUIT BASIS,
FOR LIKE SERVICES, THEN THE INVOICES MAY BE PAID.
APPLYING THESE RULES TO THE CASE AT HAND, THE INVOICE FOR SERVICES AT
FANEUIL HALL MAY BE PAID. IN THE CASE OF FANEUIL HALL, THE DISTRICT
DIRECTOR'S MEMORANDUM STATES THAT THE CONTROLLING LOCAL AGENCY, THE
BOSTON REAL PROPERTY DEPARTMENT, MADE IT A CONDITION OF RENTAL OF
FANEUIL HALL " * * * THAT A BOSTON POLICE DETAIL MUST BE UTILIZED * * *
." ASSUMING THAT THE SAME CONDITION WOULD BE REQUIRED OF ANY RENTER, AND
THAT RENTAL OF THE BUILDING WAS AN AUTHORIZED ACTIVITY OF INS, PAYMENT
FOR THE POLICE DETAIL MAY BE CONSIDERED TO BE AUTHORIZED AS, IN EFFECT,
A PART OF THE NECESSARY EXPENSE OF THE RENTAL.
WITH RESPECT TO THE OLD NORTH CHURCH, THE USE OF A SECURITY DETAIL
WAS NOT A CONDITION FOR USE OF THE BUILDING. BECAUSE OF POSSIBLE
CROWD-CONTROL AND SECURITY PROBLEMS AT THAT LOCATION, INS EVIDENTLY
DECIDED TO RETAIN TWO PATROLMEN FOR SECURITY PURPOSES. THE INVOICE, AS
NOTED ABOVE, IS CAPTIONED "PRIVATE DETAIL SERVICE OF THE BOSTON POLICE
DEPARTMENT," SUGGESTING AT LEAST THAT THE SERVICE PROVIDED MAY BE
DIFFERENT IN CHARACTER FROM THE ORDINARY POLICE SERVICES WHICH THE CITY
HAS A DUTY TO PROVIDE. HOWEVER, WE ARE UNABLE TO DETERMINE FROM THE
RECORD BEFORE US WHETHER OR NOT THAT IS THE CASE. BASED ON THE
PRINCIPLES SET FORTH ABOVE, THE VOUCHER FOR SERVICES AT THE OLD NORTH
CHURCH MAY BE PAID IF INS DETERMINES ADMINISTRATIVELY THAT THE SAME
CHARGE WOULD HAVE BEEN IMPOSED ON ANY CITIZEN IN LIKE CIRCUMSTANCES.
B-187359, OCTOBER 26, 1977
HEADNOTES - UNAVAILABLE
GAO WILL NOT CONSIDER COMPLAINTS FILED AGAINST CONTRACT AWARD ACTION
BY GRANTEE PURSUANT TO URBAN MASS TRANSPORTATION ADMINISTRATION GRANT
WHERE MATTER IS BEFORE COURT OF COMPETENT JURISDICTION AND COURT HAS NOT
EXPRESSED PARTICULAR INTEREST IN GAO'S VIEWS.
ASSOCIATED GENERAL CONTRACTORS OF MASSACHUSETTS, INC. AND
CONSTRUCTION INDUSTRIES OF MASSACHUSETTS, INC.; PERINI CORPORATION AND
KING ERECTORS, INC., A JOINT VENTURE:
IN APRIL 1977, THE MASSACHUSETTS BAY TRANSPORTATION AUTHORITY (MBTA)
ISSUED AN INVITATION FOR BIDS FOR MBTA CONTRACT NO. SW-101(R) FOR
GENERAL TRANSIT CONSTRUCTION OF THE SOUTH COVER TUNNEL IN BOSTON. THE
CONSTRUCTION IS BEING CONDUCTED PURSUANT TO AN 80 PERCENT GRANT AWARDED
BY THE URBAN MASS TRANSIT ADMINISTRATION (UMTA), UNITED STATED
DEPARTMENT OF TRANSPORTATION, UNDER THE URBAN MASS TRANSPORTATION ACT,
49 U.S.C. 1601-1612 (1970 SUPP. V). THE CONTRACT FOR THE PROJECT
CONTAINS A SPECIAL "MINORITY CONTRACTOR PARTICIPATION PROVISION"
(SPECIAL PROVISION) SETTING FORTH A 30 PERCENT GOAL FOR SUBCONTRACTING
TO MINORITY-OWNED BUSINESSES.
ON MAY 31, 1977, ASSOCIATED GENERAL CONTRACTORS OF MASSACHUSETTS,
INC. AND CONSTRUCTION INDUSTRIES OF MASSACHUSETTS, INC. (AGC/CIM)
REINSTATED AN EARLIER COMPLAINT FILED IN THIS OFFICE REGARDING THE
AFFIRMATIVE ACTION REQUIREMENTS FOR MINORITY CONTRACTOR PARTICIPATION
CONTAINED IN THE MBTA CONTRACT. AGC/CIM ASSERTS THAT THE SPECIAL
PROVISION IS INCONSISTENT WITH BASIC PRINCIPLES OF FEDERAL PROCUREMENT
LAW BECAUSE A BIDDER CANNOT OBJECTIVELY DETERMINE WHETHER HE HAS
COMPLIED WITH THE PROVISION AND BECAUSE THE PROVISION UNDULY RESTRICTS
COMPETITION.
BIDS WERE OPENED ON JUNE 14, 1977; THE LOW BID WAS SUBMITTED BY
PERINI CORPORATION AND KING ERECTORS, INC., A JOINT VENTURE
(PERINI-KING). HOWEVER, PERINI-KING'S BID WAS REJECTED BY THE MBTA AS
NONRESPONSIVE AND, ON JULY 27, 1977, MBTA AWARDED THE CONTRACT TO PETER
KIEWIT SONS' COMPANY, THE SECOND LOW BIDDER, SUBJECT TO UMTA APPROVAL.
UMTA GRANTED ITS APPROVAL ON JULY 28, 1977. ON JULY 28, 1977,
PERINI-KING FILED A COMPLAINT IN THIS OFFICE AGAINST MBTA'S ACTION,
ALLEGING THAT ITS BID WAS REJECTED FOR UNSOUND SUBJECTIVE REASONS, THAT
THE SPECIAL PROVISION WAS APPLIED UNFAIRLY, AND THAT THE AWARD TO PETER
KIEWIT SONS' COMPANY WAS PRE-DETERMINED.
AGC/CIM AND PERINI-KING FILED SEPARATE CIVIL ACTIONS, C.A. NOS.
76-2992-M AND 77-2340-F, RESPECTIVELY, IN THE UNITED STATES DISTRICT
COURT FOR THE DISTRICT OF MASSACHUSETTS REQUESTING THAT THE COURT
DECLARE THE SPECIAL PROVISIONS TO BE UNCONSTITUTIONAL. PERINI-KING'S
ACTION ALSO REQUESTS THAT THE COURT DETERMINE THAT THE SPECIAL PROVISION
IS UNREASONABLY RESTRICTIVE OF COMPETITION AND THAT AWARD OF THE
CONTRACT TO THE SECOND LOW BIDDER VIOLATED THE STANDARDS OF COMPETITIVE
BIDDING.
IT HAS LONG BEEN THE POLICY OF OUR OFFICE NOT TO DECIDE MATTERS WHERE
THE MATERIAL ISSUES ARE BEFORE A COURT OF COMPETENT JURISDICTION UNLESS
THE COURT EXPRESSES AN INTEREST IN RECEIVING OUR VIEWS. 52 COMP.GEN.
706 (1973); CUBIC WESTERN DATA, INC., B-189578, AUGUST 3, 1977, 77-2
CPD 78; SOVERIGN CONSTRUCTION COMPANY, LTD; CITY OF PHILADELPHIA,
B-185874, MARCH 8, 1977, 77-1 CPD 168. WE BELIEVE THE COURT ACTION
FILED BY PERINI-KING ENCOMPASSES THE MATERIAL ISSUES RAISED BY THE
COMPLAINTS. MOREOVER, ALTHOUGH WE HAVE BEEN ADVISED BY LETTER DATED
AUGUST 23, 1977, THAT THE COURT HAS "NO OBJECTION TO THIS INVESTIGATION
(BY OUR OFFICE) CONTINUING WHILE THIS CASE IS ACTIVE IN * * * COURT," WE
DO NOT THINK THIS INDICATES ANY PARTICULAR INTEREST BY THE COURT IN
RECEIVING OUR VIEWS.
ACCORDINGLY, WE WILL TAKE NO FURTHER ACTION ON THE MATTER.
B-190350, OCTOBER 26, 1977
HEADNOTES - UNAVAILABLE
PROTEST TO GAO AGAINST ALLEGEDLY RESTRICTIVE SPECIFICATION, FILED
MORE THAN 10 WORKING DAYS AFTER INITIAL ADVERSE AGENCY ACTION ON PROTEST
TO CONTRACTING ACTIVITY, IS UNTIMELY AND WILL NOT BE CONSIDERED ON ITS
MERITS.
DUPONT PACIFIC, LTD.:
INVITATION FOR BIDS (IFB) NO. N62766-77-B-0025 WAS ISSUED ON JULY 14,
1977, BY THE NAVAL FACILITIES ENGINEERING COMMAND FOR THE RESTORATION OF
TYPHOON-DAMAGED FAMILY HOUSING FACILITIES AT ANDERSON AIR FORCE BASE,
GUAM, M.I. BIDS WERE TO BE OPENED ON SEPTEMBER 13, ALTHOUGH THE DATE
WAS LATER EXTENDED TO SEPTEMBER 21.
AT THE END OF AUGUST, DUPONT PACIFIC, LTD. (DUPONT), A MANUFACTURER'S
REPRESENTATIVE FOR TWO ELASTOMERIC ROOF COATING FIRMS, INSTRUCTED ITS
"APPLICATOR CONTRACTOR," ORIPAC PAINTING CO. (ORIPAC), TO PROTEST TO THE
CONTRACTING ACTIVITY THAT A SPECIFICATION IN THE IFB CONCERNING
"ELASTOMERIC MEMBRANE COATING" WAS UNDULY RESTRICTIVE IN THAT IT COULD
ONLY BE MET BY ONE ROOF COATING MANUFACTURER. ON SEPTEMBER 15, ORIPAC
WAS INFORMED BY THE NAVY OFFICER IN CHARGE OF CONSTRUCTION (OICC) THAT
THE SPECIFICATION WOULD NOT BE AMENDED. DUPONT ITSELF FILED A PROTEST
ON BEHALF OF ITS TWO CLIENTS WITH THE OICC ON THAT SAME DATE.
BIDS WERE OPENED UNDER THE IFB AS INITIALLY ISSUED ON SEPTEMBER 21,
AND AWARD WAS MADE ON SEPTEMBER 26. DUPONT'S PROTEST WAS DENIED BY THE
OICC BY TELEGRAM OF SEPTEMBER 28. DUPONT PROTESTED THE MATTER TO OUR
OFFICE BY LETTER DATED OCTOBER 3, FILED HERE ON OCTOBER 6.
SECTION 20.2(A) OF OUR BID PROTEST PROCEDURES, 4 C.F.R.PART 20 (1977)
(PROCEDURES), PROVIDES IN PART:
" * * * IF A PROTEST HAS BEEN FILED WITH THE CONTRACTING AGENCY, ANY
SUBSEQUENT PROTEST TO THE GENERAL ACCOUNTING OFFICE FILED WITHIN 10
WORKING DAYS OF FORMAL NOTIFICATION OF OR ACTUAL OR CONSTRUCTIVE
KNOWLEDGE OF INITIAL ADVERSE AGENCY ACTION WILL BE CONSIDERED. * * * "
FOR PURPOSES OF DUPONT'S PROTEST TO OUR OFFICE, WE CONSIDER THE
"INITIAL ADVERSE AGENCY ACTION" HERE TO HAVE BEEN THE OICC'S SEPTEMBER
15 NOTICE TO ORIPAC, WHICH HAD PROTESTED AT THAT LEVEL AT THE
INSTRUCTION OF DUPONT, THAT THE SPECIFICATION IN ISSUE WOULD NOT BE
AMENDED. ACCORDINGLY, DUPONT'S PROTEST TO OUR OFFICE, FILED OCTOBER 6,
IS UNTIMELY UNDER SECTION 20.2(A) OF OUR PROCEDURES AND WILL NOT BE
CONSIDERED ON ITS MERITS.
IN REGARD TO THE ABOVE, WE RECOGNIZE THAT DUPONT ITSELF PURSUED THE
MATTER WITH THE OICC IN ITS LETTER OF SEPTEMBER 15. HOWEVER, WHILE WE
REALIZE THAT A PROTESTER MAY CONSIDER AN AGENCY'S INITIAL ADVERSE ACTION
TO BE ILL-FOUNDED OR INADEQUATELY EXPLAINED, LEADING THE PROTESTER TO
SEEK RECONSIDERATION OR CLARIFICATION AT THE AGENCY OR OTHER LEVEL, IT
IS NEVERTHELESS OBLIGATORY THAT THE PROTEST BE FILED AFTER NOTIFICATION
OF INITIAL ADVERSE AGENCY ACTION. MR. SCRUB CAR WASH SYSTEMS, INC.,
B-186586, JULY 9, 1976, 76-2 CPD 29; 52 COMP.GEN. 20 (1972).
FURTHERMORE, EVEN IF WE WERE TO CONSIDER DUPONT'S LETTER OF SEPTEMBER 15
TO THE OICC, RATHER THAN ORIPAC'S EARLIER COMMUNICATION WITH THE OICC,
AS DUPONT'S INITIAL PROTEST, THE OPENING OF BIDS ON SEPTEMBER 21 WITHOUT
TAKING THE REQUESTED CORRECTIVE ACTION MUST BE CONSIDERED "ADVERSE
AGENCY ACTION" WITHIN THE MEANING OF SECTION 20.2(A) OF OUR PROCEDURES.
KINETIC SYSTEMS, INC., B-189146, JULY 1, 1977, 77-2 CPD 5. THUS, THE
PROTEST TO OUR OFFICE, FILED MORE THAN 10 WORKING DAYS THEREAFTER,
CANNOT BE CONSIDERED ON THAT BASIS EITHER.
B-186939, OCTOBER 25, 1977
HEADNOTES - UNAVAILABLE
DIGEST:
1. CLAIM FOR PROPOSAL PREPARATION COSTS MAY BE ALLOWED WHERE AGENCY
ACTION IS UNREASONABLE AND REASONABLE CERTAINTY EXISTS THAT CLAIMANT
WOULD HAVE RECEIVED AWARD BUT FOR IMPROPER AGENCY ACTION.
2. BY CONDUCTING PROPOSALS EVALUATION IN MANNER DIFFERENT THAN IN
RFP, BY FAILING TO AMEND RFP WHEN AGENCY KNEW IT WOULD ACCEPT LEVEL OF
EFFORT SIGNIFICANTLY BELOW THAT STATED IN RFP; AND BY FAILING TO INSURE
EQUALITY OF COMPETITION, AGENCY REJECTION OF CLAIMANT'S PROPOSAL WAS
ARBITRARY AND CAPRICIOUS AND FAILED TO ACCORD PROPOSAL FAIR AND HONEST
CONSIDERATION. SINCE CLAIMANT'S PROPOSAL WAS RATED HIGH TECHNICALLY AND
PROPER EVALUATION WOULD HAVE INDICATED PRICE WAS IN COMPETITIVE RANGE,
IF NOT LOWEST RECEIVED, IT IS REASONABLY CERTAIN CLAIMANT WOULD HAVE
RECEIVED AWARD BUT FOR ERRONEOUS AGENCY ACTION AND IS THEREFORE ENTITLED
TO PROPOSAL PREPARATION COSTS.
3. SINCE CLAIM INCLUDES NONALLOWABLE ITEMS OF PREPARING UNSOLICITED,
AS WELL AS SOLICITED PROPOSAL, THERE IS NO BASIS AT THIS TIME TO
DETERMINE QUANTUM. CLAIMANT MAY SUBMIT NECESSARY DOCUMENTATION TO
AGENCY FOR RESOLUTION. IF AGREEMENT CANNOT BE REACHED MATTER SHOULD BE
RETURNED TO GAO FOR DECISION.
INTERNATIONAL FINANCE AND ECONOMICS:
INTERNATIONAL FINANCE AND ECONOMICS (IFE) CLAIMS REIMBURSEMENT OF
PROPOSAL PREPARATION EXPENSES INCURRED IN COMPETING FOR THE PROCUREMENT
UNDER REQUEST FOR PROPOSALS (RFP) 6-38070 ISSUED BY THE DEPARTMENT OF
COMMERCE FOR A STUDY OF FOREIGN MARITIME AIDS WHICH WAS THE SUBJECT OF
DECISIONS IN INTERNATIONAL FINANCE AND ECONOMICS, B-186939, JANUARY 27,
1977, 77-1 CPD 66 AND DEPARTMENT OF COMMERCE-- REQUEST FOR
RECONSIDERATION, B-186939, JULY 14, 1977, 77-2 CPD 23.
AS STATED BY IFE, ITS CLAIM IS BASED UPON OUR JANUARY 27 DECISION:
"THE RULING BY THE COMPTROLLER GENERAL AND THE RECORD IN THE * * * FILE
WOULD APPEAR TO ESTABLISH SUFFICIENT JUSTIFICATION FOR SUCH
COMPENSATION." IFE CLAIMS THAT IT EXPENDED $11,800 FOR PROFESSIONAL TIME
IN DEVELOPING AND PREPARING PRIOR UNSOLICITED AND NEGOTIATED PROPOSALS,
$407.40 IN INDIRECT COSTS, AND $5,830 IN LOST FEE, TOTALING $18,037.40.
THIS CLAIM WAS FIRST PRESENTED TO COMMERCE BY LETTER DATED MARCH 16,
1977. ON APRIL 13, 1977, COMMERCE DENIED THE CLAIM ON THE BASIS THAT
THE " * * * THE RECORD DOES NOT SUPPORT THE CONCLUSION THAT IFE WAS
DENIED A CONTRACT BECAUSE OF ILLEGAL ACTIONS OR BAD FAITH ON THE PART OF
COMMERCE PROCUREMENT PERSONNEL." MOREOVER, COMMERCE CITED ITS
DISAGREEMENT WITH OUR DECISION AS AFFORDING ADDITIONAL BASES TO DENY THE
CLAIM. WE NOTE THAT THE CRUX OF ITS DISAGREEMENT WAS SUBMITTED TO OUR
OFFICE WITH THE REQUEST FOR RECONSIDERATION, WHICH WE DECLINED TO
CONSIDER IN VIEW OF THE UNTIMELINESS OF ITS FILING.
BASED UPON THE RECORD, IFE IS ENTITLED TO ITS PROPOSAL PREPARATION
COSTS INCURRED WITH RESPECT TO THE COMPETITIVE PROCUREMENT ONLY. THE
APPLICABLE STANDARDS GOVERNING OUR CONSIDERATION WERE STATED IN KECO
INDUSTRIES, INC. V. UNITED STATES, 492 F.2D 1200 (CT. CL. 1974):
"THE ULTIMATE STANDARD IS, AS WE SAID IN KECO INDUSTRIES I, SUPRA,
WHETHER THE GOVERNMENT'S CONDUCT WAS ARBITRARY AND CAPRICIOUS TOWARD THE
BIDDER-CLAIMANT. WE HAVE LIKEWISE MARKED OUT FOUR SUBSIDIARY, BUT
NEVERTHELESS GENERAL, CRITERIA CONTROLLING ALL OR SOME OF THESE CLAIMS.
ONE IS THAT SUBJECTIVE BAD FAITH ON THE PART OF THE PROCURING OFFICIALS,
DEPRIVING A BIDDER OF THE FAIR AND HONEST CONSIDERATION OF HIS PROPOSAL
NORMALLY WARRANTS RECOVERY OF BID PREPARATION COSTS. HEYER PRODUCTS CO.
V. UNITED STATES, 140 F.SUPP. 409, 135 CT.CL. 63 (1956). A SECOND IS
THAT PROOF THAT THERE WAS 'NO REASONABLE BASIS' FOR THE ADMINISTRATIVE
DECISION WILL ALSO SUFFICE, AT LEAST IN MANY SITUATIONS. CONTINENTAL
BUSINESS ENTERPRISES V. UNITED STATES, 452 F.2D 1016, 1021, 196 CT.CL.
627, 637-638 (1971). THE THIRD IS THAT THE DEGREE OF PROOF OF ERROR
NECESSARY FOR RECOVERY IS ORDINARILY RELATED TO THE AMOUNT OF DISCRETION
ENTRUSTED TO THE PROCUREMENT OFFICIALS BY APPLICABLE STATUTES AND
REGULATIONS. CONTINENTAL BUSINESS ENTERPRISES V. UNITED STATES, SUPRA
452 F.2D AT 1021, 196 CT.CL.AT 637 (1971); KECO INDUSTRIES,INC., SUPRA,
428 F.2D AT 1240, 192 CT.CL.AT 784. THE FOURTH IS THAT PROVEN VIOLATION
OF PERTINENT STATUTES OR REGULATIONS CAN, BUT NEED NOT NECESSARILY, BE A
GROUND FOR RECOVERY. CF. KECO INDUSTRIES I, SUPRA, 428 F.2D AT 1240,
192 CT.CL.AT 784. THE APPLICATION OF THESE FOUR GENERAL PRICIPLES MAY
WELL DEPEND ON (1) THE TYPE OF ERROR OR DERELICTION COMMITTED BY THE
GOVERNMENT, AND (2) WHETHER THE ERROR OR DERELICTION OCCURRED WITH
RESPECT TO THE CLAIMANT'S OWN BID OR THAT OF A COMPETITOR."
THUS, A TWO-FOLD REVIEW OF THE PROCUREMENT HISTORY IS REQUIRED IN
CONSIDERING A CLAIM FOR PROPOSAL PREPARATION COSTS. THE FIRST CONCERNS
SCRUTINY OF THE AGENCY'S ACTION TO ASCERTAIN IF IT FALLS WITHIN ONE OF
THE CATEGORIES OUTLINED IN KECO INDUSTRIES, INC. V. UNITED STATES,
SUPRA. ON THIS ASPECT, A COMPARISON OF COMMERCE'S ACTIONS WITH THOSE OF
THE AGENCY IN AMRAM NOWAK ASSOCIATES, INC., 56 COMP.GEN. 448 (1977),
77-1 CPD 219, IS INSTRUCTIVE. THERE, THE AGENCY SOUGHT PROPOSALS FOR A
DOCUMENTARY FILM PLUS AN OPTION FILM. THE RFP INDICATED THAT THE
EVALUATION WOULD BE BASED PRIMARILY UPON THE PRICE OF THE BASIC
DOCUMENTARY FILM, WITH CONSIDERATION OF THE OPTION FILM SUBORDINATE.
HOWEVER, THE AGENCY AWARDED THE CONTRACT ON THE BASIS OF A COMBINED
EVALUATION OF THE BASIC PLUS OPTION FILM. THIS PROCEDURE DISPLACED THE
PROTESTER/CLAIMANT AS LOW OFFEROR ON THE BASIC FILM ALONE. WE DISCUSSED
THE EFFECT THE DEPARTURE FROM THE EVALUATION SCHEME IN THE RFP HAD IN
RELATION TO THE CLAIM FOR PROPOSAL PREPARATION COSTS:
" * * * IN EVALUATING THE PROPOSALS ON THE BASIS OF THE COMBINED
PRICES OFFERED FOR BOTH FILMS, EPA DID NOT PERFORM THE EVALUATIONS IN
ACCORDANCE WITH THE RFP. EPA'S EVALUATION ON THIS BASIS WAS IMPROPER,
AND THE AGENCY'S ACTION IN AWARDING THE CONTRACT TO MCBRIDE WAS WITHOUT
A REASONABLE BASIS. FURTHERMORE, EPA'S DETERMINATION TO REJECT NOWAK'S
PROPOSAL WAS ARBITRARY AND CAPRICIOUS AND CONSTITUTED FAILURE TO GIVE
THE REQUISITE FAIR AND HONEST CONSIDERATION TO THE PROPOSAL, THUS
ENTITLING NOWAK TO PROPOSAL PREPARATION COSTS. SEE T & H COMPANY, 54
COMP.GEN. 1021, 1025 (1975), 75-1 CPD 345."
IN OUR JANUARY 27 DECISION, WE REVIEWED COMMERCE'S ACTIONS AND
CONCLUDED THAT THE AWARD WAS IMPROPER. HOWEVER, WE COULD NOT RECOMMEND
CORRECTIVE ACTION BECAUSE WORK HAD BEEN PERMITTED TO PROCEED BY COMMERCE
DURING THE PENDENCY OF THE PROTEST TO A POINT THAT TERMINATION OF THE
CONTRACT WOULD NOT HAVE BEEN IN THE GOVERNMENT'S BEST INTEREST. WE
NOTED THAT THE EXTENDED TIME LAPSE WAS LARGELY OCCASIONED BY COMMERCE'S
DELAY IN SUBMITTING A REPORT ON THE PROTEST TO OUR OFFICE. THE FACTORS
WHICH PROMPTED OUR CONCLUSION THAT AWARD WAS IMPROPER WERE: (1)
COMMERCE'S FAILURE TO AMEND THE SCOPE OF WORK IN THE RFP TO REFLECT THE
SUBSTANTIALLY REDUCED ESTIMATED LEVEL OF EFFORT ACCEPTABLE TO, AND
ULTIMATELY ACCEPTED BY, COMMERCE VIOLATED FEDERAL PROCUREMENT
REGULATIONS (FPR) SEC. 1-3.805-1(D) (1964 ED. CIRC. 1); (2) COMMERCE'S
FAILURE TO INSURE THAT ALL UNIT PRICES WERE EVALUATED ON THE SAME LEVEL
OF EFFORT WAS A DEPARTURE FROM THE EVALUATION METHOD IN THE RFP; AND
(3) COMMERCE'S FAILURE TO APPLY A "SHOULD-COST" ANALYSIS TO COMPARE
IFE'S FIRM, FIXED-PRICE PROPOSAL WITH THE AWARDEE'S
COST-PLUS-A-FIXED-FEE PROPOSAL DID NOT REALIZE THE INHERENT BENEFITS TO
THE GOVERNMENT OF FIXED-PRICE CONTRACTING.
WHEN COMPARING THAT WHICH TRANSPIRED HERE WITH THE EVENTS IN AMRAM
NOWAK ASSOCIATED, INC., SUPRA, WE THINK IT IS CLEAR THAT COMMERCE'S
ACTIONS MUST BE VIEWED AS UNREASONABLE. THE FAILURE TO INSURE THAT ALL
PROPOSALS ARE TREATED EQUALLY AND AWARDING OF A CONTRACT ON A BASIS
OTHER THAN STATED IN THE RFP CERTAINLY DOES NOT REPRESENT REASONABLE
PROCUREMENT PRACTICES WITHIN THE SECOND TEST OF KECO INDUSTRIES, INC. V.
UNITED STATES, SUPRA. FURTHER, WE NOTE THAT AN ERROR COMMITTED BY
COMMERCE OCCURRED WITH RESPECT TO THE EVALUATION OF IFE'S PROPOSAL.
THE SECOND ASPECT OF OUR INQUIRY CONCERNS WHETHER COMMERCE'S ACTIONS
PRECLUDED IFE FROM RECEIVING " * * * AN AWARD TO WHICH IT WAS OTHERWISE
ENTITLED." MORGAN BURSINESS ASSOCIATES, B-188387, MAY 16, 1977, 77-1 CPD
344. TO APPLY THIS TEST, THE DIFFERENCE BETWEEN FORMALLY ADVERTISED AND
NEGOTIATED PROCUREMENTS MUST BE CONSIDERED. THAT IS, IN A FORMALLY
ADVERTISED PROCUREMENT, 10 U.S.C. 2305 (1970), MANDATES AWARD TO THE LOW
RESPONSIVE, RESPONSIBLE BIDDER. THUS, ONE MAY READILY ASCERTAIN WHICH
BIDDER IS IN LINE FOR AWARD AND OTHERWISE ENTITLED TO IT. HOWEVER, IN
NEGOTIATED PROCUREMENTS OTHER FACTORS MAKE IT DIFFICULT IN MOST
INSTANCES TO DETERMINE WHICH OFFEROR WOULD HAVE RECEIVED AN AWARD. IN
THIS CASE, HAD CIRCUMSTANCES PERMITTED, WE WOULD HAVE RECOMMENDED THAT
THE RFP BE AMENDED AND NEGOTIATIONS REOPENED SINCE WE COULD NOT SAY WITH
ABSOLUTE CERTAINTY THAT IFE WAS ENTITLED TO AWARD.
HOWEVER, AS OUR JANUARY 27 DECISION INDICATES, IFE CLEARLY SUBMITTED
THE BEST TECHNICAL PROPOSAL. THE INITIAL EVALUATION SCORED IFB AT 86.6
POINTS OUT OF A POSSIBLE 100, WHILE TBS WAS RATED AT 72.3. THE
NARRATIVE WHICH ACCOMPANIED THE EVALUATION PANEL'S REPORT STATED A
UNANIMOUS PREFERENCE FOR IFE. FURTHER, IFE'S TECHNICAL SUPERIORITY
VIS-A-VIS TBS REMAINED CONSTANT UPON REVISED EVALUATION OCCASIONED BY
CLARIFICATION RECEIVED FROM BOTH OFFERORS BY COMMERCE. MOREOVER, BASED
UPON THE FIGURES BEFORE COMMERCE AT THE TIME IT PERFORMED THE PRICE
EVALUATION, THE COST OFFERED PER HOUR, USING ONLY LABOR, BURDEN AND
PROFIT, FOR IFE WAS EITHER $35.63 OR $40.72 (DEPENDING UPON WHETHER AN 8
OR 7 HOURS DAY IS USED), AND $41.21 FOR TBS. CONSIDERING ONLY THE
HOURLY RATES SUBMITTED BY IFE AND TBS, THE COMPARISON IS $39.30 TO
$44.92 FOR IFE AND $49.65 FOR TBS. OUR ANALYSIS INDICATES THAT THE
PROJECTED COST (OR PRICE IN THE CASE OF IFE) WAS DIRECTLY RELATED TO THE
ESTIMATED HOURS INVOLVED IN PERFORMANCE AND A COST OR PRICE PROPOSAL
BASED ON A REDUCTION IN THE NUMBER OF HOURS WOULD UTILIZE ESSENTIALLY
THE SAME HOURLY RATE.
WHILE MANY FACTORS MAY HAVE CHANGED UPON RESOLICITATION ON THE BASIS
OF AN AMENDED RFP, FACED WITH A CLEARLY TECHNICALLY SUPERIOR PROPOSAL
WITH FAVORABLE PRICES, IT IS THUS REASONABLY CERTAIN THAT IFE WOULD HAVE
BEEN THE ULTIMATE AWARDEE. GIVEN THE UNCERTAINTIES INVOLVED IN THE
CONTRACTOR SELECTION PROCESS UNDER NEGOTIATED PROCUREMENTS, WE BELIEVE
REASONABLE CERTAINTY IS THE APPROPRIATE STANDARD TO APPLY TO CLAIMS FOR
PROPOSAL PREPARATION COSTS. THEREFORE, WE CONCLUDE THAT IFE IS ENTITLED
TO BE REIMBURSED THE EXPENSES IT INCURRED IN COMPETING FOR THIS
CONTRACT.
IFE IS ENTITLED ONLY TO EXPENSES INCURRED IN THE PROTESTED
PROCUREMENT. THOSE EXPENSES CLAIMED FOR PROFESSIONAL TIME IN DEVELOPING
AND PREPARING THE UNSOLICITED PROPOSAL ARE UNALLOWABLE SINCE AN
ESSENTIAL ELEMENT IS MISSING, I.E., THE IMPLIED PROMISE THAT A PROPOSAL
SUBMITTED IN RESPONSE TO THE GOVERNMENT'S REQUEST WILL BE FAIRLY AND
HONESTLY CONSIDERED. IFE'S CLAIM DOES NOT SEPARATE ITS COSTS FOR THE
PROPOSALS. DOCUMENTARY EVIDENCE SHOULD BE SUBMITTED BY IFE TO SUPPORT
ITS CLAIM FOR PREPARATION COSTS FOR THE PROPOSAL UNDER THE NEGOTIATED
PROCUREMENT.
IFE ALSO CLAIMS THE FOLLOWING COSTS:
CONTRACT TYPING . . . . . . . . . . . . .$200.02
REPRODUCTION COSTS. . . . . . . . . . . . 73.38
BINDERS . . . . . . . . . . . . . . . . . 16.32
DIRECTLY RELATED LUNCHES. . . . . . . . . 46.13
LOCAL TRAVEL EXPENSES . . . . . . . . . . 71.55
TOTAL . . . . . . . . . . . . . . . . . .$407.40
ONLY THOSE COSTS INCURRED IN PREPARING THE COMPETITIVE PROPOSAL ARE
COMPENSABLE. T & H COMPANY, SUPRA. SINCE THERE IS NO INDICATION
WHETHER A PORTION OF THE COSTS CLAIMED ABOVE RELATED TO THE UNSOLICITED
PROPOSAL, DOCUMENTATION ON THIS POINT IS ALSO NECESSARY.
FINALLY, IFE'S CLAIM FOR $5,830 FOR THE FEE IT WOULD HAVE EARNED HAD
IFE RECEIVED THE AWARD IS NOT ALLOWABLE. ANTICIPATED PROFITS ON THE
CONTRACT HAVE SPECIFICALLY BEEN RULED NONALLOWABLE BECAUSE NO CONTRACT
EVER CAME INTO EXISTENCE. KECO INDUSTRIES, INC. V. UNITED STATES,
SUPRA.
IN LIGHT OF THE FOREGOING, IFE SHOULD SUBMIT THE NECESSARY
DOCUMENTATION TO COMMERCE IN ORDER THAT AN AGREEMENT MAY BE REACHED ON
THE QUANTUM ISSUE. IN THE EVENT THAT AGREEMENT IS NOT REACHED, THE
MATTER SHOULD BE RETURNED HERE FOR FURTHER CONSIDERATION.
B-187744, OCT 25, 1977
HEADNOTES - UNAVAILABLE
1. MEMBER'S CLAIM FOR PER DIEM ALLOWANCE, MILEAGE ALLOWANCE, AND
COST OF BRIDGE TOLLS FOR A PERIOD EXTENDING OVER 3 YEARS UNDER A
CONSECUTIVE SERIES OF "TEMPORARY ADDITIONAL DUTY" ORDERS TO A RIFLE
RANGE MAY NOT BE ALLOWED, IN VIEW OF THE CIRCUMSTANCES SHOWING HIS
ASSIGNMENT FOR DUTY AT THE RIFLE RANGE TO HAVE BEEN HIS PERMANENT
ASSIGNMENT.
2. WHILE SERIES OF ORDERS ASSIGNING MEMBER TO DUTY SITE FOR A PERIOD
CONTINUING OVER 3 YEARS WERE CAPTIONED AS "TEMPORARY ADDITIONAL DUTY"
ORDERS, THE COMMANDANT OF THE MARINE CORPS HAS DECLINED TO APPROVE THE
DUTY ASSIGNMENT FOR SUCH EXTENDED PERIOD AS BEING IN FACT A TEMPORARY
DUTY ASSIGNMENT WITHIN THE PURVIEW OF REGULATIONS ALLOWING PAYMENT OF
PER DIEM ALLOWANCES.
MASTER GUNNERY SERGEANT JOHN M. MYERS, USMC:
THIS ACTION IS IN RESPONSE TO CORRESPONDENCE FROM THE ATTORNEYS FOR
MASTER GUNNERY SERGEANT JOHN M. MYERS, 000-00-4711, USMC, REQUESTING
RECONSIDERATION OF SETTLEMENT DATED JULY 16, 1975, BY THE CLAIMS
DIVISION OF THIS OFFICE, WHICH DISALLOWED THE MEMBER'S CLAIM FOR PER
DIEM, MILEAGE ALLOWANCE AND REIMBURSEMENT OF COST OF BRIDGE TOLLS,
INCIDENT TO DUTY PERFORMED AT THE FLEET ANTI-AIR WARFARE TRAINING CENTER
(FAAWTC), DAM NECK, VIRGINIA, DURING THE PERIOD JANUARY 12, 1971, TO
APRIL 11, 1974.
THE MEMBER'S CLAIM WAS ORIGINALLY TRANSMITTED TO OUR CLAIMS DIVISION
BY THE COMMANDANT OF THE MARINE CORPS AS A DOUBTFUL CLAIM FOR TRAVEL
ALLOWANCES. THE RELATED DOCUMENTS SUBMITTED WITH THE CLAIM INCLUDED A
SERIES OF ORDERS THE FIRST ISSUED BY HEADQUARTERS, FLEET MARINE FORCE,
ATLANTIC, NORFOLK, VIRGINIA, ON JANUARY 22, 1971. THESE ORDERS,
CAPTIONED AS TEMPORARY ADDITIONAL DUTY (TAD) ORDERS, ASSIGNED SERGEANT
MYERS AS THE NON-COMMISSIONED OFFICER IN CHARGE (NCOIC) OF THE RIFLE
RANGE, FAAWTC, DAM NECK, VIRGINIA, FOR A PERIOD OF ABOUT 6 MONTHS.
THEREAFTER, ORDERS WERE ISSUED JULY 21, 1971, NOVEMBER 10, 1971,
NOVEMBER 30, 1971, MAY 31, 1972, AND JULY 11, 1972, FOR TEMPORARY
ADDITIONAL DUTY FOR PERIODS OF ABOUT 6 MONTHS IN CONNECTION WITH THE
MEMBER'S DUTIES AS NCOIC AT THE RIFLE RANGE. IN THIS CONNECTION, THE
TRAVEL VOUCHER FORM SUBMITTED BY THE MEMBER IN CONNECTION WITH HIS CLAIM
INDICATES THAT HIS PRIMARY DUTY POST WAS AT THE DAM NECK RIFLE RANGE,
COMMENCING JANUARY 12, 1971, AND TERMINATING ON APRIL 12, 1974. THE
ITINERARY INDICATES THAT APPROXIMATELY EVERY 6 MONTHS, THE MEMBER WOULD
TRAVEL BY PRIVATE AUTOMOBILE FROM DAM NECK TO NORFOLK, VIRGINIA, ON A
1-HOUR TRIP, AND THEN USUALLY DEPART AN HOUR LATER ON HIS RETURN TRIP TO
DAM NECK. ON SUCH BASIS, THE MEMBER SUBMITTED A CLAIM TO THE MARINE
CORPS FOR $25,579.35, REPRESENTING PER DIEM AND MILEAGE COVERING A
PERIOD OF OVER 3 YEARS INCIDENT TO HIS ASSIGNMENT AT THE DAM NECK RIFLE
RANGE.
IN TRANSMITTING THE MEMBER'S CLAIM TO THE CLAIMS DIVISION OF THIS
OFFICE AS A DOUBTFUL CLAIM, THE COMMANDANT OF THE MARINE CORPS PROVIDED
THE FOLLOWING BACKGROUND OF THE MEMBER'S ASSIGNMENT IN TERMS OF THE
PERMANENT STATION AND TEMPORARY ADDITIONAL DUTY ASPECTS OF THE MEMBER'S
CLAIM. IT IS EXPLAINED THAT HEADQUARTERS, FLEET MARINE FORCE, ATLANTIC,
NORFOLK, VIRGINIA, IS LOCATED ON THE U.S. NAVAL STATION, NORFOLK,
VIRGINIA. THAT INSTALLATION IS WITHIN THE CORPORATE LIMITS OF THE
INDEPENDENT CITY OF NORFOLK, VIRGINIA. FROM SUCH HEADQUARTERS, THE
FAAWTC, DAM NECK, VIRGINIA, IS SITUATED ACROSS A CONTIGUOUS
JURISDICTIONAL BOUNDARY, INSIDE THE LIMITS OF THE CITY OF VIRGINIA
BEACH, VIRGINIA. THE DISTANCE BETWEEN THE NAVAL STATION, NORFOLK,
ANDTHE FAAWTC, DAM NECK, VIRGINIA, IS 25 MILES AND IT IS FURTHER STATED
THAT THE PORTSMOUTH - NORFOLK - NEWPORT NEWS - VIRGINIA BEACH
METROPOLITAN AREA IS SERVED BY LOCAL COMMON CARRIER TRANSPORTATION.
HOWEVER, IT IS STATED THAT IT IS NOT CONSIDERED APPROPRIATE THAT THE
COMMANDANT, AS THE AUTHORITY DESIGNATED TO APPROVE TEMPORARY ADDITIONAL
DUTY IN EXCESS OF 6 MONTHS, SHOULD ISSUE SUCH AN APPROVAL IN THIS CASE.
IT IS FURTHER STATED IN THE COMMANDANT'S LETTER THAT THE PROPRIETY OF
APPROVAL IS DOUBTFUL BECAUSE THE TIME ELEMENT INVOLVED (OVER 3 YEARS) IS
PROLONGED TO THE EXTENT THAT THE ASSIGNMENT MAY BE VIEWED AS HAVING
ASSUMED THE CHARACTERISTICS OF A PERMANENT ASSIGNMENT.
THE MEMBER'S CLAIM HAS BEEN DISALLOWED BY CLAIMS DIVISION SETTLEMENT
OF JULY 16, 1975, PRIMARILY ON THE BASIS THAT HIS TAD ORDERS TO DAM NECK
UNDER THEIR OWN TERMS WERE DEEMED TO BE "PERMISSIVE ORDERS" IN CITING
AUTHORITY THAT:
"' * * * THESE ORDERS ARE ISSUED WITH THE UNDERSTANDING AND NO
EXPENSE TO THE GOVERNMENT FOR TRAVEL AND/OR PER DIEM IS AUTHORIZED IN
EXECUTION OF THESE ORDERS. IF YOU DO NOT DESIRE TO EXECUTE THE ORDER
WITHOUT EXPENSE TO THE GOVERNMENT FOR TRAVEL AND/OR PER DIEM, THE
AUTHORIZATION IS REVOKED AND WILL BE RETURNED FOR CANCELLATION. * * *
'"
IN THIS RESPECT, PARAGRAPH M6453, VOLUME 1 OF THE JOINT TRAVEL
REGULATIONS (1 JTR), PROVIDES THAT AN ORDER PERMITTING, AS DISTINGUISHED
FROM DIRECTING A MEMBER TO TRAVEL DOES NOT ENTITLE HIM TO THE EXPENSES
OF TRAVEL.
IN THE REQUEST FOR RECONSIDERATION IT IS REPRESENTED THAT PER DIEM
HAD BEEN PAID TO ANOTHER MEMBER ASSIGNED AT A PRIOR PERIOD TO THE DAM
NECK RIFLE RANGE FROM APRIL 1, 1970, TO SEPTEMBER 30, 1970.
SECTION 404 OF TITLE 37, UNITED STATES CODE, PROVIDES IN PERTINENT
PART, THAT UNDER REGULATIONS PRESCRIBED BY THE SECRETARIES CONCERNED, A
MEMBER OF A UNIFORMED SERVICE IS ENTITLED TO TRAVEL AND TRANSPORTATION
ALLOWANCED FOR TRAVEL PERFORMED AWAY FROM HIS DESIGNATED POST OF DUTY.
HOWEVER, WHETHER A PARTICULAR DUTY ASSIGNMENT IS PERMANENT OR
TEMPORARY IN NATURE IS A QUESTION OF FACT DETERMINED BY CONSIDERING THE
ORDERS UNDER WHICH THE ASSIGNMENT IS MADE AND THE CHARACTER OF THE
ASSIGNMENT ITSELF, WITH THE PURPOSE AND DURATION OF THE ASSIGNMENT BEING
VITAL ELEMENTS IN THAT DETERMINATION. BY DEFINITION, THE WORD
"TEMPORARY" IS A TERM OF LIMITATION WHICH INDICATES A PERIOD OF
RELATIVELY SHORT DURATION AND OF A TRANSITORY NATURE WITH RESPECT TO THE
PURPOSE OF THE ASSIGNMENT. IT HAS BEEN SO USED WITH REFERENCE TO
TEMPORARY DUTY ASSIGNMENTS. SEE 24 COMP.GEN. 667 (1945); 36 ID. 757
(1957); AND 53 ID. 44 (1973). WHILE AN ADMINISTRATIVE EVALUATION OF
THE CHARACTER OF THE ASSIGNMENT, AS REFLECTED IN THE ORDERS DIRECTING
ITS PERFORMANCE, ORDINARILY IS GIVEN CONSIDERABLE WEIGHT IN SUCH
DETERMINATION, IT IS NOT CONCLUSIVE IN THE MATTER WHEN OTHER AVAILABLE
EVIDENCE IS CONSIDERED SUFFICIENT TO INDICATE THE EXISTENCE OF A
CONTRARY FACTUAL SITUATION.
THE FOREGOING PRINCIPLES ARE DIRECTLY APPLICABLE TO THE SITUATION
PRESENTED BY THE MEMBER'S ASSIGNMENT TO THE DAM NECK RIFLE RANGE FOR A
PERIOD RUNNING OVER 3 YEARS. NOTWITHSTANDING THE SERIES OF ORDERS
CAPTIONING SUCH ASSIGNMENT AS TEMPORARY ADDITIONAL DUTY, THE MEMBER
REMAINED IN THAT ASSIGNMENT FOR MORE THAN 3 YEARS. IT IS CLEAR THAT THE
ASSIGNMENT WAS CONTINUING AND PERMANENT AND NOT OF THE SHORT DURATION.
HIS ORDERS WERE REISSUED PERIODICALLY AND THE MEMBER APPARENTLY VISITED
HIS STATED DUTY STATION IN NORFOLK ON OCCASION BUT HIS DUTY ASSIGNMENT
DURING THIS PERIOD WAS THAT OF NCOIC AT THE RIFLE RANGE.
THE CONTROLLING REGULATIONS PROVIDE THAT TEMPORARY DUTY ASSIGNMENTS
AT ONE LOCATION WILL BE LIMITED TO PERIODS NOT IN ECESS OF 6 MONTHS
EXCEPT, THAT IF APPROVAL IS OBTAINED FROM THE APPROPRIATE AUTHORITY, THE
PERIOD OF TEMPORARY DUTY MAY BE LONGER THAN 6 MONTHS IN UNUSUAL OR
EMERGENCY CIRCUMSTANCES. SEE PARAGRAPH M3003-2, 1 JTR, IN FORCE AT THE
TIME AND THE SIMILAR PROVISIONS OF THE CURRENT PARAGRAPH M3004. SEE
ALSO 38 COMPGEN. 853 (1959). THERE IS NOTHING IN THE RECORD SHOWING
THAT SUCH APPROVAL WAS OBTAINED RELATING TO THE MEMBER'S SERIES OF
ASSIGNMENTS AT THE DAM NECK RIFLE RANGE OR THAT THERE WERE UNUSUAL OR
EMERGENCY CIRCUMSTANCES WHICH WOULD HAVE JUSTIFIED SUCH APPROVAL. IN
POINT OF FACT, THE COMMANDANT OF THE MARINE CORPS, IN TRANSMITTING THE
MATTER HERE HAS DECLINED TO ISSUE SUCH APPROVAL IN THIS CASE.
ON THE BASIS OF THE FACTS PRESENTED IT APPEARS THAT SERGEANT MYERS'
ASSIGNMENT TO THE RIFLE RANGE AT DAM NECK WAS INTENDED TO BE A PERMANENT
RATHER THAN TEMPORARY ASSIGNMENT. EVEN IF WE WERE ABLE TO HOLD THAT THE
INITIAL ORDERS FOR 6 MONTHS' DUTY AT THAT PLACE WERE PROPER TEMPORARY
DUTY ORDERS, THOSE ORDERS WERE PERMISSIVE AND CARRIED WITH THEM NO
ENTITLEMENT TO REIMBURSEMENT OF TRAVEL EXPENSES OR PER DIEM UNDER
PARAGRAPH M6453, 1 JTR, AS CITED IN THE CLAIMS SETTLEMENT.
IN THE CIRCUMSTANCES, THE MEMBER'S ASSIGNMENT AT DAM NECK FOR OVER 3
YEARS MUST BE REGARDED AS A PERMANENT DUTY ASSIGNMENT FOR WHICH NO PER
DIEM PAYMENT MAY BE AUTHORIZED. THE FACT THAT ANOTHER INDIVIDUAL MAY
HAVE RECEIVED REIMBURSEMENT FOR TRAVEL OR PER DIEM WHILE ASSIGNED AS
NCOIC OF THE RIFLE RANGE PROVIDES NO BASIS FOR ALLOWING THIS CLAIM IN
VIEW OF THE FACTS PRESENTED.
REGARDING THE MEMBER'S CLAIM FOR MILEAGE ALLOWANCE AND REIMBURSEMENT
OF BRIDGE TOLLS, NO AUTHORITY EXISTS FOR REIMBURSEMENT OF MILEAGE
BETWEEN THE MEMBER'S PLACE OF LODGING AND HIS DUTY STATION. MOREOVER,
PARAGRAPH M4407, 1 JTR, PROVIDES FOR REIMBURSEMENT OF TOLLS ONLY WHEN
GOVERNMENT CONVEYANCE OR SPECIAL CONVEYANCE HAS BEEN APPROVED BY THE
OFFICIAL DIRECTING TRAVEL. NO SUCH APPROVAL HAS BEEN GRANTED RELATING
TO THE 3-YEAR PERIOD INVOLVED HEREIN.
WHILE THE MEMBER HAD PREVIOUSLY BEEN PAID THE AMOUNT OF $349.60, FOR
MILEAGE ALLOWANCE AND COST OF BRIDGE TOLLS FOR THE PERIOD JULY 26 -
NOVEMBER 30, 1971, IT IS REPORTED THAT THE MARINE CORPS FINANCE CENTER
DISALLOWED THIS PAYMENT AS ERRONEOUS, BUT SUSPENDED COLLECTION ACTION
INCIDENT TO THE MEMBER'S REQUEST FOR REMISSION OF THE INDEBTEDNESS UNDER
10 U.S.C. 6161 (1970). THAT REQUEST FOR REMISSION REMAINS WITHIN THE
JURISDICTION OF THE MARINE CORPS.
ACCORDINGLY, THE DISALLOWANCE OF THE MEMBER'S CLAIM BY SETTLEMENT OF
JULY 16, 1975, IS SUSTAINED.
B-188054, OCTOBER 25, 1977
HEADNOTES - UNAVAILABLE
"PROTEST" BASED ON ALLEGEDLY IMPROPER TERMINATION OF CONTRACT FOR
CONVENIENCE OF THE GOVERNMENT AND ON ALLEGED AGENCY VIOLATION OF OFFICE
OF MANAGEMENT AND BUDGET CIRCULAR A-76 WAS PROPERLY DISMISSED SINCE
DECISIONS TO TERMINATE CONTRACTS ARE MATTERS OF CONTRACT ADMINISTRATION
NOT GENERALLY REVIEWABLE BY GAO UNDER ITS BID PROTEST PROCEDURES AND
COMPLIANCE WITH CIRCULAR A-76 IS POLICY MATTER FOR EXECUTIVE BRANCH NOT
AFFECTING LEGALITY OF AGENCY ACTIONS.
KAUFMAN DEDELL PRINTING, INC.-RECONSIDERATION:
KAUFMAN DEDELL PRINTING, INC. (KAUFMAN) REQUESTS RECONSIDERATION OF
OUR DECISION B-188054, AUGUST 8, 1977, 77-2 CPD 86, DISMISSING ITS
PROTEST AGAINST THE TERMINATION FOR THE CONVENIENCE OF THE GOVERNMENT OF
CONTRACT NO. 68-01-3398 BY THE UNITED STATES ENVIRONMENTAL PROTECTION
AGENCY (EPA).
IN THAT DECISION WE STATED THAT "THE DETERMINATION OF WHETHER A
CONTRACT SHOULD BE TERMINATED FOR THE CONVENIENCE OF THE GOVERNMENT AND
THE PROPER PAYMENT DUE AS A RESULT THEREOF ARE MATTERS OF CONTRACT
ADMINISTRATION AND ARE NOT FOR RESOLUTION UNDER OUR BID PROTEST
PROCEDURES." KAUFMAN MAINTAINS THAT THIS OFFICE SHOULD REVIEW THESE
MATTERS OF CONTRACT ADMINISTRATION AS PART OF OUR "WATCHDOG" FUNCTION
AND REQUESTS THAT WE RECONSIDER OUR POLICY AS IT APPLIES TO KAUFMAN'S
CASE.
IT APPEARS THAT KAUFMAN MISUNDERSTANDS THE FUNCTION OF THIS OFFICE IN
CONSIDERING MATTERS UNDER THE BID PROTEST PROCEDURES, 4 C.F.R.PART 20
(1977). PURSUANT TO THOSE PROCEDURES, WE CONSIDER WHETHER AN AWARD, OR
PROPOSED AWARD, OF A CONTRACT COMPLIES WITH STATUTORY, REGULATORY AND
OTHER LEGAL REQUIREMENTS. SEE SMI (WATERTOWN), INC., B-188174, FEBRUARY
8, 1977, 77-1 CPD 98; DYNETERIA, INC., B-186828, JULY 22, 1976, 76-2
CPD 72. WE DO SO IN ACCORDANCE WITH OUR STATUTORY OBLIGATION UNDER 31
U.S.C. 71 & 74 (1970) TO RULE ON THE LEGALITY OF AN EXPENDITURE OR
PROPOSED EXPENDITURE OF APPROPRIATED FUNDS.
HOWEVER, ONCE A CONTRACT IS PROPERLY AWARDED,THE REGULATIONS AND
USUALLY THE CONTRACT ITSELF PROVIDE THAT THE ADMINISTRATION OF THAT
CONTRACT-- INCLUDING THE RENDERING OF DECISIONS AS TO WHETHER THE
CONTRACT SHOULD BE TERMINATED-- IS THE RESPONSIBILITY AND WITHIN THE
AUTHORITY OF THE COGNIZANT PROCUREMENT OFFICIALS RATHER THAN THIS
OFFICE. THE CONTRACT ALSO USUALLY PROVIDES THAT ANY DISPUTE ARISING OUT
OF CONTRACT PERFORMANCE OR OUT OF THE GOVERNMENT'S UNILATERAL
TERMINATION FOR CONVENIENCE SETTLEMENT DETERMINATION MAY BE APPEALED IN
ACCORDANCE WITH THE "DISPUTES" CLAUSE OF THE CONTRACT. SEE FEDERAL
PROCUREMENT REGULATIONS 1-8.209-7(F), 1-8.701, AND 1-8.705. FOR THAT
REASON THIS OFFICE DOES NOT GENERALLY RULE UPON MATTERS COGNIZABLE UNDER
THE "DISPUTES" CLAUSE OR UPON OTHER CONTRACT ADMINISTRATION MATTERS. E.
WALTERS & COMPANY, INC., ET AL., B-180381, MAY 3, 1974, 74-1 CPD 226;
COLUMBIA VAN LINES, INC., ET AL., 54 COMP.GEN. 955, 961 (1975), 75-1
CPD 295; HUGH BRASINGTON CONTRACING COMPANY, B-187022, SEPTEMBER 14,
1976, 76-2 CPD 243.
THE ONE EXCEPTION TO THIS RULE IS WHERE THERE ARE ALLEGATIONS THAT A
TERMINATION FOR CONVENIENCE RESULTED FROM BAD FAITH OR FROM A CLEAR
ABUSE OF DISCRETION. WE CONSIDER CASES INVOLVING SUCH ALLEGATIONS
BECAUSE A "BAD FAITH" TERMINATION CONSTITUTES A BREACH OF CONTRACT AND
ENTITLES THE CONTRACTOR TO BREACH OF CONTRACT DAMAGES INSTEAD OF THE
TERMINATION SETTLEMENT REMEDY PROVIDED FOR BY THE CONTRACT. NATIONAL
FACTORS,INC., ET AL. V. UNITED STATES, 492 F.2D 98 (CT. CL. 1974).
ACCORDINGLY, WE HAVE REVIEWED TERMINATIONS FOR CONVENIENCE WHERE THEY
WERE BASED ON AGENCY DETERMINATIONS THAT THE INITIAL CONTRACT AWARD WAS
IMPROPER. SEE MICHAEL O'CONNER, INC., ET AL., B-183381, JULY 6, 1976,
76-2 CPD 8; ELECTRONIC ASSOCIATES, INC., B-184412, FEBRUARY 10, 1976,
76-1 CPD 83; SERVICE INDUSTRIES, INC., ET AL., 55 COMP.GEN. 502 (1975),
75-2 CPD 345.
IN THIS CASE, THE TERMINATION WAS NOT BASED ON AN IMPROPRIETY IN THE
AWARD PROCESS BUT RATHER ON A DETERMINATION BY EPA THAT IT COULD PERFORM
THE SERVICES IN-HOUSE AT LOWER COST. IN GENERAL, THE TERMINATION OF A
CONTRACT BECAUSE A BETTER PRICE IS AVAILABLE ELSEWHERE HAS BEEN
RECOGNIZED AS A VALID EXERCISE OF CONTRACTING OFFICER DISCRETION.
COLONIAL METALS CO. V. UNITED STATES, 495 F.2D 1355 (CT. CL. 1974);
B-152486, DECEMBER 6, 1963; JETS SERVICES, ASBCA 19841, 76-1 BCA
11,668. ALTHOUGH THE CITED CASES INVOLVED THE AVAILABILITY OF LOWER
PRICES FROM OTHER CONTRACTORS, THE RATIONALE WOULD SEEM TO APPLY EQUALLY
TO A SITUATION WHERE THE GOVERNMENT BELIEVES IT CAN SAVE MONEY BY
PROVIDING THE SERVICES IN-HOUSE. THUS, ALTHOUGH KAUFMAN DOES NOT AGREE
THAT EPA CAN PERFORM THE SERVICES MORE CHEAPLY, WE DO NOT VIEW KAUFMAN'S
ASSERTIONS AS RAISING THE POSSIBILITY OF A BREACH OF CONTRACT SITUATION
IN CONNECTION WITH THE TERMINATION OF THE KAUFMAN CONTRACT.
KAUFMAN ALSO ASSERTS THAT BECAUSE EPA UNDERSTATED ITS IN-HOUSE COSTS,
THE RESULTANT CONTRACT TERMINATION WAS IN VIOLATION OF OFFICE OF
MANAGEMENT AND BUDGET (OMB) CIRCULAR A-76 WHICH EXPRESSES POLICY
GUIDANCE WITH RESPECT TO WHETHER CERTAIN SERVICES SHOULD BE PROVIDED
IN-HOUSE OR PURCHASED FROM COMMERCIAL SOURCES. KAUFMAN RECOGNIZES THAT
WE REGARD THE PROVISIONS OF CIRCULAR A-76 AS "MATTERS OF EXECUTIVE
POLICY WHICH DO NOT ESTABLISH LEGAL RIGHTS AND RESPONSIBILITIES AND
WHICH ARE NOT WITHIN THE DECISION FUNCTIONS OF THE GENERAL ACCOUNTING
OFFICE," BUT QUESTIONS WHY THIS OFFICE DOES NOT RULE ON AND ENFORCE THAT
EXECUTIVE POLICY.
AS INDICATED ABOVE, THIS OFFICE PASSES ON THE LEGALITY OF GOVERNMENT
EXPENDITURES. THAT MEANS THAT WE CONSIDER WHETHER THE EXPENDITURES WERE
OR WOULD BE CONTRARY TO LAW OR REGULATION. OMB CIRCULAR A-76 IS NOT A
REGULATION HAVING THE FORCE AND EFFECT OF LAW. IT IS A POLICY STATEMENT
OF THE EXECUTIVE BRANCH, AND AN AGENCY'S FAILURE TO COMPLY WITH IT WOULD
NOT RENDER THE AGENCY'S ACTION ILLEGAL. THUS ANY CONTENTION THAT AGENCY
ACTION IS IN VIOLATION OF THE CIRCULAR IS NOT PROPERLY FOR CONSIDERATION
UNDER OUR BID PROTEST PROCEDURES. SEE GENERAL DATACOMM INDUSTRIES,
INC., B-182556, APRIL 9, 1975, 75-1 CPD 218.
OUR PRIOR DECISION IS AFFIRMED.
B-188871, OCTOBER 25, 1977
HEADNOTES - UNAVAILABLE
1. WHERE RECORD SHOWS REASONABLE BASIS FOR AGENCY'S JUDGMENT THAT
HIGHER PRICED PROPOSAL WAS SIGNIFICANTLY SUPERIOR TO LOWER PRICES
PROPOSAL FOR TECHNICAL REASONS, SELECTION OF HIGHER PRICED PROPOSAL IS
NOT OBJECTIONABLE.
2. WHERE AGENCY LISTS FOUR EVALUATION CRITERIA IN RFP IN DESCENDING
ORDER OF IMPORTANCE AND ASSIGNS UNDISCLOSED WEIGHTS OF 40, 33.3, 16.7
AND 10 PERCENT OF TOTAL TECHNICAL SCORE RESPECTIVELY THERETO, OFFERORS
ARE SUFFICIENTLY INFORMED OF DEGREE OF IMPORTANCE TO BE ACCORDED TO EACH
EVALUATION CRITERIA IN RELATION TO EACH OTHER AND SUCH WEIGHTS ARE NOT
INCOMPATIBLE WITH LISTING OF CRITERIA IN DESCENDING ORDER OF IMPORTANCE.
AYDIN CORPORATION:
AYDIN CORPORATION (AYDIN) PROTESTS THE AWARD OF CONTRACT NUMBER
N00421-77-00226 TO RAYTHEON CORPORATION (RAYTHEON) BY THE NAVAL AIR
STATION, PATUXENT, MARYLAND (NAVY). AYDIN CONTENDS THAT THE NAVY'S
TECHNICAL EVLUATION OF THE PROPOSALS WAS BIASED IN FAVOR OF THE HIGHER
PRICED RAYTHEON PROPOSAL, THAT THE OUTCOME OF "COMPETITIVE" NEGOTIATIONS
WAS PREDETERMINED AND THAT THERE WAS INADEQUATE DISCLOSURE IN THE
REQUEST FOR PROPOSALS (RFP) OF THE EVALUATION FACTORS UPON WHICH AWARD
WAS BASED. THE NAVY DENIES THESE ALLEGATIONS AND CONTENDS THAT THE
RAYTHEON PROPOSAL WAS SO TECHNICALLY SUPERIOR THAT ACCEPTANCE OF ITS
HIGHER PRICE WAS FULLY JUSTIFIED.
THE RFP, ISSUED JUNE 4, 1976, REQUESTED PROPOSALS ON A FIRM FIXED
PRICE BASIS FOR 28 DIRECT VIEW CONSOLES, RELATED EQUIPMENT AND DATA.
THE CONSOLE IS A COMPONENT OF THE NAVY'S FLEET COMMAND CENTER AND
CONSISTS OF A CATHODE RAY TUDE (CRT) SCREEN WITH FOUR COLOR CAPABILITY
TO PROVIDE A VISUAL DISPLAY OF OPERATIONAL SITUATIONS. THE RFP STATED
THAT AWARD WOULD BE BASED ON THE GREATEST VALUE TO THE GOVERNMENT IN
TERMS OF PERFORMANCE RATHER THAN LOWEST PRICE. THE RFP LISTED PROPOSAL
EVALUATION FACTORS IN DESCENDING ORDER OF IMPORTANCE AS FOLLOWS:
"1. UNDERSTANDING OF THE REQUIREMENT
"2. TECHNICAL APPROACH: THE TECHNICAL FEATURES AS PROPOSED WILL BE
EVALUATED IN THE FOLLOWING ORDER OF DESCENDING IMPORTANCE:
A. OPERATION CAPABILITY
B. PERFORMANCE CHARACTERISTICS
C. SYSTEM COMPATIBILITY
D. RELIABILITY
E. EASE OF MAINTENANCE
F. DEMONSTRABILITY
G. LIFE CYCLE AND OPERATING COSTS
"3. SUPPORTABILITY (USE OF STANDARD OR NON-STANDARD OPERATING AND
MAINTENANCE COMPONENTS)
"4. ABILITY TO MEET REQUIRED DELIVERY DATES
"5. PROPOSED PRICE."
ON JULY 30, 1976, AYDIN, RAYTHEON AND SANDERS ASSOCIATES SUBMITTED
PROPOSALS. THEY WERE TECHNICALLY EVALUATED IN ACCORDANCE WITH AN
EVALUATION MATRIX WHICH ASSIGNED NUMERICAL SCORES TO THE VARIOUS
CRITERIA. THE MATRIX AND THE WEIGHTS ASSIGNED TO THE EVALUATION
CRITERIA WERE NOT DISCLOSED IN THE RFP. THE EVALUATION ALSO INCLUDED
NARRATIVE REPORTS WHICH DISCUSSED IN DETAIL THE STRENGTHS AND WEAKNESSES
OF EACH PROPOSAL. TECHNICAL DISCUSSIONS WITH EACH OFFEROR WERE
CONDUCTED AND REVISED PROPOSALS WERE RECEIVED ON OCTOBER 1, 1976. BY
LETTER OF NOVEMBER 5, 1976, AYDIN WAS INFORMED THAT ITS PROPOSAL WAS
TECHNICALLY UNACCEPTABLE AND THAT NO FURTHER REVISIONS OF IT WOULD BE
CONSIDERED. AYDIN'S REQUEST FOR A DEBRIEFING PRIOR TO AWARD WAS
REJECTED ON NOVEMBER 29, 1976 AND ON DECEMBER 3, 1976, AYDIN PROTESTED
TO THIS OFFICE (B-187961).
IN REVIEWING THE PROTEST, THE NAVY DETERMINED THAT ITS EVALUATION
MATRIX IMPROPERLY INCLUDED AT LEAST TWO FACTORS. FOR EXAMPLE THE
EVALUATION MATRIX REQUIRED SCORING FOR "QUALITY AND RESPONSIVENESS OF
PROPOSAL" AND "ORGANIZATION, PERSONNEL AND FACILITIES" NEITHER OF WHICH
WAS LISTED AS AN EVALUATION CRITERION IN THE RFP. IT THEREFORE REVISED
THE MATRIX AND BY LETTER OF DECEMBER 29, 1976 REINSTATED AYDIN INTO THE
COMPETITIVE RANGE. AYDIN WITHDREW ITS FIRST PROTEST ON JANUARY 14,
1977.
FURTHER TECHNICAL DISCUSSIONS WITH EACH OFFEROR WERE CONDUCTED. AN
RFP AMENDMENT AND LETTER OF JANUARY 14, 1977 REVISED THE SPECIFICATIONS,
REQUIRED ADDITIONAL PROPOSAL DETAIL AND REQUESTED REVISED PROPOSALS BY
JANUARY 31, 1977. BEST AND FINAL OFFERS WERE RECEIVED ON MARCH 31, 1977
AND RAYTHEON WAS AWARDED A CONTRACT ON APRIL 6, 1977 FOR $2,502,013.
AYDIN'S FINAL PRICE WAS $2,227,124 AND IT SUBMITTED A NEW PROTEST TO
THIS OFFICE ON APRIL 18, 1977.
AYDIN STATES THAT WHEN ITS INITIAL PROTEST RESULTED IN A CHANGE IN
THE EVALUATION MATRIX, THE NAVY BOOSTED RAYTHEON'S TECHNICAL SCORE TO
100 PERCENT TO ENSURE THAT RAYTHEON RECEIVED THE AWARD. THE RECORD
INDICATES THAT THE NAVY MADE A NUMBER OF TECHNICAL EVALUATIONS UNDER THE
ORIGINAL AND REVISED MATRICES AS FOLLOWS:
@@ RAYTHEON . . SANDERS . . AYDIN
ORIGINAL MATRIX (SEPT. 9, 1976) . . 98.73 . . 73.73 . . 62.45
FIRST REVISED MATRIX (NOV. 8, 1976) . . 99.3 . . 75.5 . . 59.1
SECOND REVISED MATRIX (DEC. 22, 1976) . . 100.0 . . 79.68 . . 73.04
SECOND REVISED MATRIX (FEB. 8, 1977) . . 100.0 . . 80.12 . . 80.59
SECOND REVISED MATRIX (APR. 1, 1977). . . .100.0 . . . . . 80.12 . .
. 80.59
THE RECORD INDICATES THAT THE 100 SCORE FOR RAYTHEON ON DECEMBER 22,
1976 RESULTED SOLELY FROM THE ELIMINATION FROM THE PREVIOUS MATRIX OF
THOSE EVALUATION CRITERIA WHICH WERE NOT PROPERLY REFLECTED IN THE RFP
AND THAT NO SCORE OF THE CRITERIA COMMON TO BOTH MATRICES WAS RAISED.
IT APPEARS THAT ALL OFFERORS WERE EVALUATED AGAINST THE SAME CRITERIA
BEFORE AND AFTER THE CORRECTION OF THE MATRIX.
AYDIN ALSO OBJECTS TO THE NAVY'S OVERALL EVALUATION MATRIX OF
FEBRUARY 8, 1977 WHICH ASSIGNED WEIGHTS AS FOLLOWS:
UNDERSTANDING . . . . . . .12
TECHNICAL APPROACH. . . . .10
SUPPORTABILITY. . . . . . . 5
DELIVERY. . . . . . . . . . 5
AYDIN CONTENDS ASSIGNING 73 PERCENT OF THE TOTAL SCORE TO THE FIRST
TWO CRITERIA AND ONLY 27 PERCENT TO THE LAST TWO FACTORS PLACES AN
OVERWHELMING IMPORTANCE ON THE FIRST TWO FACTORS AND THIS SHOULD HAVE
BEEN REVEALED IN THE RFP. IT ASSERTS THAT THE FAILURE TO DO SO IS
CONTRARY TO A NUMBER OF DECISIONS OF THIS OFFICE HOLDING THAT THE MERE
LISTING OF EVALUATION CRITERIA IN THE DESCENDING ORDER OF IMPORTANT IS
NOT SUFFICIENT WHERE THE WEIGHTS ARE GROSSLY OUT OF PROPORTION.
WE AGREE THAT WHETHER OR NOT NUMERICAL RATINGS ARE TO BE USED,
DEFINITIVE INFORMATION SHOULD BE GIVEN TO OFFERORS AS TO THE DEGREE OF
IMPORTANCE TO BE ACCORDED TO PARTICULAR EVALUATION CRITERIA IN RELATION
TO EACH OTHER. WE DO NOT AGREE, HOWEVER, THAT BDM SERVICE COMPANY,
B-180245, MAY 9, 1974, 74-1 CPD 237, WHICH AYDIN CITES, REQUIRES A
FINDING THAT THE DEGREE OF IMPORTANCE OF EACH EVALUATION CRITERION HERE
SHOULD HAVE BEEN MORE PRECISELY DEFINED. IN THE BDM SERVICE CASE, THE
FIRST OF FIVE CRITERIA WAS ACCORDED 72 PERCENT OF THE TOTAL WEIGHT.
HERE, THE FIRST OF FOUR CRITERIA WAS GIVEN 40 PERCENT OF THE TOTAL
WEIGHT. THE SECOND, THIRD, FOURTH AND FIFTH CRITERIA IN THE BDM SERVICE
CASE WERE GIVEN 12, 9, 4 AND 3 PERCENT RESPECTIVELY OF THE TOTAL WEIGHT.
IN THE INSTANT CASE, THE SECOND, THIRD AND FOURTH CRITERIA WERE GIVEN
33.3, 16.7 AND 10 PERCENT RESPECTIVELY OF THE TOTAL WEIGHT. THUS, WE
BELIEVE THAT LISTING THE FOUR EVLUATION CRITERIA IN THE DESCENDING ORDER
OF IMPORTANCE HERE DID INFORM THE OFFERORS OF THE BROAD SCHEME OF
SCORING TO BE EMPLOYED AND THAT THE WEIGHTS ASSIGNED IN THIS CASE ARE
COMPATIBLE WITH SUCH LISTING.
AYDIN NEXT STATES THAT ALTHOUGH THE ORIGINAL SPECIFICATIONS DID NOT
REQUIRE GROUNDED AQUIDAG COATING OR MU METAL SHIELDING FOR THE CRT, THE
NAVY REQUIRED AYDIN TO SUBMIT A REVISED PROPOSAL INCORPORATING SUCH
FEATURES. AYDIN CONTENDS THAT PROTECTIVE DEVICES OFFERED IN ITS
ORIGINAL PROPOSAL MADE THE MU METAL SHIELD SUPERFLUOUS. IT FURTHER
CONTENDS THAT AQUIDAG COATING AND MU METAL SHIELDING GREATLY INCREASES
TUBE CAPACITANCE WHICH, IN TURN, INCREASES TIME REQUIRED TO SWITCH FROM
ONE COLOR TO ANOTHER. AYDIN STATES THAT RAYTHEON HOLDS A PATENT ON THE
PRIMARY TECHNIQUE FOR REDUCING COLOR SWITCHING TIME AND THAT THE ONLY
ALTERNATIVE IS THE USE OF A WIRE MESH SCREEN IMMEDIATELY BEHIND THE
FRONT OF THE TUBE. AYDIN ASSERTS THEREFORE THAT THE REQUIRED USE OF THE
AQUIDAG COATING AND MU METAL SHIELD BIASED THE SELECTION IN FAVOR OF
RAYTHEON. NEVERTHELESS, AYDIN SUBMITTED REVISED PROPOSALS OF OCTOBER 1,
1977 AND JANUARY 14, 1977 BOTH OF WHICH INCORPORATED SUCH FEATURES AND
THE WIRE MESH SCREEN INTO ITS CRT DESIGN.
THE NAVY STATES THAT THE GROUNDED AQUIDAG COATING AND THE MU METAL
SHIELD ARE NECESSARY TO MEET ITS PERFORMANCE SPECIFICATIONS AND ARE IN
STANDARD USE THROUGHT THE INDUSTRY. IT CONTENDS, HOWEVER, THE USE OF
THESE FEATURES DOES NOT NECESSARILY REQUIRE USE OF THE PATENTED RAYTHEON
PROCESS FOR REDUCING COLOR SWITCHING TIME AND THERE ARE ALTERNATIVES
OTHER THAN USE OF WIRE MESH SCREEN FOR CORRECTING COLOR SWITCHING TIME
PROBLEMS AS SHOWN BY THE FACT THAT SANDERS PROPOSED SUCH AN ALTERNATIVE.
WE SEE NO MERIT IN AYDIN'S CONTENTION THAT THE PATENTED PROCESS FOR
REDUCING COLOR SWITCHING TIME GAVE RAYTHEON AN UNDUE ADVANTAGE. THE
RECORD REVEALS A RATIONAL BASIS FOR THE AGENCY'S INSISTENCE THAT THE
AQUIDAY COATING AND MU METAL SHIELDING BE USED IN CONNECTION WITH THE
CRT. IF THE USE OF SUCH FEATURES CREATES PROBLEMS WHICH IN THE OPINION
OF THE AGENCY, CAN BEST BE RESOLVED BY USE OF THE PATENTED PROCESS,
THERE IS NO LEGAL REQUIREMENT THAT THE AGENCY COMPROMISE ITS MINIMUM
NEEDS IN THE INTEREST OF FAIR COMPETITION. MANUFACTURING DATA SYSTEMS,
INCORPORATED, B-180608, JUNE 28, 1974, 74-1 CPD 348.
FINALLY, AYDIN CONTENDS THAT ALTHOUGH DEMONSTRABILITY WAS A SPECIFIED
TECHNICAL EVALUATION CRITERION AND DEMONSTRATIONS WERE CONDUCTED WITH
REGARD TO ITS INITIAL PROPOSAL, NONE WAS CONDUCTED AFTER THE
SPECIFICATIONS WERE CHANGED AND AYDIN INCLUDED THE AQUIDAG COATING AND
MU METAL SHIELDING FEATURES INTO ITS REVISED PROPOSALS. AYDIN STATES
THAT THIS FAILURE TO REQUIRE FURTHER DEMONSTRATIONS INDICATES THAT THE
EVALUATORS HAD CLOSED THEIR MINDS. THE NAVY STATES THAT AYDIN NEVER
REQUESTED A SECOND DEMONSTRATION AND THAT ITS EVALUATORS BELIEVED THAT A
SECOND DEMONSTRATION WAS UNWARRANTED BECAUSE EVEN IF AYDIN OBTAINED 100
PERCENT OF THE DEMONSTRABILITY SCORE, THE EFFECT ON ITS OVERALL SCORE
WOULD HAVE BEEN NEGLIGIBLE. UNDER THESE CIRCUMSTANCES, WE CANNOT
CONCLUDE THAT THE NAVY'S FAILURE TO REQUIRE A SECOND DEMONSTRATION WAS
UNREASONABLE.
ACCORDINGLY, THE PROTEST IS DENIED. IN VIEW THEREOF, AYDIN'S CLAIM
FOR PROPOSAL PREPARATION COSTS IS ALSO DENIED.
B-189357, OCTOBER 25, 1977
HEADNOTES - UNAVAILABLE
WHERE IT IS IMPOSSIBLE TO DETERMINE WITH CERTAINTY AND BY INDEPENDENT
EVIDENCE WHETHER PROTESTER'S REVISED PROPOSAL WAS RECEIVED BY THE
GOVERNMENT (I.E., DEPOSITED IN THE APPROPRIATE BID DEPOSITARY) PRIOR TO
THE DESIGNATED DEADLINE, THE INTEGRITY OF THE COMPETITIVE SYSTEM
PRECLUDES ITS CONSIDERATION FOR AWARD PURPOSES.
AMERICAN ELECTRONIC LABORATORIES, INC.:
AMERICAN ELECTRONIC LABORATORIES, INC. (AEL) PROTESTS THE DEPARTMENT
OF THE NAVY'S FAILURE TO CONSIDER ITS BEST AND FINAL OFFER SUBMITTED
UNDER REQUEST FOR PROPOSALS NO. N00383-77-R-1677, ISSUED BY THE AVIATION
SUPPLY OFFICE (ASO), PHILADELPHIA, PENNSYLVANIA.
ESSENTIALLY, THE PROTESTER ARGUES THAT IT IS ENTITLED TO A CONTRACT
AWARD BECAUSE ITS BEST AND FINAL OFFER, WHICH WAS LOWER THAN THE AWARD
PRICE, WAS TIMELY SUBMITTED AND SHOULD BE CONSIDERED EVEN THOUGH THE
CONTRACTING OFFICER MAY NOT HAVE RECEIVED IT PRIOR TO CONTRACT AWARD.
THE INSTANT SOLICITATION WAS ISSUED APRIL 26, 1977 AND REQUESTED
PROPOSALS BY 3:00 P.M. ON MAY 16, 1977. THE SOLICITATION PROVIDED THAT
HAND-CARRIED PROPOSALS WOULD BE RECEIVED IN THE DEPOSITARY DESIGNATED IN
THE SOLICITATION. TIMELY INITIAL PROPOSALS WERE SUBMITTED BY AEL
($178.00 PER UNIT) AND AMERICAN NUCLEONICS CORPORATION (ANC) ($149.00
PER UNIT). FOLLOWING RECEIPT OF INITIAL PROPOSALS, THE NAVY INCREASED
ITS REQUIREMENTS FROM 1406 TO 1526 UNITS AND CHANGED THE PACKAGING
SPECIFICATION.
ON MAY 25, 1977, AEL AND ANC WERE NOTIFIED OF THESE CHANGES BY
TELEGRAMS WHICH ALSO STATED, IN PART:
"1. YOU ARE ADVISED THAT COMPETITIVE NEGOTIATIONS FOR ARTICLES
COVERED BY RFP N00383-77-R-1677 ARE STILL OPEN AND WILL CLOSE ON 3 JUNE
1977 AT 2:00 P.M. * * * .
"2. YOU ARE ADVISED THAT A REVISED PROPOSAL MAY BE SUBMITTED BY YOU
IF YOU SO DESIRE. IT IS REQUESTED THAT SUCH PROPOSAL BE YOUR BEST AND
FINAL OFFER AND THAT IT BE SUBMITTED SO AS TO BE RECEIVED AT ASO BY THE
TIME AND DATE SET FORTH ABOVE. A REVISED PROPOSAL RECEIVED AFTER SUCH
DATE AND TIME WILL BE TREATED AS A LATE PROPOSAL IN ACCORDANCE WITH AND
SUBJECT TO THE PROVISIONS OF THE CLAUSE HEREOF ENTITLED LATE PROPOSALS.
IF YOU DO NOT ELECT TO SUBMIT A REVISED PROPOSAL YOUR EXISTING PROPOSAL
WILL BE CONSIDERED TO BE YOUR BEST AND FINAL PROPOSAL. * * * ."
THE PROTESTER CONTENDS THAT IT SUBMITTED A REVISED PROPOSAL AS
FOLLOWS:
"ON JUNE 3, 1977 THE PROTESTANT'S CONTRACT ADMINISTRATION, * * * HAND
DELIVERED THE AEL 'BEST AND FINAL OFFER' * * * TO THE PROCURING
ACTIVITY. * * * (HE) ARRIVED AT ASO'S BID BOOM #203 AT ABOUT 12:45
P.M., EDT. NO GOVERNMENT PERSONNEL WERE PRESENT AT THE RECEIVING
COUNTER IN THE BID ROOM AT THE TIME OF ARRIVAL. THE PROTESTANT'S BID
WAS DEPOSITED IN THE BID BOX CLEARLY IDENTIFIED AS SUCH. THE AEL BID
WAS CONTAINED WITHIN THE BIDDER'S LARGE WHITE ENVELOPE ADDRESSED TO THE
PROCURING ACTIVITY EXACTLY AS IDENTIFIED ON BLOCK #8 OF THE
SOLICITATION'S STANDARD FORM 33. THE BIDDER'S ENVELOPE CONTAINED, ON
ITS FACE, THE SOLICITATION NUMBER CLEARLY MARKED. IN ACCORDANCE WITH
LONG ESTABLISHED PRACTICE, NO RECEIPT STAMP WAS REQUESTED PRIOR TO
PLACING THE LETTER IN THE BID BOX, NOR COULD ONE HAVE BEEN OBTAINED IN
VIEW OF THE ABSENCE OF GOVERNMENT PERSONNEL AS NOTED ABOVE. * * * ."
AEL ARGUES THAT IT DELIVERED ITS REVISED PROPOSAL TO THE DEPOSITARY
DESIGNATED IN THE SOLICITATION PRIOR TO THE SPECIFIED DEADLINE AND,
THEREFORE, WAS ENTITLED TO HAVE ITS REVISION CONSIDERED. THE NAVY
STATES THAT, WHILE THE ENVELOPE CONTAINING AEL'S REVISED PROPOSAL MAY
HAVE BEEN TIMELY PLACED IN THE DEPOSITARY, IT WAS NOT IDENTIFIED AS A
PROPOSAL UNTIL IT WAS OPENED SEVERAL DAYS LATER, AT WHICH POINT THE NAVY
COULD NO LONGER ASCERTAIN, WITH CERTAINTY, WHETHER IT HAD BEEN SUBMITTED
BEFORE THE DESIGNATED DEADLINE. BECAUSE THERE WAS NO INDEPENDENT
EVIDENCE OF THE ACTUAL TIME OF RECEIPT OF AEL'S OFFER AND,
NOTWITHSTANDING THE FACT THAT, IF CONSIDERED, AEL'S PROPOSAL WOULD HAVE
ENTITLED IT TO AWARD, THE NAVY CONCLUDES THAT THE INTEGRITY OF THE
COMPETITIVE SYSTEM PRECLUDED CONSIDERATION OF AEL'S REVISED PROPOSAL.
WHETHER THE ENVELOPE CONTAINING AEL'S REVISED PROPOSAL WAS PLACED IN
THE DEPOSITARY PRIOR TO 2:00 P.M. ON FRIDAY, JUNE 3, AS ALLEGED BY AEL,
OR WAS PLACED THERE AT SOME SUBSEQUENT TIME, IT WAS NOT IDENTIFIED AS A
RESPONSE TO A SOLICITATION UNTIL THE AFTERNOON OF TUESDAY, JUNE 7 WHEN
IT WAS DELIVERED BY INTER-OFFICE MAIL TO THE OFFICE OF THE ASO BUYER, TO
WHOSE ATTENTION THE ENVELOPE WAS ADDRESSED. BY THAT TIME, LETTER NOTICE
OF AWARD HAD BEEN MADE TO ANC. THE NAVY CONCEDES THAT AEL'S REVISED
PROPOSAL MAY HAVE BEEN DEPOSITED PRIOR TO THE DESIGNATED CLOSING TIME.
HOWEVER, THE NAVY POINTS OUT THAT THE EVIDENCE OF TIMELY DEPOSIT IS THE
SELF-SERVING STATEMENT OF THE AEL REPRESENTATIVE WHO ALLEGEDLY DEPOSITED
THE ENVELOPE AND THE SIGN-IN SHEET MAINTAINED AT ASO WHICH INDICATES
THAT THIS INDIVIDUAL WAS AT ASO AT 1:00 P.M. ON JUNE 3.
IN ITS INITIAL REPORT ON THIS PROTEST, THE NAVY TOOK THE POSITION
THAT ALL RELEVANT EVIDENCE SHOULD BE USED TO ESTABLISH THE TIME OF
RECEIPT OF THE HAND-CARRIED PROPOSAL. SEE FIRE TRUCKS, INC., B-185743,
MAY 12, 1976, 76-1 CPD 316. IN THAT CASE, WE HELD THAT THE STRICT
EVIDENTIARY STANDARD OF RECEIPT OF BIDS IN FORMALLY ADVERTISED
PROCUREMENTS (SEE ASPR SEC. 7-2002.2(C)(II)) WAS APPLICABLE SOLELY TO
MAILED AND TELEGRAPHIC BIDS AND NOT TO HAND-CARRIED BIDS. THE SAME
RATIONALE APPEARS TO BE APPROPRIATE IN NEGOTIATED PROCUREMENTS. SEE
ASPR SEC. 7-2002.24. WE SHALL CONSIDER ALL RELEVANT EVIDENCE IN
DETERMINING WHETHER AEL'S HAND-CARRIED PROPOSAL WAS RECEIVED BY THE
GOVERNMENT PRIOR TO 2:00 P.M. ON JUNE 3.
THE NAVY HAS TAKEN THE POSITION THAT THE AVAILABLE EVIDENCE IS EITHER
SELF-SERVING (AEL'S CONTRACT ADMINISTRATOR'S AFFIDAVIT) OR MERELY
CONSISTENT WITH THE POSSIBILITY OF TIMELY SUBMISSION (ASO'S SIGN-IN
SHEET), AND HAS CONCLUDED, ON THE BASIS OF OUR DECISION IN FREE STATE
BUILDERS, INC., B-184155, FEBRUARY 26, 1976, 76-1 CPD 133, THAT, SINCE
THE INTEGRITY OF THE COMPETITIVE SYSTEM DEMANDS MORE THAN THE MERE
POSSIBILITY OF TIMELY SUBMISSION, THE REVISED PROPOSAL OF AEL MUST BE
REJECTED.
IN FREE STATE WE DENIED A SIMILAR PROTEST ESSENTIALLY BECAUSE THERE
WAS NO INDEPENDENT EVIDENCE TO ESTABLISH THAT THE BID WAS OUT OF THE
PROTESTER'S CONTROL AND IN THE BID BOX PRIOR TO BID OPENING. THE
PROTESTER ATTEMPTS TO DISTINGUISH FREE STATE BUILDERS, INC. BY SHOWING
THAT, WHEREAS IN THAT CASE THE FAILURE OF ANYONE TO HEAR A BID BOX ALARM
PRIOR TO THE TIME SET FOR BID OPENING WAS CIRCUMSTANTIAL EVIDENCE OF
LATE SUBMISSION, HERE ALL AVAILABLE EVIDENCE IS CONSISTENT WITH TIMELY
RECEIPT OF THE LATE-DISCOVERED PROPOSAL. THE PROTESTER RELIES ON THE
AFFIDAVIT OF ITS EMPLOYEE, THE SIGN-IN SHEET AT ASO, AND THE FACT THAT,
FOR THE REVISED PROPOSAL TO HAVE REACHED THE BUYER'S DESK BY 4:28 P.M.
ON TUESDAY, JUNE 7 THROUGH THE INTER-OFFICE MAIL SYSTEM, IT HAD TO HAVE
BEEN RECEIVED IN THE BID BOX AT LEAST 24 HOURS EARLIER. THE PROTESTER
CONTENDS THAT THE PARTY WHO SUBMITTED THE REVISED PROPOSAL WAS NOT AT
ASO ON MONDAY, JUNE 6, AND THAT, THEREFORE, IT IS ONLY REASONABLE TO
CONCLUDE THAT THE PROPOSAL WAS SUBMITTED PRIOR TO 2:00 P.M. ON JUNE 3,
AS STATED BY HIS AFFIDAVIT.
THOUGH PROBATIVE OF TIMELY RECEIPT, THE EVIDENCE RELIED UPON BY THE
PROTESTER IS FAR FROM INDEPENDENT OR CONCLUSIVE AS TO THE ACTUAL TIME AT
WHICH THE REVISED PROPOSAL OF AEL WAS PLACED IN THE DEPOSITARY. WE ARE
ADVISED BY THE NAVY THAT THE TIME FOR DELIVERY THROUGH INTER-OFFICE MAIL
AT THE INSTALLATION INVOLVED IS ORDINARILY ONE OR TWO DAYS. THE NAVY
ALSO INDICATES THAT, WHILE THE ASO BID BOX WAS OPENED EACH BUSINESS DAY
AT 2:00 P.M., IT MAY ALSO HAVE BEEN OPENED AFTER 2:00 P.M.
CONSEQUENTLY, A LETTER DELIVERED TO THE ADDRESSEE AT 4:28 ON JUNE 7
COULD HAVE BEEN REMOVED FROM THE DEPOSITARY SOMETIME ON OR AFTER 2:00
P.M. ON EITHER FRIDAY, JUNE 3 OR MONDAY, JUNE 6. SINCE THERE IS NO
INDEPENDENT EVIDENCE THAT THE REVISED PROPOSAL WAS IN THE DEPOSITARY
PRIOR TO THE 2:00 P.M. DEADLINE WE AGREE WITH THE NAVY THAT THE REVISED
PROPOSAL PROPERLY WAS NOT CONSIDERED FOR AWARD PURPOSES. S. PUMA AND
COMPANY, INCORPORATED, B-182936, APRIL 17, 1975, 75-1 CPD 230.
THE NAVY HAS INDICATED THAT, AS A RESULT OF THE PROBLEMS ENCOUNTERED
IN THIS CASE, IT HAS INSTITUTED A PROCEDURE BY WHICH ALL ENVELOPES
REMOVED FROM THE ASO DEPOSITARY AT 2:00 P.M.-- AND NOT MERELY THOSE
RECOGNIZABLE AS CONTAINING OFFERS-- ARE MARKED AS HAVING BEEN REMOVED AT
THEAT TIME. ALTHOUGH IT IS SPECULATIVE WHETHER THIS ACTION WOULD HAVE
BENEFITED THE PROTESTER BECAUSE THERE IS NO INDEPENDENT EVIDENCE THAT
THE FINAL OFFICER WAS IN THE DEPOSITARY PRIOR TO THE CLOSING TIME, WE
NEVERTHELESS ENDORSE THE PROCEDURE IMPLEMENTED.
ACCORDINGLY, THE PROTEST IS DENIED.
B-189544, OCTOBER 25, 1977
HEADNOTES - UNAVAILABLE
1. WORKSHEETS AND OTHER INFORMATION SUBMITTED BY BIDDER TO AGENCY IN
SUPPORT OF BID CORRECTION WILL BE CONSIDERED BY GAO NOTWITHSTANDING THAT
SAME INFORMATION HAS NOT BEEN FURNISHED PROTESTER.
2. WHERE MISTAKE IN BID WAS ALLEGED PRIOR TO AWARD AND BIDDER
PRESENTED CLEAR AND CONVINCING EVIDENCE OF MISTAKE AND OF BID ACTUALLY
INTENDED, AND BID AS CORRECTED REMAINS LOW BY SUBSTANTIAL AMOUNT, GAO
WILL NOT DISTURB ADMINISTRATIVE DETERMINATION TO ALLOW CORRECTION.
3. FACT THAT PORTIONS OF BID MAY BE UNBALANCED DOES NOT DISTURB
CONTRACTING OFFICER'S DETERMINATION THAT CLEAR AND CONVINCING EVIDENCE
OF MISTAKE AND INTENDED BID EXISTS AS TO OTHER PORTIONS OF BID.
S. J. GROVES & SONS COMPANY:
S. J. GROVES & SONS COMPANY (GROVES) PROTESTS THE CORRECTION OF THE
LOW BID OF B4 CONSTRUCTORS (B4) UNDER INVITATION FOR BIDS (IFB) NO.
DC-7270 ISSUED BY THE BUREAU OF RECLAMATION, UNITED STATES DEPARTMENT OF
THE INTERIOR (INTERIOR), FOR THE CONSTRUCTION OF A SECTION OF THE
TEHAMA-COLUSA CANAL AT ITS CENTRAL VALLEY PROJECT, CALIFORNIA.
ON APRIL 19, 1977, INTERIOR OPENED THE SIX BIDS WHICH HAD BEEN
SUBMITTED IN RESPONSE TO THE SUBJECT IFB. B4 SUBMITTED THE LOW BID OF
$18,970,693. GROVES SUBMITTED THE NEXT LOW BID OF $22,922,322. THE
GOVERNMENT ESTIMATE FOR THE WORK WAS $25,149,730. OWING TO THE
DISPARITY BETWEEN THE LOW BID AND THE NEXT LOW BID AND GOVERNMENT
ESTIMATE, B4 WAS CONTACTED BY THE CONTRACTING OFFICER ON APRIL 29, 1977,
AND REQUESTED TO VERIFY ITS BID PRICE. BY MAILGRAM DATED MAY 4, 1977,
B4 ADVISED THAT IT ERRED IN ITS LUMP-SUM SUBTOTAL BID OF $1,740,000 FOR
ITEMS 60 THROUGH 83 OF THE IFB. ON MAY 6, 1977, B4 FURNISHED DETAILED
INFORMATION WHICH INDICATED THAT IN ENTERING ITS LUMP-SUM BID FOR ITEMS
60-83 (FURNISHING AND LAYING PIPE) IT HAD FAILED TO ENTER THE DIRECT
COSTS FOR THE SIPHONS (ITEMS 79-83) ON THE BID SUMMARY SHEET, THEREBY
UNDERESTIMATING ITS BID BY $1,826,690. BY TELEGRAM DATED JULY 3, 1977,
GROVES PROTESTED TO THIS OFFICE AGAINST CORRECTION ON THE GROUNDS THAT
B4 DID NOT MAKE ANY MISTAKE IN ITS BID AND THAT IN THE EVENT OF A
MISTAKE BY B4, IT HAS NOT BEEN SHOWN BY CLEAR AND CONVINCING EVIDENCE
WHAT THE INTENDED BID WOULD HAVE BEEN. ON JULY 15, 1977, AWARD WAS MADE
TO B4 IN ORDER TO ASSURE TIMELY COMPLETION OF THE PROJECT.
THE PROTESTER RAISES A NUMBER OF OBJECTIONS TO INTERIOR'S ACTIONS IN
THIS CASE. INITIALLY IT OBJECTS TO THE AWARD BEING MADE WHILE ITS
PROTEST WAS PENDING. IT CONTENDS THAT ALTHOUGH BIDS WERE DUE TO EXPIRE
ON JULY 18, INTERIOR SHOULD HAVE ASKED FOR BID EXTENSIONS RATHER THAN
PROCEED WITH AN AWARD TO B4. GROVES ALSO OBJECTS TO THE FACT THAT
INTERIOR HAS REFUSED IT ACCESS TO THE WORKSHEETS AND RELATED DOCUMENTS
FURNISHED BY B4 IN SUPPORT OF ITS CLAIM OF BID MISTAKE. IT URGES THAT
OUR OFFICE SHOULD EITHER RULE IN FAVOR OF PERMITTING ACCESS OR,
ALTERNATIVELY, DRAW AN ADVERSE INFERENCE AS TO THE INTEGRITY AND
EVIDENTIARY WEIGHT OF THESE WORKSHEETS AND DOCUMENTS.
WITH REGARD TO INTERIOR'S DECISION TO MAKE AWARD IMMEDIATELY TO B4,
OUR BID PROTEST PROCEDURES, 4 CFR PART 20 (1977) PROVIDE IN PERTINENT
PART:
"SEC. 20.4 WITHHOLDING OF AWARD. WHEN A PROTEST HAS BEEN FILED
BEFORE AWARD THE AGENCY WILL NOT MAKE AN AWARD PRIOR TO RESOLUTION OF
THE PROTEST EXCEPT AS PROVIDED IN APPLICABLE PROCUREMENT REGULATIONS."
THE RECORD CONTAINS THE FINDINGS AND DETERMINATIONS BY THE AGENCY AS
REQUIRED BY FEDERAL PROCUREMENT REGULATIONS (FPR) 1-2.407-8(B)(4) (AMEND
68). IN THE INSTANT CASE THE RECORD INDICATES THAT AWARD ON JULY 15 WAS
NECESSARY TO PREVENT THE B4 BID FROM EXPIRING AND TO ASSURE TIMELY
COMPLETION OF THE INSTANT PROJECT. GROVES, HOWEVER, QUESTIONS WHETHER
IT WAS NECESSARY TO HAVE MADE AWARD IN THE FACE OF ITS PENDING PROTEST.
IT SUGGESTS THAT THE AWARD WAS MADE SOLELY TO PREVENT B4'S LOW BID FROM
EXPIRING AND NOT BECAUSE OF ANY URGENCY. MOREOVER, IT QUESTIONS WHETHER
TELEPHONIC NOTICE OF THE AWARD TO OUR ASSOCIATE GENERAL COUNSEL
(FOLLOWED 10 DAYS T;EREAFTER BY WRITTEN NOTICE) COMPLIES WITH THE NOTICE
REQUIREMENT OF OUR BID PROTEST PROCEDURES.
IN THIS REGARD WE HAVE HELD THAT AWARD OF A CONTRACT WHILE A PROTEST
IS PENDING IS NOT IMPROPER, SO LONG AS IT IS DETERMINED THAT PROMPT
AWARD WILL BE ADVANTAGEOUS TO THE GOVERNMENT AND GAO IS NOTIFIED BY THE
AGENCY OF ITS INTENT TO MAKE THE AWARD. PRICE WATERHOUSE & CO.,
B-186779, NOVEMBER 15, 1976, 76-2 CPD 412. FURTHER, WE HAVE HELD THAT
THE NOTICE REQUIREMENT IS MET IF OUR OFFICE IS NOTIFIED. SEE PRICE
WATERHOUSE, SUPRA. THEREFORE, WE SEE NOTHING IMPROPER WITH THE AGENCY'S
PROVIDING OUR ASSOICATE GENERAL COUNSEL WITH TELEPHONIC NOTICE OF THE
AWARD FOLLOWED BY FORMAL WRITTEN NOTIFICATION. NOR DO WE FIND ANY
IMPROPRIETIES IN THE AGENCY'S DETERMINATION THAT PROMPT AWARD WAS
NECESSARY FOR THE REASONS CITED IN ITS FINDINGS AND DETERMINATION.
IN ORDER TO PERMIT CORRECTION OF AN ERROR IN BID PRIOR TO AWARD A
BIDDER MUST SUBMIT "CLEAR AND CONVINCING EVIDENCE" (1) THAT A MISTAKE
WAS MADE (2) THE NATURE OF THE MISTAKE, AND (3) THE BID PRICE ACTUALLY
INTENDED. 53 COMP.GEN. 232 (1973). THESE REQUIREMENTS FOR THE
CORRECTION OF A BID ARE FOUND IN FPR SEC. 1-2.406-3(2) (AMEND 165),
WHICH STATES THAT:
"A DETERMINATION MAY BE MADE PERMITTING THE BIDDER TO CORRECT HIS BID
WHERE THE BIDDER REQUESTS PERMISSION TO DO SO AND CLEAR AND CONVINCING
EVIDENCE ESTABLISHES BOTH THE EXISTENCE OF A MISTAKE AND THE BID
ACTUALLY INTENDED * * * . IF THE EVIDENCE IS CLEAR AND CONVINCING ONLY
AS TO THE MISTAKE, BUT NOT AS TO THE INTENDED BID, A DETERMINATION
PERMITTING THE BIDDER TO WITHDRAW HIS BID MAY BE MADE."
AT THE OUTSET WE NOTE THAT BY LETTER OF JULY 20, 1977 GROVES SOUGHT
ACCESS FROM OUR OFFICE UNDER THE FREEDOM OF INFORMATION ACT, 5 U.S.C.
552, TO WORKSHEETS AND RELATED DOCUMENTS FURNISHED BY B4 TO INTERIOR IN
SUPPORT OF ITS MISTAKE IN BID CLAIM, WHICH IN TURN WERE FURNISHED TO US
IN CONNECTION WITH THIS PROTEST. BY LETTER DATED JULY 26, 1977, WE
ADVISED THE PROTESTER THAT RELEASE OF THESE DOCUMENTS SHOULD BE SOUGHT
FROM INTERIOR, AS THAT AGENCY AND NOT GAO HAS THE PRIMARY INTEREST IN
SUCH DOCUMENTS. THEREAFTER, WE WERE ADVISED BY THE PROTESTER THAT
PENDING ITS FREEDOM OF INFORMATION ACT REQUEST TO INTERIOR OUR OFFICE
SHOULD NEVERTHELESS DECIDE THE MERITS OF ITS PROTEST. HOWEVER, GROVES
ARGUES THAT OUR OFFICE SHOULD NOT GIVE FULL WEIGHT TO THOSE PORTIONS OF
THE RECORD AND THE WORKSHEETS WHICH IT HAS NOT BEEN PERMITTED TO
INSPECT.
WE HAVE OFTEN TAKEN THE POSITION THAT DOCUMENTS WHICH ARE NOT
FURNISHED TO THE PROTESTER BECAUSE THEY CONTAIN INFORMATION CONSIDERED
BY THE AGENCY TO BE PROPRIETARY WILL BE CONSIDERED AND ACCORDED FULL
WEIGHT BY OUR OFFICE IN DECIDING A BID PROTEST. TECHPLAN CORPORATION,
B-180795, SEPTEMBER 16, 1974, 74-2 CPD 169, UNICARE HEALTH SERVICES,
INC., B-180262, B-180305, APRIL 5, 1974, 74-1 CPD 175. IN FACT, WE HAVE
IN THE PAST CONSIDERED WORKSHEETS NOT PROVIDED THE PROTESTER IN A CASE
CONCERNING A BID CORRECTION. SEE B-174608, MAY 9, 1972. IN ACCORDANCE
WITH OUR POLICY IN SUCH MATTERS WE WILL CONSIDER AND ACCORD FULL WEIGHT
TO ALL MATERIALS CONTAINED IN THE RECORD NOTWITHSTANDING THE FACT THAT
SOME OF THESE MATERIALS MAY NOT HAVE BEEN RELEASED TO GROVES.
INTERIOR ALLOWED CORRECTION IN THIS CASE ON THE FOLLOWING BASIS:
"ON PAGE 5 OF 8 PAGES OF THE ORIGINAL BID SUMMARY SHEET, THERE ARE NO
PRICES ENTERED FOR THE SIPHONS, SCHEDULE ITEMS 79 THROUGH 83, FOR LABOR,
EQUIPMENT, AND MATERIALS. THERE IS A NOTE THAT THE CIPHON COSTS WERE TO
BE ADDED BY RB (ROBERT BROSAMER). ON THE XEROX COPY OF THIS PAGE, THE
LABOR, RENTAL EQUIPMENT, MATERIAL, AND TOTAL DIRECT COSTS HAVE BEEN
ENTERED IN RED. THE TOTAL DIRECT COST OF THE SIPHONS IS SHOWN IN RED.
THE TOTAL DIRECT COST OF THE SIPHONS IS SHOWN AS BEING $1,826,690. B4
CONSTRUCTORS PLANNED ON CONSTRUCTING THE SIPHONS USING ITS OWN CREWS.
ON THE BID ESTIMATE WORKSHEET FOR THE SIPHONS, SCHEDULE ITEMS 79 THROUGH
83 IT SHOWS THE TOTAL LABOR COSTS BASED ON $46.64 PER CUBIC YARD AT
$589,781; EQUIPMENT RENT AT $16.89 PER CUBIC YARD FOR A TOTAL OF
$213,660; AND PERMANENT MATERIALS AT $25.60 PER CUBIC YARD FOR A TOTAL
OF $323,714. B4 CONSTRUCTORS THEN CONVERTED THESE UNIT PER CUBIC YARD
PRICES TO UNIT PER LINEAR FOOT PRICES. THESE UNIT PRICES WERE COMPUTED
TO BE $172 PER LINEAR FOOT FOR LABOR COSTS; $62 PER LINEAR FOOT FOR
EQUIPMENT RENT; AND $95 PER LINEAR FOOT FOR PERMANENT MATERIALS. THE
COSTS OF THESE THREE ITEMS BASED ON THE NUMBER OF LINEAR FEET STATED FOR
THE SCHEDULE ITEMS ARE $586,520; 211,420, AND 323,950 FOR A TOTAL COST
OF $1,121,890. TO THIS AMOUNT, B4 CONSTRUCTORS ADDED THE COST OF REBAR
UNDER THE COLUMN HEADING 'SUBCONTRACT'. IT ESTIMATED THE TOTAL COST OF
REBAR TO BE $704,800 AND ADDED THIS AMOUNT TO THE $1,121,890 AND
OBTAINED ITS TOTAL LUMP SUM PRICE OF $1,826.690 FOR THE SIPHONS. THERE
IS NO EVIDENCE THAT SHOWS THE PRICES FOR THE SIPHONS, SCHEDULE ITEMS 79
THROUGH 83 WERE ENTERED INTO THE BID SUMMARY SHEET. ALSO, THERE IS NO
EVIDENCE TO SHOW THAT THE PRICES FOR THE SIPHONS HAD BEEN ENTERED ON ANY
OTHER WORKSHEETS OR INTO THE BID.
"AS FURTHER EVIDENCE TO SUPPORT B4 CONSTRUCTORS' CONTENTION THAT IT
THOUGHT THE PRICE OF THE SIPHONS WAS IN THE BASE NUMBERS ENTERED
OPPOSITE THE WORD 'START' AT THE TOP OF THE BID SUMMARY: PLUS & MINUR
SHEET, THERE ARE TWO INSTANCES WHERE THE PRICE FOR REBAR USED TO
CONSTRUCT THE SIPHONS IS ADJUSTED. THE FIRST INSTANCE OCCURS ON THE
SECOND PAGE OF THE BID SUMMARY: PLUS & MINUS SHEET, SECOND LINE DOWN
FROM THE 'START' LINE. ON THIS LINE THERE IS A PLUS $43,400 AFTER
'REBAR KLINGER'. THIS PLUS IS A RESULT OF A BID FURNISHED BY KLINGER
FOR REBAR IN THE AMOUNT OF $1,181,010 WHICH IS $43,400 HIGHER THAN THE
$1,137,600 ESTIMATED BY B4 CONSTRUCTORS. THUS, B4 CONSTRUCTORS ENETERED
THE $43,400 AS A PLUS ON THE BID SUMMARY: PLUS & MINUS SHEET TO MAKE UP
THE DIFFERENCE BETWEEN ITS ORIGINAL ESTIMATED PRICE FOR REBAR AND THE
BID PRICE SUBMITTED BY KLINGER. AFTER RECEIVING THE REBAR BID FROM
KLINGER, B4 CONSTRUCTORS RECEIVED ANOTHER BID FOR REBAR FROM JUDSON IN
THE AMOUNT OF $1,127,551. THIS BID WAS $53,459 LOWER THAN THE BID FROM
KLINGER. THEREFORE, THE SECOND INSTANCE THAT A CHANGE OCCURS IS ON PAGE
3 OF THE BID SUMMARY: PLUS & MINUS SHEET, 7TH LINE BELOW THE 'START'
LINE. ON THIS LINE THERE IS ENTERED A MINUS $53,450 FOR 'REBAR-JUDSON'.
IN VIEW OF THESE TWO INSTANCES WHERE THE REBAR PRICES ARE ADJUSTED, IT
IS RATHER EVIDENCE THAT B4 CONSTRUCTORS THROUGHT THAT THE PRICE FOR
CONSTRUCTING THE SIPHONS WAS INCLUDED IN THE 'START' PRICE ENTERED AT
THE TOP OF PAGE 1 OF THE BID SUMMARY: PLUS & MINUS SHEET. THE REBAR
BIDS ARE SHOWN ON THE 'SUBCONTRACT & MATERIAL QUOTES' SHEET MARKED
'REINFORCING'."
A CORRECTED BID OF $20,797,383 ($18,970,693 PLUS $1,826,690) WAS THUS
DERIVED. IN ADDITION, IT SHOULD BE NOTED THAT THE IFB CONTAINED A
PROVISION REQUIRING A BIDDER TO WAIVE $37,000 PLUS 2 PERCENT OF THE
ORIGINAL BID OVER $1 MILLION OF AN AMOUNT REQUESTED FOR BID CORRECTION.
IN ACCORDANCE WITH THIS PROVISION, INTERIOR HAS COMPUTED B4'S WAIVER TO
BE $396,913.86, WHICH AMOUNT IS TO BE DEDUCTED FROM THE CONTRACT
PAYMENTS.
GROVES QUESTIONS WHY B4 DID NOT INSTANTLY OR WITHIN A FEW DAYS OF BID
OPENING ASSERT ITS CLAIM OF MISTAKE. THE PROTESTER POINTS OUT THAT THE
ERROR WAS NOT ALLEGED UNTIL B4 RESPONDED TO THE CONTRACTING OFFICER'S
APRIL 29 REQUEST FOR BID VERIFICATION SOME TIME AFTER THE APRIL 19 BID
OPENING.
WHEN IT IS SUSPECTED THAT THE LOW BIDDER HAS MADE A MISTAKE, FPR
1-2.406-1 (FPR CIRC. 1) REQUIRES THE CONTRACTING OFFICER TO SEEK
VERIFICATION. WE DO NOT FIND THAT EITHER THE CONTRACTING OFFICER OR B4
ACTED IMPROPERLY OR IN SUCH A MANNER THAT VERACITY OF B4S CLAIM MAY BE
QUESTIONED. THEY BOTH FOLLOWED THE APPLICABLE REGULATIONS, THE
CONTRACTING OFFICER IN SEEKING VERIFICATION AND B4 BY RESPONDING IN A
TIMELY MANNER. MOREOVER, FPR 1-2.406-1 (FPR CIRC. 1) PERMITS BID
CORRECTION ANYTIME PRIOR TO AWARD.
NEXT THE PROTESTER TAKES ISSUE WITH INTERIOR'S DETERMINATION THAT THE
EVIDENCE CLEARLY AND CONVINCINGLY ESTABLISHES A MISTAKE IN BID. IT
CONTENDS THAT THE B4 BID IS UNBALANCED IN SEVERAL AREAS AND HENCE THERE
IS NO REASON TO BELIEVE THAT A MISTAKE WAS MADE IN THE SIPHON PORTION OF
THE BID. MOREOVER, BASED ON INFORMATION MADE AVAILABLE TO GROVES, IT
SUSPECTS THAT THE B4 BID WAS SIGNED IN BLANK BY ITS PRESIDENT WITH THE
BID FIGURES TO BE FILLED IN LATER BY ANOTHER OFFICIAL OF THE COMPANY.
IF SO, GROVES ARGUES THAT THE BID ORIGINALLY SUBMITTED BY B4 IS ITS
INTENDED BID. IN SHORT, GROVES ARGUES THAT BID CORRECTION WAS CONTRARY
TO THE INTEGRITY OF THE BID SYSTEM UNDER THE CIRCUMSTANCES OF THIS CASE.
IN OUR VIEW, HOWEVER, THE FACT THAT B4'S BID ON SOME OF THE 145 ITEMS
MAY HAVE BEEN LOWER THAN INTERIOR'S ESTIMATE FOR SUCH ITEMS DOES NOT
PREVENT A DETERMINATION THAT B4 MADE A MISTAKE IN OTHER PORTIONS OF ITS
BID. EVEN IF, AS GROVES SUGGESTS, THE PRESIDENT OF B4 SIGNED ITS BID IN
BLANK, INTENDING THAT IT BE FILLED IN BY AN EMPLOYEE, IT IS CLEAR FROM
THE WORKPAPERS WHICH CONTAIN AN ESTIMATE FOR THE DIRECT COST OF
CONSTRUCTING THE SIPHONS THAT THE INTENDED BID WAS NOT SUBMITTED.
ALTHOUGH OUR OFFICE HAS RETAINED THE RIGHT OF REVIEW IN BID MISTAKE
CASES, THE AUTHORITY TO CORRECT BID MISTAKES IS VESTED IN THE PROCURING
AGENCY AND THE WEIGHT TO BE GIVEN THE EVIDENCE IN SUPPORT OF AN ALLEGED
MISTAKE IS A QUESTION OF FACT TO BE CONSIDERED BY THE ADMINISTRATIVELY
DESIGNATED EVALUATOR OF EVIDENCE, WHOSE DECISION WILL NOT BE DISTURBED
BY OUR OFFICE UNLESS THERE IS NO REASONABLE BASIS FOR THE DECISION. 53
COMP.GEN. 232, SUPRA, AT 235. HERE, WE HAVE CAREFULLY REVIEWED THE
COMPLETE RECORD, AND IT IS OUR CONCLUSION THAT THE RECORD REASONABLY
SUPPORTS THE AGENCY'S DETERMINATION TO PERMIT THE B4 BID TO BE
CORRECTED.
IN VIEW OF THE FOREGOING, THE PROTEST IS DENIED.
B-189739, OCTOBER 25, 1977
HEADNOTES - UNAVAILABLE
LATE BID SENT BY REGULAR MAIL MAY NOT BE CONSIDERED BECAUSE THERE IS
NO DOCUMENTARY EVIDENCE AVAILABLE TO INDICATE WHEN BID INITIALLY WAS
RECEIVED AT GOVERNMENT INSTALLATION AND IN THE ABSENCE THEREOF IT CANNOT
BE DETERMINED WHETHER BID'S LATE RECEIPT IN BID OPENING OFFICE WAS DUE
TO GOVERNMENT MISHANDLING.
INSTRUMENTATION AND MECHANICAL SYSTEMS, INC.:
INSTRUMENTATION AND MECHANICAL SYSTEMS, INC. (IMS) PROTESTS THE
REJECTION OF ITS BID AS LATE BY THE CORPS OF ENGINEERS, LOS ANGELES
DISTRICT (CORPS). IMS MAINTAINS THAT ITS BID SHOULD HAVE BEEN
CONSIDERED BECAUSE LATE RECEIPT WAS DUE TO MISHANDLING AT THE
INSTALLATION. IMS CONTENDS THAT THE REJECTION OF ITS BID WAS ARBITRARY
AND CAPRICIOUS THEREBY ENTITLING THE FIRM TO BID PREPARATION COSTS.
INVITATION FOR BIDS (IFB) DACW09-77-B-0016 WAS ISSUED ON APRIL 14,
1977, WITH A SCHEDULED BID OPENING TIME OF 1:00 P.M. ON MAY 11, 1977.
THE IMS ENVELOPE WHICH CONTAINED THE FIRM'S BID WAS DISCOVERED AT
APPROXIMATELY 1:15 P.M. IN THE INCOMING MAIL BASKET IN THE PROCUREMENT
AND SUPPLY DIVISION, THE OFFICE RESPONSIBLE FOR RECEIPT OF BIDS. THE
LETTER HAD BEEN SENT BY ORDINARY MAIL AND HAD BEEN OPENED PRIOR TO ITS
RECEIPT BY THE PROCUREMENT AND SUPPLY DIVISION.
THE AGENCY REPORT STATES THAT THE CORPS' MAIL IS REGULARLY PICKED UP
AT THE POST OFFICE AT APPROXIMATELY 10:00 A.M. AND 12:00 NOON. THE POST
OFFICE IS LOCATED ON THE FIRST FLOOR OF THE FEDERAL BUILDING AND THE
CORPS' OFFICES ARE ON THE SIXTH FLOOR. AN AFFIDAVIT OF THE MAIL CLERK
WHO PICKED UP THE MAIL AT 12 NOON INDICATES THAT:
" * * * MY STANDARD PRACTICE IS THAT WHEN I COME UPON AN ENVELOPE
MARKED AS A 'BID,' I IMMEDIATELY DATE AND TIME STAMP IT AND PERSONALLY
DELIVER IT TO THE BID OPENING OFFICER IN THE PROCUREMENT AND SUPPLY
DIVISION OFFICE, SOME 250 FEET AND 45 SECONDS DOWN THE CORRIDOR. ALL
OTHER MAIL IS SORTED, BUT NOT DATE OR TIME STAMPED.
"ON 11 MAY 1977, I MADE MY REGULAR PICK UP AT THE POST OFFICE AT
12:00 NOON AND RETURNED TO THE MAIL ROOM BY 12:05 P.M. IMMEDIATELY
THEREAFTER I SORTED THE MAIL BUT DID NOT RECOGNIZE ANY ENVELOPE AS A
'BID.' THUS, I DID NOT DATE OR TIME STAMP ANY MAIL * * * INCLUDED IN THE
12:00 NOON PICK UP. I WAS FINISHED SORTING THIS MAIL BEFORE 12:30 P.M.,
AT WHICH TIME ANOTHER CLERK BEGAN DELIVERING THE MAIL TO ALL CORPS OF
ENGINEERS' OFFICES ON HIS REGULAR DELIVERY ROUTE."
THE IMS BID ENVELOPE CONTAINED THE IDENTIFICATION "BIS UNDER
REFERENCE NO. DACW09-77-B-0016" AS REQUIRED BY THE IFB. THE CORPS
CONCEDES THAT IF THE BID WAS RECEIVED AND HANDLED PROPERLY IN THE
MAILROOM, THE BID WOULD HAVE BEEN HAND DELIVERED TO THE BID OPENING
OFFICER PRIOR TO THE 1:00 P.M. BID OPENING. HOWEVER, THE BID WAS
DISCOVERED WITH OTHER INCOMING MAIL, AT 1:15 P.M.
INITIALLY THE CORPS' LOS ANGELES DISTRICT PROPOSED TO ACCEPT THE IMS
BID. RMP MARINE SERVICES, INC. (RMP), THE APPARENT LOW BIDDER, THEN
PROTESTED ANY AWARD TO IMS. IN JULY 1977, THE OFFICE OF THE CHIEF OF
ENGINEERS DISAGREED WITH THE DISTRICT OFFICE AND CONCLUDED THAT BECAUSE
THE ENVELOPE CONTAINING IMS' BID WAS NOT TIME/DATE STAMPED AND NO OTHER
DOCUMENTARY EVIDENCE IS AVAILABLE TO ESTABLISH TIME OF RECEIPT AT THE
GOVERNMENT INSTALLATION "IT IS IMPOSSIBLE TO DETERMINE WHETHER THE BID
COULD HAVE BEEN TIMELY DELIVERED UNDER NORMAL MAILROOM PROCEDURES * * *
AND WHETHER GOVERNMENT MISHANDLING WAS THE SOLE REASON FOR ITS LATE
ARRIVAL AT THE BID OPENING." THE CORPS REJECTED IMS' BID AND ACCEPTED
RMP'S BID. AFTER LEARNING OF THIS DECISION, IMS PROTESTED TO OUR
OFFICE.
ARMED SERVICES PROCUREMENT REGULATION (ASPR SEC. 7-2002.2 (1976 ED.),
WHICH DELINEATES THE CONDITIONS FOR CONSIDERATION OF LATE BIDS, WAS
INCORPORATED INTO CLAUSE 7 OF THE "INSTRUCTIONS TO BIDDERS" OF THE IFB.
THE LATE BID CLAUSE PROVIDES:
"7. LATE BIDS. MODIFICATION OF BIDS OR WITHDRAWAL OF BIDS (1974
SEP)
(A) ANY BID RECEIVED AT THE OFFICE DESIGNATED IN THE SOLICITATION
AFTER THE EXACT TIME SPECIFIED FOR RECEIPT WILL NOT BE CONSIDERED UNLESS
IT IS RECEIVED BEFORE AWARD IS MADE AND EITHER:
(I) IT WAS SENT BY REGISTERED OR CERTIFIED MAIL NOT LATER THAN THE
FIFTH CALENDAR DAY PRIOR TO THE DATE SPECIFIED FOR RECEIPT OF BIDS
(E.G., A BID SUBMITTED IN RESPONSE TO A SOLICITATION REQUIRING RECEIPT
OF BIDS BY THE 20TH OF THE MONTH MUST HAVE BEEN MAILED BY THE 15TH OR
EARLIER); OR,
(II) IT WAS SENT BY MAIL (OR TELEGRAM IF AUTHORIZED) AND IT IS
DETERMINED BY THE GOVERNMENT THAT THE LATE RECEIPT WAS DUE SOLELY TO
MISHANDLING BY THE GOVERNMENT AFTER RECEIPT AT THE GOVERNMENT
INSTALLATION.
(C) THE ONLY ACCEPTABLE EVIDENCE TO ESTABLISH
(II) THE TIME OF RECEIPT AT THE GOVERNMENT INSTALLATION IS THE
TIME/DATE STAMP OF SUCH INSTALLATION ON THE BID WRAPPER OR OTHER
DOCUMENTARY EVIDENCE OF RECEIPT MAINTAINED BY THE INSTALLATION."
THE QUESTIONS PRESENTED ARE WHETHER IMS' BID WAS RECEIVED ON TIME
AND, IF SO, WHETHER ITS LATE DISCOVERY WAS DUE SOLELY TO GOVERNMENT
MISHANDLING. PARAGRAPH (A)(II) OF THE LATE BID CLAUSE PROVIDES THAT A
BID MAY BE CONSIDERED IF IT IS DETERMINED THAT THE LATE RECEIPT WAS DUE
SOLELY TO GOVERNMENT MISHANDLING AFTER RECEIPT AT THE INSTALLATION.
BEFORE WE CAN CONSIDER THE QUESTION OF MISHANDLING, THE TIME OF
RECEIPT AT THE INSTALLATION MUST BE ESTABLISHED. B. E. WILSON
CONTRACTING CORP., 55 COMP.GEN. 220 (1975), 75-2 CPD 145. SUCH RECEIPT
MUST HAVE OCCURRED PRIOR TO BID OPENING. ASTRO DEVELOPMENT
LABORATORIES, INC., B-181021, JULY 17, 1974, 74-2 CPD 36. THE CLAUSE
PROVIDES IN PARAGRAPH C(II) AND WE HAVE CONSISTENTLY HELD THAT THE ONLY
ACCEPTABLE EVIDENCE OF RECEIPT AT THE GOVERNMENT INSTALLATION IS THE
TIME/DATE STAMP OF THE WRAPPER OR OTHER DOCUMENTARY EVIDENCE OF RECEIPT
MAINTAINED AT THE INSTALLATION. SEE E.G., B. E. WILSON CONTRACTING
CORP., ID; LAMBERT CONSTRUCTION COMPANY, B-181794, AUGUST 29, 1974,
74-2 CPD 131. "OTHER DOCUMENTARY EVIDENCE" MUST BE CONTEMPORANEOUS
EVIDENCE RATHER THAN AFTER THE FACT AFFIDAVITS. B. E. WILSON CONTRACING
CORP., ID.
THERE IS NO DOCUMENTARY EVIDENCE CONTEMPORANEOUS WITH THE BID OPENING
TO ESTABLISH THAT THE BID WAS FIRST RECEIVED AT THE INSTALLATION PRIOR
TO BID OPENING. THE EVIDENCE PRESENTED IN THIS CASE, (CONSISTING OF
AFTER THE FACT AFFIDAVITS AND INFERENCES DRAWN THEREFROM) WHILE
SUGGESTING THE SEQUENCE OF EVENTS, DOES NOT MEET THE STRICT EVIDENTIARY
REQUIREMENTS OF ASPR OR OUR OFFICE TO ESTABLISH TIMELY RECEIPT AT THE
INSTALLATION.
IN THE CIRCUMSTANCES, WE MUST CONCLUDE THAT THE BID WAS PROPERLY
REJECTED AND, THEREFORE, DENY THE PROTEST AND THE CLAIM FOR BID
PREPARATION COSTS.
PARENTHETICALLY, WE NOTE THAT THE PROTESTER CONTENDS THAT THE BID WAS
MAILED SIX DAYS PRIOR TO BID OPENING. THIS PROBLEM COULD HAVE BEEN
AVOIDED IF, IN THE CIRCUMSTANCES, THE PROTESTER HAD MAILED ITS BID BY
EITHER CERTIFIED OR REGISTERED MAIL. SEE ZB PRECISION PRODUCTS, INC.,
B-187985, MAY 6, 1977, 77-1 CPD 316.
B-189502, OCTOBER 21, 1977
HEADNOTES - UNAVAILABLE
WHERE IFB LEADING TO AWARD OF INDEFINITE DELIVERY TYPE CONTRACT ON
BASIS OF LOWEST AGGREGATE BID, REQUIRES INSERTION OF UNIT AND EXTENDED
PRICES FOR EACH LINE ITEM, BID WHICH IMPOSES RESTRICTION AGAINST PUBLIC
DISCLOSURE OF LINE ITEM PRICES IS PROPERLY REJECTED AS NONRESPONSIVE
SINCE CONDITION IS CONTRARY TO REQUIREMENT FOR PUBLIC OPENING AND
EXAMINATION OF BIDS.
WARNER LABORATORIES, INC.:
WARNER LABORATORIES, INC. (WARNER) HAS FILED THIS PROTEST AGAINST THE
DETERMINATION BY THE DEPARTMENT OF THE INTERIOR'S BUREAU OF MINES (BOM)
THAT ITS BID UNDER INVITATION FOR BIDS (IFB) NO. S0376026 WAS
NONRESPONSIVE AND INELIGIBLE FOR AWARD BECAUSE IT CONTAINED A PROVISION
PROHIBITING THE DISCLOSURE OUTSIDE THE GOVERNMENT OF THE UNIT AND
EXTENDED PRICES FOR 19 LINE ITEMS REQUIRED TO BE INSERTED IN THE
SCHEDULE ON PAGES 8(A) AND 9(A) OF THE IFB.
THE 19 LINE ITEMS EACH REPRESENTED SPECIFIC TESTS OR COMBINATION OF
TESTS FOR ANALYZING COAL SAMPLES. AWARD WAS TO BE MADE ON AN INDEFINITE
DELIVERY TYPE BASIS, WITH SPECIFIED MINIMUM AND MAXIMUM QUANTITIES OF
EACH LINE ITEM. FOR EVALUATION PURPOSES, AN ESTIMATED QUANTITY WAS
SPECIFIED FOR EACH LINE ITEM, WITH THE REQUIRED UNIT PRICES TO BE
EXTENDED BY THE ESTIMATED QUANTITY.
FOUR BIDS WERE RECEIVED. ALTHOUGH THE BID SCHEDULE DID NOT PROVIDE
FOR THE INSERTION OF TOTAL AGGREGATE PRICES, WARNER, THE SECOND LOW
BIDDER, AND BLACK ROCK TESTING LABORATORIES, INC., THE LOW BIDDER,
TOTALED THEIR EXTENDED PRICES AND PROVIDED A LINE FOR THAT AGGREGATE
FIGURES. THEREFORE, ONLY THAT FIGURE WAS READ BY THE BID OPENING
OFFICER. THE OTHER TWO BIDDERS DID NOT TOTAL THEIR BIDS, AND THEIR UNIT
PRICES WERE READ ALOUD AND THEN ADDED. BLACK ROCK'S LOW BID WAS
SUBSEQUENTLY REJECTED WHEN IT WAS CONCLUDED THAT THE FIRM LACKED THE
CAPABILITY TO PERFORM THIS PARTICULAR WORK.
WARNER PLACED AN ADMONITION ON THE COVER PAGE OF ITS BID STATING THAT
ITS OFFER CONTAINED "CONFIDENTIAL AND PRIVILEGED INFORMATION." JUST
PRIOR TO PAGES 8(A) AND 9(A) WARNER INSERTED ITS OWN ATTACHMENT TO THE
BID PACKAGE STIPULATING:
"THE DATA ON PAGES 8A AND 9A AND ATTACHMENTS ARE CONSIDERED
CONFIDENTIAL OR PRIVILEGED, AND NOT SUBJECT TO MANDATORY DISCLOSURE
UNDER THE FREEDOM OF INFORMATION ACT. THIS INFORMATION SHALL NOT BE
DISCLOSED OUTSIDE THE GOVERNMENT AND SHALL NOT BE DUPLICATED, USED, OR
DISCLOSED IN WHOLE OR IN PART FOR ANY PURPOSE OTHER THAN TO EVALUATE THE
PROPOSAL. IF A CONTRACT IS AWARDED TO THIS OFFEROR AS A RESULT OF OR IN
CONNECTION WITH THE SUBMISSION OF THIS DATA THE GOVERNMENT SHALL HAVE
THE RIGHT TO REVEAL THE AGGREGATE TOTAL DOLLAR VALUE OF THE CONTRACT
ONLY. USE OF DISCLOSURE OF DATA ON THIS PAGE IS SUBJECT TO THE
RESTRICTIONS OF THE TITLE PAGE."
IN ARGUING THAT ITS BID IS FULLY RESPONSIVE, WARNER POINTS TO ARTICLE
III AT PAGE 13 OF THE IFB, WHICH PROVIDES THAT BIDS MUST INCLUDE UNIT
PRICES FOR EACH ITEM "IN ORDER THAT BIDS MAY BE PROPERLY EVALUATED" AND
THAT "AWARD SHALL BE MADE TO THAT RESPONSIBLE BIDDER WHOSE TOTAL
AGGREGATE PRICE IS LOW." WARNER CONTENDS THAT SINCE UNIT PRICES ARE FOR
EVALUATION PURPOSES ONLY AND THE BASIS FOR AWARD IS THE LOW AGGREGATE
PRICE, ONLY THAT PRICE IS SUBJECT TO PUBLIC DISCLOSURE AND THEREFORE IT
COULD PROPERLY RESTRICT THE 19 PRICE COMPONENTS AS PROTECTED "TRADE
SECRETS AND COMMERCIAL OR FINANCIAL INFORMATION", WHICH ARE EXEMPT FROM
DISCLOSURE UNDER THE FREEDOM OF INFORMATION ACT (FOIA) (5 U.S.C.
552(B)(4)).
IN THIS REGARD, WARNER'S COUNSEL CITES RCI MICROFILM, B-182169, APRIL
10, 1975, 75-1 CPD 220, IN WHICH IT WAS HELD THAT WORKSHEETS AND OTHER
INFORMATION SUBMITTED BY THE LOW BIDDER IN SUPPORT OF AN ALLEGED MISTAKE
IN BID NEED NOT BE DISCLOSED TO COMPETING BIDDERS. WARNER'S COUNSEL
STATES THAT THE 19 COMPONENT UNIT PRICES "ARE VERY SIMILAR" TO THE
WORKSHEETS IN RCI MICROFILM. WARNER ALSO ALLUDES TO COMPUTER NETWORK
CORPORATION, 55 COMP.GEN. 445 (1975), 75-2 CPD 297, IN WHICH IT WAS
STATED THAT THE PURPOSE OF A PUBLIC BID OPENING IS TO PROTECT BOTH THE
PUBLIC INTEREST AND OTHER BIDDERS AGAINST ANY FORM OF FRAUD, FAVORITISM
OR PARTIALITY, AND ARGUES THAT THE RESTRICTION ON DISCLOSURE OF UNIT
PRICES COULD NOT GIVE RISE TO ANY SUCH CONSEQUENCES.
WE FIND NO MERIT TO WARNER'S CONTENTIONS. THE PUBLIC ADVERTISING
STATUTE, 41 U.S.C. 253(B) (1970), REQUIRES THAT: "ALL BIDS SHALL BE
PUBLICLY OPENED AT THE TIME AND PLACE STATED IN THE ADVERTISEMENT." IN
THIS REGARD, IMPLEMENTING FEDERAL PROCUREMENT REGULATIONS (FPR)
1-2.402(A) (1964 ED.) REQUIRES THAT BIDS BE PUBLICLY OPENED, READ ALOUD
WHEN PRACTICABLE, AND RECORDED. FPR 1-2.402(C) PROVIDES FOR THE
EXAMINATION OF BIDS BY INTERESTED PERSONS PROVIDING IT DOES NOT
INTERFERE UNDULY WITH THE CONDUCT OF GOVERNMENT BUSINESS. THE ONLY
PERMISSIBLE RESTRICTION UPON PUBLIC DISCLOSURE OF A BID IS LIMITED TO
DESCRIPTIVE LITERATURE ACCOMPANYING THE BID UPON WHICH THE BIDDER
IMPOSES A RESTRICTION (FPR 1-2.404-4), AND EVEN THEN SUCH LIMITED
RESTRICTION WILL RENDER THE BID NONRESPONSIVE IF IT PROHIBITS THE
DISCLOSURE OF SUFFICIENT INFORMATION TO PERMIT COMPETING BIDDERS TO KNOW
THE ESSENTIAL NATURE AND TYPE OF PRODUCTS OFFERED OR THOSE ELEMENTS OF
THE BID RELATING TO QUANTITY, PRICE AND DELIVERY TERMS. COMPUTER
NETWORK CORPORATION, SUPRA; 53 COMP.GEN. 24 (1973). IN SHORT "IT IS
THE ESSENCE OF FORMAL ADVERTISING THAT SEALED BIDS BE OPENED IN PUBLIC
WITH PUBLIC EXAMINATION PERMITTED." REDIFON COMPUTERS LIMITED -
RECONSIDERATION, B-186691, JUNE 30, 1977, 77-1 CPD 463.
WITH REGARD TO THE INSTANT SITUATION, FPR 1-2.403 STATES THAT EXCEPT
IN THE CASE OF A CLASSIFIED PROCUREMENT (WHICH IS NOT THE CASE HERE),
"NAMES OF BIDDERS, PRICES BID AND ANY OTHER INFORMATION REQUIRED FOR BID
EVALUATION, SHALL BE ENTERED IN AN ABSTRACT OR RECORD" UNLESS THE ITEMS
ARE TOO NUMEROUS TO WARRANT THE RECORDING OF ALL BIDS COMPLETELY. SUCH
ABSTRACT OR RECORD "SHALL BE AVAILABLE FOR PUBLIC INSPECTION."
OBVIOUSLY, THE LINE ITEM PRICES WERE EXPRESSLY REQUIRED FOR BID
EVALUATION. MOREOVER, ALTHOUGH AWARD IS TO BE MADE ON THE BASIS OF
TOTAL AGGREGATE PRICE, IT IS THE INDIVIDUAL LINE ITEM UNIT PRICES THAT
ARE THE MATERIAL, ESSENTIAL PRICING ELEMENTS OF THE RESULTING CONTRACT
IN VIEW OF THE INDEFINITE QUANTITY NATURE OF THAT CONTRACT. THUS, IT
CANNOT BE SAID THAT THE RESTRICTION IN WARNER'S BID DOES NOT PREVENT THE
DISCLOSURE OF PRICE, QUANTITY AND DELIVERY TERMS. CONSEQUENTLY, WE DO
NOT AGREE THAT THE FAILURE TO DISCLOSE WARNER'S UNIT PRICES WOULD NOT
RESULT IN APPARENT FAVORITISM OR PARTIALITY, AND WE DO NOT AGREE THAT
THERE IS ANYTHING "SIMILAR" BETWEEN WARNER'S UNIT PRICES, WHICH ARE AN
ESSENTIAL PART OF ITS BID, AND THE WORKSHEETS SUBMITTED IN RCI
MICROFILM, WHICH MERELY WERE DATA EXTRINSIC TO THE BID. AS WE SAID IN
THAT CASE:
" * * * A PUBLIC OPENING HAS BEEN INTERPRETED TO MEAN THAT THE BID
MUST PUBLICLY DISCLOSE TO ALL COMPETING BIDDERS THE ESSENTIAL NATURE AND
TYPE OF THE PRODUCTS OFFERED AND THOSE ELEMENTS OF THE BID WHICH RELATE
TO PRICE, QUANTITY, AND DELIVERY TERMS. 53 COMP.GEN. 24, 25 (1973).
IN OUR OPINION, HOWEVER, INFORMATION SUBMITTED BY A BIDDER AFTER BID
OPENING IN SUPPORT OF A BID CORRECTION CLAIM IS NOT A PART OF THE BID
ITSELF."
WE FIND THAT WARNER'S BID WAS PROPERLY REJECTED AS NONRESPONSIVE.
THE PROTEST IS DENIED.
B-189641, OCTOBER 21, 1977
HEADNOTES - UNAVAILABLE
PREMATURE OPENING OF PROTESTER'S BID FOR PURCHASE OF FEDERAL TIMBER,
WHILE IMPROPER AND UNFORTUNATE, DOES NOT WARRANT REJECTION OF ALL BIDS
AND READVERTISING, SINCE PROTESTER WAS AFFORDED OPPORTUNITY TO PROTEST
TO COMPTROLLER GENERAL, OR REVISE OR CONFIRM BID PRIOR TO OFFICIAL BID
OPENING, THREE HIGHER BIDS CONSIDERED AT FORMAL OPENING WERE NOT BASED
ON PROTESTER'S BID, AND READVERTISING WOULD GIVE PROTESTER OPPORTUNITY
TO COMPETE FOR AWARD TO PREJUDICE OF HIGH BIDDER IN LIGHT OF DISCLOSED
PRICES.
BOYD LUMBER CORPORATION:
BOYD LUMBER CORPORATION (BOYD) PROTESTS THE FAILURE OF THE FOREST
SERVICE, DEPARTMENT OF AGRICULTURE, TO REJECT ALL BIDS AND READVERTISE A
STRIKE TIMBER SALE AFTER BOYD'S SEALED BID WAS INADVERTENTLY OPENED BY
FOREST SERVICE EMPLOYEES PRIOR TO THE TIME SPECIFIED FOR BID OPENING--
JULY 13, 1977. ON JULY 11, 1977, A FOREST SERVICE MAILCLERK OPENED THE
SEALED BID ENVELOPE THAT HAD BEEN RECEIVED FROM BOYD ON THAT DATE. WHEN
IT WAS SUBSEQUENTLY DETERMINED THAT THE ENVELOPE CONTAINED A BID, A
MEMBER OF THE BUDGET AND FINANCE STAFF REPLACED THE BID PAPERS IN THE
ENVELOPE, RESEALED IT AND REPORTED THE ERROR TO THE TIMBER STAFF
OFFICER. THE THREE EMPLOYEES WHO HANDLED THE OPENED BID ENVELOPE SIGNED
STATEMENTS DENYING ANY KNOWLEDGE OF FIGURES IN THE BID.
ON JULY 12, 1977, THE TIMBER STAFF OFFICER NOTIFIED THE BOYD
COMPTROLLER BY TELEPHONE OF THE INADVERTENT OPENING. THE CIRCUMSTANCES
WERE FULLY EXPLAINED AND BOYD WAS OFFERED THREE ALTERNATIVES: PROTEST
ANY SUBSEQUENT SALE TO OUR OFFICE OR CONFORM OR REVISE THE BID. IF BOYD
CHOSE TO REVISE ITS BID A NEW BID OPENING DATE WOULD BE SET TO ALLOW A
REASONABLE TIME FOR PREPARATION OF THE REVISED BID. BECAUSE AN OFFICER
OF BOYD WITH AUTHORITY TO SELECT FROM AMONG THE AVAILABLE ALTERNATIVES
WAS APPARENTLY NOT AVAILABLE, THE FOREST SERVICE OFFERED TO DELAY THE
BID OPENING UNTIL THE PRESIDENT WAS AVAILABLE TO ACT. WHEN FINALLY
CONTACTED AT THE INITIATIVE OF THE FOREST SERVICE 1 HOUR PRIOR TO THE
SCHEDULED BID OPENING, THE PRESIDENT DECLINED TO SELECT FROM AMONG THE
OFFERED ALTERNATIVES AND ADVISED THE FOREST SERVICE TO PROCEED IN WHAT
IT FELT WAS A "RIGHT AND PROPER" MANNER.
ACCORDING TO THE FOREST SERVICE, BECAUSE OF THIS "NON-COMMITTAL"
RESPONSE, THE FOREST SERVICE INFORMED HIM IT WOULD USE THE ORIGINAL BID
AND WOULD OPEN THE BIDS AS SCHEDULED. THIS WAS ACCOMPLISHED AND AWARD
HAS BEEN WITHHELD PENDING OUR DECISION.
BOYD SUBSEQUENTLY PROTESTED THIS ACTION TO OUR OFFICE ON THE GROUND
THAT THE PREMATURE OPENING OF ITS BID VIOLATED SECTION 14(E) OF THE
NATIONAL FOREST MANAGEMENT ACT OF 1976, PUB. L. 94-588, 90 STAT. 2959
(OCTOBER 22, 1976), 16 U.S.C.A. 472A(E)(2), REQUIRING THE SALE OF
FEDERAL TIMBER BY SEALED BIDDING, AND ASSERTS THAT THE FOREST SERVICE
SHOULD THEREFORE REJECT ALL BIDS AND READVERTISE THE SALE. BOYD
COMPLAINS THAT THE FOREST SERVICE HAS NOT MET ITS BURDEN OF
DEMONSTRATING THAT NO HARM RESULTED FROM THE PREMATURE BID OPENING, THAT
MR. BOYD HAD SUFFICIENT TIME TO CHOOSE FROM AMONG THE OFFERED
ALTERNATIVES AND THAT THE ALTERNATIVES OFFERED WERE REASONABLE.
BY LETTER DATED AUGUST 24, 1977, THE FOREST SERVICE RECOMMENDED THAT,
"IN VIEW OF THE ALTERNATIVES OFFERED BOYD LUMBER COMPANY * * * PRIOR TO
THE SCHEDULED BID OPENING * * * THEIR BID PROTEST BE DENIED."
WHILE THE ACTION OF THE FOREST SERVICE EMPLOYEES IN OPENING AND
HANDLING THE BID PRIOR TO THE TIME SCHEDULED FOR OPENING WAS IMPROPER
AND UNFORTUNATE, UNDER THE REPORTED FACTS AND CIRCUMSTANCES, WE FIND NO
PROPER LEGAL BASIS FOR REQUIRING THE REJECTION OF ALL BIDS. IT APPEARS
THAT ONLY BOYD'S PRESIDENT HAD AUTHORITY TO SELECT ONE OF THE OFFERED
ALTERNATIVES AND THAT HE COULD NOT BE REACHED UNTIL 1 HOUR PRIOR TO THE
SCHEDULED BID OPENING. THE RECORD SHOWS, HOWEVER, THAT ON THE EVENING
OF JULY 12, THE BOYD COMPTROLLER HAD BRIEFED THE PRESIDENT ON THE
SITUATION AND HAD TOLD HIM OF THE ALTERNATIVES OFFERED BY THE FOREST
SERVICE. THUS, IT IS APPARENT THAT THE PRESIDENT HAD CONSIDERABLY MORE
THAN 1 HOUR TO DETERMINE A COURSE OF ACTION.
BOYD CITES OUR DECISION AT 34 COMP.GEN. 395 (1955) IN SUPPORT OF ITS
POSITION. IN THAT DECISION AND TWO OTHERS, B-161638, JUNE 21, 1967;
B-149878, NOVEMBER 20, 1962, WE SUPPORTED THE VARIOUS AGENCY FINDINGS
THAT THE PROTESTERS HAD SUFFERED NO HARM BY LOOKING TO THE FACTS AND
CIRCUMSTANCES SURROUNDING THE PREMATURE OPENINGS OF INDIVIDUAL OR
MULTIPLE BIDS. THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE ARE
ALMOST IDENTICAL TO THOSE CASES, ESPECIALLY B-149878, SUPRA, WHERE AN
OPPORTUNITY TO CONFIRM OR REVISE A PREMATURELY OPENED BID WAS GIVEN;
THEREFORE, FOR THE FOLLOWING REASONS, WE CONCLUDE THAT BOYD WAS NOT
PREJUDICED BY THE PREMATURE OPENING OF ITS BID.
THE OFFER TO PERMIT BID CONFIRMATION OR TO DELAY THE SCHEDULED BID
OPENING TO PERMIT REVISION OF BOYD'S BID OR TO PERMIT THE FIRM TO
PROTEST THE PREMATURE OPENING TO OUR OFFICE WOULD HAVE PERMITTED BOYD TO
OVERCOME ANY HARM IT MIGHT HAVE SUFFERED AS THE RESULT OF THE EARLY
OPENING. FURTHER, THERE IS NO EVIDENCE OF RECORD CONCERNING A LEAK OF
THE BOYD PRICE. OF PARTICULAR SIGNIFICANCE, IN VIEW OF THE $363,118
PRICE DIFFERENTIAL BETWEEN THE HIGHEST BID AND THE BID OF THE PROTESTER
AND BECAUSE THE NEXT HIGH BID IS MORE THAN $47,000 HIGHER THAN THAT
SUBMITTED BY BOYD, IT MAY BE REASONABLY CONCLUDED THAT THESE HIGHER BIDS
WERE NOT BASED ON THE FIGURE SUBMITTED BY THE PROTESTER BUT, RATHER,
WERE INDEPENDENTLY PREPARED. IT IS CLEAR THAT BOYD WOULD HAVE BEEN IN
THE SAME RELATIVE POSITION AS IT WOULD HAVE BEEN HAD THE ERROR IN THE
OPENING OF BIDS NOT OCCURRED. UNDER THESE CIRCUMSTANCES, THE REJECTION
OF ALL BIDS AND READVERTISING OF THE SALE WOULD PREJUDICE THE HIGHER
BIDDER BY ALLOWING BOYD ANOTHER OPPORTUNITY, BY REASON OF THE
GOVERNMENT'S FORTUITOUS ERROR, TO COMPETE FOR THE AWARD IN THE LIGHT OF
NOW DISCLOSED HIGHER PRICES. PROTECTION OF THE INTEGRITY OF THE
COMPETITIVE BIDDING SYSTEM DISCOURAGES, RATHER THAN FAVORS, SUCH A
RESULT. SEE ALL DECISIONS CITED ABOVE.
BOYD'S PROTEST IS DENIED.
B-190311, OCTOBER 21, 1977
HEADNOTES - UNAVAILABLE
FAILURE BY BIDDER TO ACKNOWLEDGE AMENDMENT INCREASING MINIMUM WAGE
RATES RENDERS BID NONRESPONSIVE, SINCE DE MINIMUM DOCTRINE IS
INAPPLICABLE AND FAILURE IS MATERIAL DEVIATION WHICH IS NOT SUBJECT TO
WAIVER, NOTWITHSTANDING FACT THAT BIDDER WOULD BE PAYING SAME OR HIGHER
WAGE RATES UNDER UNION LABOR AGREEMENT, BECAUSE ACCEPTANCE OF BID IN
FORM IT EXISTS AT TIME OF BID OPENING WOULD NOT RESULT IN CONTRACT
CONTAINING STATEMENT OF MINIMUM WAGE RATES TO BE PAID AS REQUIRED BY
DAVIS-BACON ACT.
ROTHWELL BROTHERS, INC.:
BY LETTER OF SEPTEMBER 27, 1977, THE CONTRACTING OFFICER AT THE
VETERANS ADMINISTRATION (VA) HOSPITAL, CINCINNATI, OHIO, REQUESTED OUR
VIEWS IN REGARD TO A PROTEST LODGED BY ROTHWELL BROTHERS, INC.
(ROTHWELL), AGAINST THE REJECTION OF ITS LOW BID AND THE PROPOSED AWARD
OF A CONTRACT TO THE NEXT LOW BIDDER FOR FURNISHING AND INSTALLING AN
AUTOMATIC TRANSFER SWITCH TO AN EXISTING EMERGENCY GENERATOR AT THE VA
NURSING HOME AT FORT THOMAS, KENTUCKY.
ROTHWELL'S BID WAS REJECTED FOR FAILURE TO ACKNOWLEDGE RECEIPT OF
AMENDMENT NO. 1. THE AMENDMENT INCORPORATED A NEW DAVIS-BACON WAGE
DETERMINATION WHICH APPEARED IN THE FEDERAL REGISTER AFTER THE
SOLICITATION WAS ISSUED. ROTHWELL'S BID PRICE WAS $8,382 WHILE THE BID
PRICE OF THE SECOND LOW BIDDER WAS $9,358, A DIFFERENCE OF $976. IN ITS
PROTEST TO THE VA, ROTHWELL ARGUES THAT ITS BID WAS VALID BECAUSE IT IS
A UNION CONTRACTOR AND ALWAYS PAYS PREVAILING WAGES AND HAD THE
CONTRACTING OFFICER CONTACTED IT, HE WOULD HAVE DISCOVERED THAT ITS BID
INCLUDED THE PREVAILING WAGE RATES.
THE CONTRACTING OFFICER STATES THAT THE LABOR ON THIS PROJECT IS
ALMOST EXCLUSIVELY ELECTRICIAN AND THE WAGE RATE FOR THAT TRADE WAS
INCREASED BY THE AMENDMENT BY $0.55 PER HOUR, WHICH IS MORE THAN 4
PERCENT ABOVE THE ELECTRICIANS WAGE RATE ORIGINALLY CONTAINED IN THE
SOLICITATION. THE CONTRACTING OFFICER FURTHER ADVISES THAT THE
AMENDMENT ADDED $170.50 TO THE COST OF THE PROJECT, WHICH IS 2 PERCENT
OF THE LOW BID PRICE AND OVER 17 PERCENT OF THE DIFFERENCE BETWEEN THE
LOW AND SECOND LOW BID PRICES. THE CONTRACTING OFFICER POINTS OUT THAT
BOTH OF THESE PERCENTAGES EXCEED THE CORRESPONDING 1 PERCENT AND 14.8
PERCENT DETERMINED NOT TO BE TRIVIAL IN OUR DECISION AFB CONTRACTORS,
INC., B-181801, DECEMBER 12, 1974, 74-2 CPD 329.
WE HAVE HELD THAT WHERE A BIDDER FAILS TO ACKNOWLEDGE AN AMENDMENT
INCREASING THE MINIMUM WAGE RATES, THE BID IS NONRESPONSIVE BECAUSE
ACCEPTANCE OF THE BID IN THE FORM IT EXISTS AT THE TIME OF BID OPENING
WOULD NOT RESULT IN A CONTRACT CONTAINING A STATEMENT OF THE MINIMUM
WAGE RATES TO BE PAID AS REQUIRED BY THE DAVIS-BACON ACT, 40 U.S.C. 276A
(1970). FURTHER, IT IS IMMATERIAL THAT THE BIDDER WOULD BE PAYING THE
SAME OR HIGHER WAGE RATES UNDER UNION LABOR AGREEMENTS. B-170064, JULY
21, 1970; B-169581, MAY 8, 1970.
FINALLY, THE QUESTION OF WHETHER THE FAILURE TO ACKNOWLEDGE THE
AMENDMENT MAY BE WAIVED AS A MINOR INFORMALITY DUE TO THE NEGLIGIBLE OR
TRIVIAL EFFECT IT WOULD HAVE ON THE CONTRACT PRICE IS NOT FOR
CONSIDERATION. WE HAVE HELD THAT THE DE MINIMUS DOCTRINE DOES NOT APPLY
TO A SITUATION WHERE A BIDDER FAILS TO ACKNOWLEDGE AN AMENDMENT
INCREASING MINIMUM WAGE RATES SINCE, AS MENTIONED ABOVE, THE CONTRACT AS
AWARDED WOULD NOT CONTAIN A COMMITMENT TO PAY THE MINIMUM WAGES REQUIRED
BY THE DAVIS-BACON ACT. UNITRANCO, B-187858, APRIL 28, 1977, 77-1 CPD
290; PRINCE CONSTRUCTION COMPANY, B-184192, NOVEMBER 5, 1975, 75-2 CPD
279; I-K ELECTRIC COMPANY, INC., B-184322, JULY 17, 1975, 75-2 CPD 47.
ACCORDINGLY, THE FAILURE TO ACKNOWLEDGE THE AMENDMENT IS A MATERIAL
DEVIATION WHICH IS NOT SUBJECT TO WAIVER AND RENDERS ROTHWELL'S BID
NONRESPONSIVE.
B-190358, OCTOBER 21, 1977
HEADNOTES - UNAVAILABLE
PROTEST AGAINST RESTRICTIVE SPECIFICATIONS AND AMBIGUOUS EVALUATION
CRITERIA FILED AFTER CLOSING DATE FOR RECEIPT OF INITIAL PROPOSALS IS
UNTIMELY UNDER 4 C.F.R. 20.2(B)(1) (1977) WHICH REQUIRES FILING OF
PROTESTS AGAINST ALLEGED IMPROPRIETIES APPARENT IN SOLICITATION BEFORE
CLOSING DATE FOR RECEIPT OF INITIAL PROPOSALS.
K-MCC, INC. CONSULTANTS:
K-MCC, INC. CONSULTANTS (K-MCC) HAS PROTESTED ANY AWARD UNDER REQUEST
FOR PROPOSALS (RFP) NO. 105-77-1032 ISSUED BY THE DEPARTMENT OF HEALTH,
EDUCATION, AND WELFARE.
K-MCC'S PROTEST IS BASED ON THE CONTENTIONS THAT THE SPECIFICATIONS
ARE RESTRICTIVE AND THAT THE EVALUATION CRITERIA ARE AMBIGUOUS AND OPEN
TO UNEQUAL APPLICATION.
SECTION 20.2(B)(1) OF OUR BID PROTEST PROCEDURES (4 C.F.R.PART 20
(1977)) STATES PROTEST BASED UPON ALLEGED SOLICITATION IMPROPRIETIES
APPARENT PRIOR TO THE CLOSING DATE FOR RECEIPT OF INITIAL PROPOSALS MUST
BE FILED PRIOR TO THE CLOSING DATE FOR RECEIPT OF INITIAL PROPOSALS.
THE CLOSING DATE FOR THE INSTANT RFP WAS AUGUST 22, 1977, AND THE
PROTEST BY K-MCC WAS NOT FILED WITH OUR OFFICE UNTIL A MONTH LATER.
SINCE THE ALLEGED DEFICIENCIES IN THE SOLICITATION WERE APPARENT PRIOR
TO THE CLOSING DATE, THE PROTEST IS UNTIMELY.
ACCORDINGLY, THE PROTEST WILL NOT BE CONSIDERED ON ITS MERITS.
B-190360, OCTOBER 21, 1977
HEADNOTES - UNAVAILABLE
SINCE NOTHING IN SMALL BUSINESS ACT OR PROCUREMENT REGULATIONS
MANDATES THAT ANY PARTICULAR PROCUREMENT BE SET ASIDE FOR SMALL BUSINESS
AND SINCE GAO WILL NOT REVIEW AGENCY'S DETERMINATION NOT TO MAKE "8(A)"
AWARD FOR GIVEN PROCUREMENT, CONTENTION THAT PARTICULAR PROCUREMENT
SHOULD HAVE BEEN MADE UNDER "8(A)" PROGRAM WILL NOT BE CONSIDERED.
MULTI-MAC SERVICE CORPORATION:
MULTI-MAC SERVICE CORPORTION (MULTI-MAC) PROTESTS THE AWARD OF A
CUSTODIAL/JANITORIAL SERVICES CONTRACT AT THE DEFENSE GENERAL SUPPLY
CENTER, RICHMOND, VIRGINIA, TO ANOTHER FIRM. MULTI-MAC WAS THE
INCUMBENT PURSUANT TO "8(A)" AWARD BUT WAS INFORMED THAT ANOTHER FIRM
WAS AWARDED A 90DAY PUBLIC EXIGENCY CONTRACT WITH WORK THEREUNDER
BEGINNING ON OCTOBER 11, 1977. MULTI-MAC CONTENDS THAT THE PURPOSE OF
THE "8(A)" PROGRAM IS TO ENABLE MINORITY CONTRACTORS TO SECURE
GOVERNMENT CONTRACTS WITHOUT COMPETITION AND THAT IT WAS WILLING TO
CONTINUE NEGOTIATIONS TO ARRIVE AT ANOTHER "8(A)" AWARD BUT THE
CONTRACTING OFFICER FAILED TO NEGOTIATE IN GOOD FAITH.
OUR DECISION IN TIDEWATER PROTECTIVE SERVICES, INC., 56 COMP.GEN.
115, (1976), 76-2 CPD 462, SUMMARIZES OUR POSITION CONCERNING PROTESTS
LIKE MULTI-MAC'S-- THAT A CERTAIN PROCUREMENT SHOULD BE A SMALL BUSINESS
SET-ASIDE OR AN "8(A)" CONTRACT-- AS FOLLOWS: (1) NOTHING IN THE SMALL
BUSINESS ACT OR PROCUREMENT REGULATIONS MAKES IT MANDATORY THAT THERE BE
A SET-ASIDE FOR SMALL BUSINESS AS TO ANY PARTICULAR PROCUREMENT; AND
(2) AN AGENCY'S DECISION NOT TO MAKE AN "8(A)" AWARD FOR A GIVEN
PROCUREMENT WILL NOT BE REVIEWED BY OUR OFFICE.
PROTEST DISMISSED.
B-181236, OCTOBER 20, 1977
HEADNOTES - UNAVAILABLE
1. LESSOR'S CLAIM FOR "INDEMNITY RENTAL" FOR DAMAGES RESULTING FROM
ARMY'S FAILURE TO REMOVE GOVERNMENT PROPERTY FROM PREMISES AND FAILING
TO RESTORE AND RETURN PREMISES TO LESSOR AT TERMINATION OF LEASE AS
REQUIRED BY LEASE PROVISIONS MAY NOT BE PAID WHERE DISTRICT COURT HAS
HELD THAT ARMY PROPERLY CONDEMNED LEASEHOLD INTEREST AT LEASE'S
TERMINATION, SINCE LESSOR HAS SUFFERED NO COMPENSABLE DAMAGE. COURT'S
DETERMINATION IS NOT UNCONSTITUTIONAL "EX POST FACTO LAW" OR "IMPAIRMENT
OF CONTRACT."
2. LESSOR'S CLAIM FOR INTEREST ON BREACH OF LEASE AGREEMENT CLAIM
BASED ON ARMY'S FAILURE TO VACATE LEASED PREMISES AT LEASE'S TERMINATION
AND RESTORATION OF PREMISES CLAIM BASED ON LEASE PROVISIONS CANNOT BE
PAID EVEN THOUGH INTEREST IS ALLOWED BY STATUTE IN SETTLEMENT OF
CONDEMNATION CLAIMS, SINCE PARTIES EXECUTED LEASE AGREEMENT CONTAINING
NO PROVISIONS FOR INTEREST.
3. LESSOR'S CLAIM THAT PROPERTY LEASED FOR GOVERNMENT'S USE
DIMINISHED IN MARKET VALUE DUE TO LESSOR'S INABILITY TO GAIN ACCESS TO
PREMISES TO REESTABLISH RANCH OPERATION AND EFFECT RESTORATION OF
PREMISES CANNOT BE PAID PURSUANT TO LEASE PROVISION REQUIRING GOVERNMENT
TO RESTORE PREMISES OR MAKE CASH PAYMENT IN LIEU THEREOF NOT TO EXCEED
DIMINUTION IN VALUE OF PREMISES CAUSED BY GOVERNMENT'S USE, SINCE LEASE
GAVE GOVERNMENT ALL RIGHTS AND PRIVILEGES AND RESERVED NO ACCESS RIGHTS
FOR LESSOR.
4. LESSOR'S CLAIM BASED ON ALLEGED DIMINUTION IN VALUE OF LEASED
PREMISES BY GOVERNMENT'S FAILURE TO RESTORE GRAZING PRIVILEGES ON
ACCOMPANYING FEDERAL LANDS GRANTED UNDER TAYLOR GRAZING ACT, 43 U.S.C.
315 ET SEQ., TO LESSOR HAS NO MERIT, SINCE GRANTING OF GRAZING
PRIVILEGES IS DISCRETIONARY WITH GOVERNMENT AND LESSOR HAD BEEN
COMPENSATED FOR REVOCATION OF PRIVILEGES AS PART OF 28 YEARS OF RENTAL
PAYMENTS IT RECEIVED.
5. LESSOR'S CLAIM FOR RESTORATION OF LAND BASED ON LEASE PROVISION
REQUIRING GOVERNMENT TO RESTORE PREMISES AT LEASE'S TERMINATION OR MAKE
CASE PAYMENT CANNOT BE PAID AT THIS TIME, SINCE GOVERNMENT STILL
PROPERLY OCCUPIES PREMISES UNDER CONDEMNED LEASEHOLD INTEREST SO LAND
COULD BE FURTHER DAMAGED OR RESTORED, AND INTENDS TO CONDEMN PREMISES IN
FEE SIMPLE SO THAT LAND RESTORATION DAMAGES WOULD PROBABLY DUPLICATE
"FAIR COMPENSATION" FOR ACQUISITION. HOWEVER, CLAIM FOR RESTORATION OF
TOTALLY DESTROYED IMPROVEMENTS CAN BE PAID, SINCE "UNIT RULE" OF
VALUATION NEED NOT BE APPLIED WHERE GOVERNMENT WILL NOT RESTORE
IMPROVEMENTS.
6. ARMY'S PROPOSED SETTLEMENT OF CLAIM FOR RESTORATION OF
IMPROVEMENTS ON PREMISES AS REQUIRED BY LEASE BASED ON IMPROVEMENTS'
REPRODUCTION COSTS AS OF LEASE'S TERMINATION DATE LESS DEPRECIATION TO
ACCOUNT FOR REASONABLE WEAR AND TEAR IN PROPER AND DOES NOT EXCEED
PREMISES' DIMINUTION IN VALUE CAUSE BY GOVERNMENT'S USE AND OCCUPANCY.
7. ALTHOUGH REVISED SCHEDULE OF IMPROVEMENTS INCORPORATED BY
SUPPLEMENTARY AGREEMENT TO LEASE OMITTED AND VARIED CONDITIONS AND
DESCRIPTION OF IMPROVEMENTS LISTED IN ORIGINAL SCHEDULE IN LEASE
EXECUTED 2 YEARS BEFORE, LESSOR IS BOUND TO HAVE CLAIM FOR RESTORATION
OF IMPROVEMENTS SETTLED BASED ON REVISED SCHEDULE WHICH SUPPLEMENTARY
AGREEMENT STATED SUPERSEDED ORIGINAL SCHEDULE. ALSO, LESSOR DID NOT
MEET BURDEN OF SHOWING REVISED SCHEDULE WAS NOT ACCURATE LIST OF
IMPROVEMENTS EXTANT AT LEASE'S BEGINNING OR THAT GOVERNMENT'S APPRAISAL
WAS ERRONEOUS.
8. IF LESSOR IS WILLING TO ACCEPT PROFFERED CASH SETTLEMENT OF
ARMY'S OBLIGATION TO RESTORE IMPROVEMENTS ON PREMISES AT END OF LEASE,
THEN PAYMENT SHOULD INCLUDE FULL AND COMPLETE RELEASE OF THAT CLAIM BY
LESSOR. IF LESSOR WILL NOT SETTLE NOW, SETTLEMENT MAY BE MADE WHEN
LAND, CURRENTLY OCCUPIED BY GOVERNMENT UNDER CONDEMNED LEASEHOLD, IS
CONDEMNED IN FEE SIMPLE AS EVENTUALLY PLANNED.
RITCH ASSOCIATES:
I. BACKGROUND
MR. WILLIAM G. RITCH HAS SUBMITTED A NUMBER OF CLAIMS ON BEHALF OF
RITCH ASSOCIATES (RITCH)-- AN UNINCORPORATED ASSOCIATION-- ARISING OUT
OF LEASE AND SUSPENSION AGREEMENT NO. DA-29-005-ENG-62, DATED OCTOBER
15, 1949. UNDER THE AGREEMENT, THE ARMY LEASED CERTAIN LANDS
ENCOMPASSED IN THE WHITE SANDS MISSILE RANGE, NEW MEXICO, FROM RITCH.
THE LEASED LANDS INCLUDED LAND OWNED IN FEE SIMPLE BY RITCH AND ITS
PREDECESSORS AS WELL AS STATE AND FEDERAL GRAZING LANDS USED BY RITCH.
THE ARMY FIRST OCCUPIED THE LAND IN QUESTION ON FEBRUARY 1, 1942, BY
CONDEMNATION. A LEASEHOLD AGREEMENT DATED OCTOBER 17, 1942, COVERING
THE PREMISES WAS EXECUTED AND RENEWED UNDER JUDICIAL AUSPICES TO JUNE
30, 1948. ON DECEMBER 17, 1949, THE PARTIES AGREED THAT RITCH WOULD BE
PAID $7,300 TO SATISFY THE GOVERNMENT'S OBLIGATION TO RESTORE DESTROYED
IMPROVEMENTS ON THE PREMISES AS OF JUNE 30, 1948.
THE ARMY CONTINUED POSSESSION PURSUANT TO COURT ORDER TO OCTOBER 15,
1949. ON THAT DATE, THE SUBJECT LEASE AGREEMENT COVERINGTRACT NO. 7 IN
THE WHITE SANDS MISSILE RANGE WAS EXECUTED BY THE ARMY AND THE
PREDECESSORS IN INTEREST OF RITCH. THE LEASE PROVIDED FOR A TERM
COMMENCING JULY 1, 1948, AUTOMATICALLY RENEWABLE YEARLY UNTIL THE
GOVERNMENT GAVE AN APPROPRIATE NOTICE OF TERMINATION, BUT IN NO EVENT
BEYOND JUNE 30, 1970. THE YEARLY RENTAL FOR TRACT NO. 7 (WHICH
INCLUDED FEDERAL GRAZING LANDS LEASED BY RITCH) WAS $8,930 TO JUNE 30,
1950, AND $6,230 FOR THE REMAINDER OF THE LEASE'S LIFE. ARTICLES 10 AND
11 OF THE LEASE AGREEMENT, IN PERTINENT PART, PROVIDE:
"10. * * * THE GOVERNMENT SHALL SURRENDER POSSESSION OF THE PREMISES
UPON EXPIRATION OR TERMINATION OF THIS AGREEMENT AND IF REQUIRED BY THE
GRANTOR SHALL, PRIOR TO EXPIRATION OR TERMINATION OF THIS AGREEMENT,
RESTORE THE PREMISES TO AS GOOD CONDITION AS THAT EXISTING AT THE TIME
OF ENTERING UPON THE SAME UNDER THIS AGREEMENT, REASONABLE AND ORDINARY
WEAR AND TEAR AND DAMAGES BY THE ELEMENTS OR BY CIRCUMSTANCES OVER WHICH
THE GOVERNMENT HAS NO CONTROL, EXCEPTED: PROVIDED THE GOVERNMENT SHALL
HAVE THE RIGHT AND PRIVILEGE OF MAKING A CASH SETTLEMENT WITH THE
GRANTOR IN LIEU OF PERFORMANCE OF ITS OBLIGATION, IF ANY, TO RESTORE THE
REAL ESTATE, PERSONAL PROPERTY (IF ANY BE DEMISED HEREIN), OR BOTH REAL
AND PERSONAL PROPERTY, WHICH SETTLEMENT SHALL IN NO EVENT EXCEED THE
AMOUNT OF ANY DIMINUTION IN VALUE OF THE PREMISES RESULTING FROM THE
GOVERNMENT'S USE AND OCCUPANCY; * * * . THE KIND, SIZE, CONSTRUCTION
AND CONDITION OF EACH ARTIFICIAL IMPROVEMENT IS SHOWN IN DETAIL ON
'SCHEDULE OF IMPROVEMENTS FOR LEASE AND SUSPENSION AGREEMENT,' ATTACHED
HERETO AND MADE A PART OF THIS AGREEMENT.
"11. PROVIDED THAT IN THE EVENT ANY GOVERNMENT PROPERTY IS LOCATED
ON THE DEMISED PREMISES AT THE TERMINATION DATE, THE RENTAL WILL
CONTINUE UNTIL SUCH PROPERTY IS REMOVED, RESTORATION COMPLETED AS
PROVIDED FOR IN ARTICLE 10 HEREON, OR A CASH SETTLEMENT AND POSSESSION
TENDERED TO THE GRANTOR."
A SCHEDULE OF THE IMPROVEMENTS ON THE PROPERTY EXECUTED BY RITCH'S
PREDECESSORS WAS ATTACHED TO THE AGREEMENT.
IN EARLY 1950, THE ARMY ACTED TO CONDEMN TRACT NO. B-121 IN THE WHITE
SANDS MISSILE RANGE. HOWEVER, ON JUNE 30, 1950, SUPPLEMENTAL AGREEMENT
NO. 1 TO THE LEASE AGREEMENT BROUGHT TRACT NO. B-121 UNDER THE LEASE AND
INCREASED THE ANNUAL RENTAL TO $6,747. A REVISED SCHEDULE OF
IMPROVEMENTS-- EXECUTED BY RITCH'S PREDECESSORS-- WAS ATTACHED TO THE
SUPPLEMENTAL AGREEMENT.
AFTER THE ARMY WAS UNSUCCESSFUL IN OBTAINING A VOLUNTARY EXTENSION OF
THIS AND OTHER LEASES IN THE WHITE SANDS MISSILE RANGE AREA BEYOND JUNE
30, 1970, THE ARMY FILED A DECLARATION OF TAKING IN THE UNITED STATES
DISTRICT COURT FOR THE DISTRICT OF NEW MEXICO (UNITED STATES V.
40,021.64 ACRES OF LAND, CIVIL ACTION NO. 8527) PURSUANT TO 10 U.S.C.
2663 (1970) AND 40 U.S.C. 257 AND 258A (1970). UNDER THE DECLARATION OF
TAKING, THE ARMY CONDEMNED A LEASEHOLD ESTATE BEGINNING JULY 1, 1970,
AND ENDING JUNE 30, 1971, EXTENDIBLE BY THE ARMY FOR YEARLY PERIODS
UNTIL JUNE 30, 1980. PURSUANT TO 40 U.S.C. 258A (1970), THE GOVERNMENT
DEPOSITS WITH THE COURT "JUST COMPENSATION" IN THE FORM OF A YEARLY
RENTAL PAYABLE TO RITCH.
CONGRESS HAS AUTHORIZED THE FEE SIMPLE ACQUISITION OF THE WHITE SANDS
MISSILE RANGE BY SECTION 104 OF PUBLIC LAW 91-511, 84 STAT. 1204, 1207
(OCTOBER 26, 1970). MANY OF THESE LANDS ARE NOW OWNED BY THE
OGVERNMENT, ALTHOUGH THE RITCH LANDS HAVE NOT YET BEEN ACQUIRED IN FEE
SIMPLE DUE TO THE UNAVAILABILITY OF FUNDS.
ON JUNE 3, 1971, THE NEW MEXICO DISTRICT COURT DENIED CHALLENGES TO
THE GOVERNMENT'S CONDEMNATION ACTION (INCLUDING CIVIL ACTION NO. 8527)
BY SOME WHITE SANDS MISSILE RANGE LANDHOLDERS. THE COURT ALSO
DETERMINED:
"ANY CLAIMS AGAINST THE UNITED STATES FOR BREACHES OF THE LEASE AND
SUSPENSION AGREEMENT, IF ANY, CANNOT BE RAISED IN THIS PROCEEDING."
RITCH HAS MADE SEVERAL CLAIMS BASED ON THE LEASE AGREEMENT. FIRST,
ON THE BASIS OF ARTICLES 10 AND 11 OF THE LEASE, RITCH CLAIMS "INDEMNITY
RENTAL" ACCRUED SINCE JUNE 30, 1970, AT THE RATE OF $6,747 PER YEAR,
SINCE THE GOVERNMENT DID NOT RESTORE THE PREMISES BY THAT DATE. SECOND,
RITCH CLAIMS $320,000 IN FULL SATISFACTION OF THE GOVERNMENT'S DUTY TO
RESTORE THE PREMISES UNDER ARTICLE 10 OF THE LEASE. THIRD, RITCH CLAIMS
6-PERCENT INTEREST PER ANNUM ON THE ABOVE CLAIMS FROM THE DATE OF THE
GOVERNMENT'S ALLEGED DELINQUENCIES.
THE ARMY HAS ASSERTED THAT RITCH'S "INDEMNITY RENTAL" AND INTEREST
CLAIMS ARE WITHOUT MERIT AND SHOULD BE DENIED. HOWEVER, THE ARMY
RECOMMENDS THAT THE "RESTORATION" CLAIM BE SETTLED IN THE AMOUNT OF
$53,113.50. THIS REPRESENTS AN ESTIMATED $80,205 FOR THE COST OF
REPRODUCTION OF THE IMPROVEMENTS LISTED ON THE SUPPLEMENTAL AGREEMENT'S
SCHEDULE OF IMPROVEMENTS LESS 30 PERCENT DEPRECIATION AND $3,030 IN
PREVIOUS RESTORATION PAYMENTS. THE ARMY STATES THAT IT IS LIABLE TO
MAKE RESTORATION PAYMENTS FOR DAMAGE TO THE IMPROVEMENTS ON THE LEASED
LAND BECAUSE THE GOVERNMENT'S USE AND OCCUPANCY DURING THE LEASE TERM
CAUSED THE IMPROVEMENTS TO BE TOTALLY DESTROYED OR DETERIORATED OR TO
HAVE BEEN DAMAGED BEYOND ECONOMICAL REPAIR. THE ARMY RECOMMENDS THAT
ANY CLAIMS BASED ON RESTORATION OF THE LAND ITSELF BE DENIED BECAUSE
THEY MAY DUPLICATE THE EVENTUAL FEE SIMPLE CONDEMNATION COMPENSATION.
THE ARMY STATES THAT THE VAST MAJORITY OF CLAIMS ARISING OUT OF THE
WHITE SANDS MISSILE RANGE LEASES HAVE ALREADY BEEN SETTLED ON THE
FOREGOING BASIS.
RITCH DECLINED AN ARMY SETTLEMENT OFFER ON THIS BASIS. CONSEQUENTLY,
THE ARMY REFERRED THIS MATTER TO OUR OFFICE FOR A DECISION. IN
ADDITION, RITCH AND THE DEPARTMENT OF JUSTICE HAVE SUBMITTED THEIR VIEWS
ON THE DISPOSITION OF THESE CLAIMS.
II. "INDEMNITY RENTAL"
RITCH STATES THAT THE GOVERNMENT BREACHED ARTICLES 10 AND 11 OF THE
LEASE AGREEMENT BY NOT REMOVING GOVERNMENT PROPERTY FROM THE PREMISES
AND BY FAILING TO RESTORE AND RETURN THE PREMISES TO RITCH BY JUNE 30,
1970. RITCH CLAIMS DAMAGES OF $6,747 PER YEAR FOR THIS ALLEGED BREACH
OF THE GOVERNMENT, WHICH RITCH ASSERTS WAS THE DESIGNATED DAMAGE RATE
SET FORTH IN ARTICLE 11.
THE JUNE 3, 1971, NEW MEXICO DISTRICT COURT DECISION DEALT WITH THE
ARGUMENT OF SOME WHITE SANDS MISSILE RANGE LANDOWNERS THAT THE
GOVERNMENT COULD NOT CONDEMN A LEASEHOLD ESTATE IN THE LANDS BECAUSE THE
LEASE AGREEMENTS HAD BEEN BREACHED BY THE GOVERNMENT IN THAT GOVERNMENT
PROPERTY HAD NOT BEEN REMOVED FROM THE PREMISES AND THE PREMISES
RETURNED TO THE LANDOWNERS BY THE JUNE 30, 1970, TERMINATION DATE AS
REQUIRED BY ARTICLES 10 AND 11 OF THE LEASE. THE COURT HELD:
"IT IS THE OPINION OF THE COURT THAT THE UNITED STATES HOLDS THE
RIGHTS IN THE LAND IN QUESTION BY VIRTUE OF THE CONDEMNATION PROCEEDINGS
AND NOT BY VIRTUE OF ANY LEASE AND SUSPENSION AGREEMENTS.
" * * * THE COURT HAS EXAMINED THE LEASES VERY CAREFULLY AND IS OF
THE OPINION THAT THE LEASE AND SUSPENSION AGREEMENTS EXPIRED ACCORDING
TO THEIR TERMS ON JUNE 30, 1970, AND THERE WAS NO HOLDING OVER AND THAT
THE GOVERNMENT HAD FULL RIGHT TO CONDEMN THE LAND IN QUESTION. EACH OF
THE CONDEMNATION ACTIONS WAS FILED ON OR BEFORE THE DATE WHEN THE LEASE
EXPIRED AND SO THERE WAS NO NOTICE OF HOLDING OVER NOR AGREEMENT,
EXPRESSED OR IMPLIED, THAT THE GOVERNMENT WAS HOLDING OVER. * * * "
RITCH HAS ALLEGED THAT THIS DETERMINATION BY THE NEW MEXICO DISTRICT
COURT CONSTITUTED AN "EX POST FACTO LAW OR ACTION" AND WAS "IMPAIRING
THE OBLIGATIONS OF A CONTRACT" IN VIOLATION OF THE CONSTITUTION. THIS
CONTENTION HAS NO MERIT. THE CONSTITUTIONAL "EX POST FACTO LAW"
PROHIBITION ONLY PERTAINS TO CRIMINAL STATUTES (NOT TO FEDERAL COURT
DECISIONS). SEE CALDER V. BULL, 3 U.S. 386 (1798); BEAZEL V. OHIO, 269
U.S. 167 (1925). ALSO, THE CONSTITUTIONAL PROHIBITION AGAINST LAWS
IMPAIRING CONTRACTUAL OBLIGATIONS IS RESTRICTED TO STATE ACTION AND IS
NOT DIRECTED AGAINST THE ACTION OF FEDERAL COURTS. SEE NEW YORK V.
UNITED STATES, 257 U.S. 591 (1922). HOWEVER, THE CONSTITUTION EXPRESSLY
RECOGNI;ES THAT THE FEDERAL GOVERNMENT CAN TAKE LAND FOR PUBLIC USE
WITHOUT THE LANDOWNER'S AUTHORIZATION SO LONG AS "JUST COMPENSATION" IS
PAID. SEE BERMAN V. PARKER, 348 U.S. 26 (1954).
BESIDES RITCH'S LAND, THE NEW MEXICO DISTRICT COURT DECISION ALSO
APPLIED TO THE LANDS LEASED BY THE PLAINTIFF IN D.I.Z. LIVESTOCK CO. ET
AL. V. UNITED STATES, 210 CT.CL. 708 (1976), CERT. DENIED, 429 U.S. 1023
(1976). IN D.I.Z. LIVESTOCK CO., THE PLAINTIFF-- A WHITE SANDS MISSILE
RANGE LESSOR-- ASSERTED A BREACH OF CONTRACT CLAIM FOR DAMAGES RESULTING
FROM THE GOVERNMENT'S CONTINUED USE AND POSSESSION OF THE LEASED
PREMISES BEYOND THE JUNE 30, 1970, TERMINATION DATE IN ALLEGED VIOLATION
OF ARTICLES 10 AND 11 OF THE LEASE. THE COURT OF CLAIMS RULED ON THIS
CLAIM AS FOLLOWS:
"THE CRUX OF PLAINTIFFS' 'LEASE AND SUSPENSION' AGREEMENT CLAIMS IS
THAT DEFENDANT WAS INALTERABLY OBLIGATED UNDER SECTION 10 TO RESTORE
PLAINTIFFS TO THEIR LANDS UPON TERMINATION OF THE AGREEMENTS. DEFENDANT
DID NOT RESTORE PLAINTIFFS, BUT INSTEAD CONDEMNED ADDITIONAL PROPERTY
RIGHTS. PLAINTIFFS NOW SEEK DAMAGES EITHER FOR BREACH OF SECTION 10 OR
IN LIEU OF SPECIFIC PERFORMANCE OF THE SAME SECTION.
"IT IS QUITE APPARENT THAT DEFENDANT'S FAILURE TO RETURN PLAINTIFFS'
PROPERTY CONSTITUTES A TECHNICAL BREACH OF SECTION 10 OF THE 'LEASE AND
SUSPENSION' AGREEMENTS. HOWEVER, THERE IS NO APPROPRIATE REMEDY FOR
SUCH A TECHNICAL BREACH BECAUSE PLAINTIFFS HAVE SUFFERED NO DAMAGES.
SEE, E.G., MICRECORD CORP. V. UNITED STATES, 176 CT.CL. 46, 361 F.2D
1000 (1966). AT THE INSTANT IT WAS OBLIGATED TO RESTORE PLAINTIFFS,
DEFENDANT PROPERLY CONDEMNED AN ADDITIONAL TEN-YEAR INTEREST IN
PLAINTIFFS' LANDS. WE CANNOT SAY THAT PLAINTIFFS HAVE BEEN HARMED BY
THE GOVERNMENT'S FAILURE TO RESTORE PLAINTIFFS FOR THE FEW SECONDS IT
WOULD TAKE TO SATISFY THE 'LEASE AND SUSPENSION' AGREEMENT PROVISIONS.
TO HOLD OTHERWISE WOULD COMPEL DEFENDANT TO MAKE A USELESS GESTURE.
"IN SHORT, WHILE DEFENDANT IS PERHAPS GUILTY OF A TECHNICAL BREACH OF
THE 'LEASE AND SUSPENSION' AGREEMENTS, PLAINTIFFS HAVE SUFFERED NO
COMPENSABLE LOSS FROM THIS BREACH. THEREFORE, PLAINTIFFS' CONTRACT
CLAIMS CANNOT STAND." (FOOTNOTE OMITTED.)
WE BELIEVE THE COURT OF CLAIMS REASONING IS EQUALLY APPLICABLE TO
RITCH'S "INDEMNITY RENTAL" CLAIM. RITCH HAS SUFFERED NO COMPENSABLE
DAMAGE BECAUSE THE USE AND OCCUPANCY BY THE ARMY OF THE LEASED LANDS
BEYOND JUNE 30, 1970, WAS LEGAL AND PROPER. THEREFORE, RITCH'S
"INDEMNITY RENTAL" CLAIM IS DENIED. IN THIS REGARD, WE NOTE THAT RITCH
ALREADY RECEIVES A YEARLY RENTAL OF $7,200 FOR THE CONDEMNED LEASEHOLD
ESTATE IN THIS LAND.
III. INTEREST
RITCH CLAIMS 6-PERCENT INTEREST PER ANNUM ON THE "INDEMNITY RENTAL"
AND "RESTORATION" PAYMENT CLAIMS ACCRUED FROM JUNE 30, 1970, WHEN THE
CLAIMS ALLEGEDLY BECAME DUE. HOWEVER, INTEREST CANNOT BE RECOVERED
AGAINST THE UNITED STATES UPON UNPAID ACCOUNTS OR CLAIMS IN THE ABSENCE
OF AN EXPRESS PROVISION IN A RELEVANT STATUTE OR CONTRACT. UNITED
STATES V. GOLTRA, 312 U.S. 203, 207 (1941); UNITED STATES V.
THAYER-WEST POINT HOTEL CO., 329 U.S. 585, 588 (1947). THERE IS NO
PROVISION IN THE RITCH LEASE AGREEMENT PROVIDING FOR PAYMENT OF
INTEREST. RITCH ASSERTS THAT THE GOVERNMENT SHOULD PAY INTEREST BECAUSE
THE OCCUPATION AND USE OF THE LAND WAS PURSUANT TO THE CONDEMNATION
AUTHORITY. PAYMENT OF INTEREST IS EXPRESSLY ALLOWED IN THE SETTLEMENT
OF CONDEMNATION CLAIMS. SEE 40 U.S.C. 258A (1970); SEABOARD AIR LINE
RY. V. UNITED STATES, 261 U.S. 299, 306 (1923). HOWEVER, THE SUBJECT
LEASE AGREEMENT WAS A VOLUNTARY AGREEMENT BETWEEN RITCH AND THE ARMY
RATHERTHAN A CONDEMNATION. CONSEQUENTLY, ALTHOUGH THE GOVERNMENT MAY
WELL HAVE CONDEMNED THE LAND IF RITCH HAD NOT AGREED TO THE LEASE,
PAYMENT OF INTEREST ON CLAIMS ARISING UNDER THE LEASE WOULD BE
UNAUTHORIZED. SEE ALBRECHT V. UNITED STATES, 329 U.S. 599 (1947);
UNITED STATES V. THAYER-WEST POINT HOTEL CO., SUPRA.
IV. RESTORATION DAMAGES
RITCH CLAIMS $320,000 IN RESTORATION DAMAGES PURSUANT TO ARTICLE 10
OF THE LEASE. UNDER THIS ARTICLE, THE GOVERNMENT IS OBLIGATED AT THE
TERMINATION OF THE LEASE TERM TO RESTORE THE PREMISES TO AS GOOD A
CONDITION AS THAT EXISTING AT THE TIME OF THE LEASE'S EXECUTION,
REASONABLE WEAR AND TEAR AND CIRCUMSTANCES BEYOND THE GOVERNMENT'S
CONTROL EXCEPTED. IN THE ALTERNATIVE, THE GOVERNMENT CAN MAKE A CASH
PAYMENT IN LIEU OF RESTORATION SO LONG AS THE PAYMENT DOES NOT EXCEED
THE DIMINUTION IN VALUE OF THE PREMISES RESULTING FROM THE GOVERNMENT'S
USE AND OCCUPANCY. RITCH BREAKS DOWN THE RESTORATION CLAIM AS FOLLOWS:
RELATED DAMAGES TO THE REAL ESTATE . . . . . .$150,000
PHYSICAL DAMAGE TO THE REAL ESTATE . . . . . . 30,000
DAMAGES TO IMPROVEMENTS. . . . . . . . . . . . 140,000
A. RELATED DAMAGES TO THE REAL ESTATE
THE "RELATED DAMAGES TO THE REAL ESTATE" ARE SAID TO BE (1) RITCH'S
RESTRICTED ACCESS TO THE PREMISES; (2) RITCH'S RESTRICTED OPPORTUNITY
TO EFFECT RESTORATION OF THE PREMISES; (3) RITCH'S RESTRICTED
OPPORTUNITY TO REINSTATE GRAZING PRIVILEGES IT HAD RECEIVED FROM THE
FEDERAL GOVERNMENT UNDER THE TAYLOR GRAZING ACT, 43 U.S.C. 315 ET SEQ.
(1970); AND (4) RITCH'S RESTRICTED OPPORTUNITY TO REESTABLISH RANCH
OPERATIONS. RITCH STATED THAT THESE RESTRICTIONS RESULTED IN THE
DIMINUTION IN VALUE OF THE PREMISES, AS OF JUNE 30, 1970, IN TOTAL
MARKET VALUE "ON THE OPEN MARKET OR LENDING AGENCIES" OF $150,000.
ALTHOUGH RITCH HAS NOT MADE CLEAR THE BASIS FOR THE "RELATED DAMAGES"
CLAIM, IT WOULD APPEAR THAT RITCH IS CLAIMING THAT THE PROPERTY HAS
DIMINISHED IN MARKET VALUE BECAUSE RITCH HAS BEEN UNABLE TO RESTORE THE
PROPERTY AND REESTABLISH THE PREEXISTENT RANCH OPERATIONS INASMUCH AS
ACCESS TO THE PROPERTY DURING THE LEASE TERM WAS RESTRICTED. HOWEVER,
THE LEASE AGREEMENT EXECUTED BY RITCH GAVE THE GOVERNMENT ALL RIGHTS AND
PRIVILEGES RITCH POSSESSED IN THE PROPERTY FOR THE GOVERNMENT'S FULL AND
UNRESTRICTED USE. NO "ACCESS" RIGHTS WERE RESERVED TO THE LESSOR.
ARTICLE 10 ONLY REQUIRES RESTORATION OF THE PREMISES AND DOES NOT
PROVIDE FOR PAYMENTS TO COVER ALLEGED DIMINUTION IN MARKET VALUE OF THE
PREMISES RESULTING FROM THE LESSOR'S INABILITY TO GAIN ACCESS TO THE
MILITARY INSTALLATION TO MAINTAIN THE RANCH OPERATIONS IT OPERATED UP TO
1942. THE FACT THAT THE PREMISES MAY HAVE DIMINISHED IN VALUE DOES NOT,
IN AND OF ITSELF, CREATE A GOVERNMENT LIABILITY TO PAY AN AMOUNT EQUAL
TO THE DIMINUTION IN VALUE. RATHER THE "DIMINUTION IN VALUE OF THE
PREMISES RESULTING FROM THE GOVERNMENT'S USE AND OCCUPANCY" PROVISION IS
MERELY THE LIMIT ON THE AMOUNT OF ANY GOVERNMENT RESTORATION PAYMENTS.
IF RITCH IS CLAIMING THAT THE "RELATED DAMAGES" RESULTED FROM THE
GOVERNMENT'S FAILURE TO RETURN THE PREMISES AT THE END OF THE LEASE
TERM, THEN THE DISCUSSION OF THE "INDEMNITY RENTAL" CLAIM WOULD BE FOR
APPLICATION. RITCH HAS SUFFERED NO COMPENSABLE DAMAGE UNDER THIS THEORY
INASMUCH AS THE GOVERNMENT NOW PROPERLY OCCUPIES THE LAND UNDER THE
EMINENT DOMAIN AUTHORITY.
1. DAMAGES FROM FAILURE TO REINSTATE GRAZING PRIVILEGES
RITCH HAD CERTAIN GRAZING PRIVILEGES ON FEDERAL GOVERNMENT LANDS
GRANTED UNDER THE TAYLOR GRAZING ACT, 43 U.S.C. 315 ET SEQ. (1970),
WHICH WERE REVOKED WHEN THE GOVERNMENT TOOK POSSESSION OF THE PREMISES.
RITCH HAS APPLIED FOR REINSTATEMENT OF THESE RIGHTS. RITCH APPARENTLY
CLAIMS THAT THE VALUE OF THE REAL ESTATE HAS DIMINISHED BECAUSE ITS
GRAZING PRIVILEGES WERE NOT REINSTATED AS OF JUNE 30, 1970.
WHETHER TO GRANT GRAZING PRIVILEGES ON FEDERAL LANDS UNDER THE TAYLOR
GRAZING ACT IS DISCRETIONARY WITH THE FEDERAL GOVERNMENT. SEE 43 U.S.C.
315 (1970). SINCE THE LANDS HAVE BEEN CONDEMNED FOR MILITARY USE, IT IS
APPARENT THAT RITCH HAS SUFFERED NO COMPENSABLE DAMAGE FOR NOT BEING
PERMITTED TO REINSTATE THESE "PRIVILEGES." INDEED, ACTING WITHIN THE
DISCRETION VESTED BY 43 U.S.C. 315Q-R (1970), THE GOVERNMENT COMPENSATED
RITCH FOR REVOCATION OF THE TAYLOR GRAZING ACT PRIVILEGES AS PART OF THE
28 YEARS OF THE RENTAL PAYMENTS (1942-1970) IT RECEIVED. SEE B-168378,
JANUARY 28, 1970; PROTER V. RESOR, 415 F.2D 764 (10TH CIR. 1969);
D.I.Z. LIVESTOCK, SUPRA.
B. DAMAGE TO THE REAL ESTATE
RITCH'S DAMAGE CLAIM FOR RESTORATION OF THE LAND ITSELF (APART FROM
THE IMPROVEMENTS) CANNOT BE PAID AT THIS TIME SINCE THE GOVERNMENT IS
STILL LEGALLY OCCUPYING THE LAND UNDER A CONDEMNED LEASEHOLD. SEE
UNITED STATES V. GILA RIVER PIMA-MARICOPA INDIAN COMMUNITY, 391 F.2D 53
(9TH CIR. 1968), WHICH HELD THAT, SINCE THE GOVERNMENT CONDEMNED A
LEASEHOLD INTEREST IN THE LAND IT HAD PREVIOUSLY OCCUPIED UNDER A LEASE
AGREEMENT, THE LESSORS OF THE LAND COULD NOT RECOVER RESTORATION DAMAGES
UNDER THE LEASE UNTIL THE GOVERNMENT'S OCCUPANCY RIGHTS ENDED. ALSO SEE
UNITED STATES V. 14,4756 ACRES OF LAND, 71 F.SUPP. 1005 (D.C. DEL.
1947); UNITED STATES V. WESTINGHOUSE ELECTRIC & MANUFACTURING CO., 339
U.S. 261, 267-268 (1950; UNITED STATES V. 266.33 ACRES OF LAND, 96
F.SUPP. 647 (D.W.D. WASH. 1951); FLOOD V. UNITED STATES, 274 F.2D 483,
487 (9TH CIR. 1960), CERT. DENIED, 363 U.S. 805 (1960); UNITED STATES
V. 883.89 ACRES OF LAND, 442 F.2D 262, 265 (8TH CIR. 1971); 40
COMP.GEN. 300, 306-307 (1960), WHERE THIS SAME PRINCIPLE HAS BEEN
APPLIED. CONTRA, UNITED STATES V. 60,000 SQUARE FEET OF LAND, 53
F.SUPP. 767 (D.N.D. CALIF. 1943) (EXPRESSLY DISAPPROVED IN UNITED
STATES V. 14.4756 ACRES OF LAND, SUPRA). A CLAIM BASED ON RESTORATION
OF THE PREMISES WHERE THE GOVERNMENT CONTINUES TO LEGALLY OCCUPY THE
PREMISES IS SPECULATIVE AS TO AMOUNT. SEE UNITED STATES V. 14.4756
ACRES OF LAND, SUPRA. THIS IS SO BECAUSE THE GOVERNMENT CAN RESTORE OR
FURTHER DESTROY THE PREMISES SO LONG AS IT IS IN OCCUPATION AND IT MAY
WELL BE A "VAIN AND USELESS" EXERCISE TO SETTLE SUCH CLAIMS PRIOR TO THE
EXPIRATION OF THE GOVERNMENT'S OCCUPANCY. SEE 40 COMP.GEN. 300 (1960).
SINCE THE ARMY HAS BEEN EXPRESSLY AUTHORIZED TO CONDEMN THIS LAND IN FEE
SIMPLE, THERE EXISTS A PROBABILITY OF DUPLICATION OF PAYMENTS WHEN THE
LAND IS ACQUIRED INASMUCH AS ANY COST OF RESTORING THE DAMAGE TO THE
LAND CAUSED BY THE GOVERNMENT'S USE AND OCCUPANCY DIRECTLY RELATES TO
AND SEEMS INEXTRICABLY INTERTWINED WITH THE "FAIR COMPENSATION" VALUE OF
THE LAND ITSELF. IN THIS REGARD, WE UNDERSTAND THAT FEE SIMPLE
ACQUISITIONS OF OTHER TRACTS IN THE WHITE SANDS MISSILE RANGE WERE BASED
ON THE CURRENT VALUE OF THE LAND, WITHOUT IMPROVEMENTS, AS IF IT WAS IN
AN UNDAMAGED CONDITION.
C. DAMAGES TO IMPROVEMENTS
1. GENERALLY
ON THE OTHER HAND, SINCE THE IMPROVEMENTS HAVE BEEN TOTALLY DESTROYED
AND THE ARMY-- INTENDING TO CONDEMN A FEE SIMPLE INTEREST IN THE
PROPERTY-- HAS INDICATED THAT IT WILL NOT RESTORE THE PREMISES, WE
BELIEVE THE CLAIM, INSOFAR AS IT RELATES TO RESTORATION OF THE
IMPROVEMENTS ON THE PREMISES, CAN BE SETTLED AT THIS TIME AS RECOMMENDED
BY THE ARMY. UNDER SUCH CIRCUMSTANCES, THE CONSIDERATIONS WHICH MANDATE
DELAYING SETTLEMENT OF CLAIMS FOR DAMAGE TO THE LAND -TSELF DO NOT EXIST
WITH REGARD TO THE OBLIGATION TO RESTORE THE IMPROVEMENTS. ALTHOUGH THE
LAND WITH THE IMPROVEMENTS AND APPURTENANCES THEREON IS ORDINARILY
CONSIDERED A SINGLE UNIT FOR VALUATION PURPOSES, I.E., THE "UNIT RULE,"
DEPARTURES FROM THE "UNIT RULE" HAVE BEEN PERMITTED IN APPROPRIATE
CIRCUMSTANCES. SEE UNITED STATES V. CITY OF NEW YORK, 165 F.2D 526,
528-529 (2D CIR. 1948); UNITED STATES V. CORBIN, 423 F.2D 821, 828
(10TH CIR. 1970). AN APPROPRIATE CIRCUMSTANCE WHERE IMPROVEMENTS CAN BE
VALUED APART FROM THE REST OF THE PREMISES TO SETTLE A RESTORATION CLAIM
IS WHERE THE IMPROVEMENTS HAVE BEEN COMPLETELY LOST OR DESTROYED DURING
A TEMPORARY OCCUPATION BY THE FEDERAL GOVERNMENT. SEE EYHERABIDE V.
UNITED STATES, 345 F.2D 565 (CT. CL. 1965).
SINCE NO FURTHER DAMAGE CAN BE DONE TO THE IMPROVEMENTS NOR WILL THEY
BE RESTORED BY THE GOVERNMENT, IT WOULD NOT BE INAPPROPRIATE TO NOW
COMPENSATE RITCH FOR THE CONTRIBUTION IN VALUE THE IMPROVEMENTS ADDED TO
THE VALUE OF THE PREMISES. THE VAST MAJORITY OF THE WHITE SANDS MISSILE
RANGE LEASES WERE SETTLED ON THIS BASIS. MOREOVER, THE DEPARTMENT OF
JUSTICE HAS STATED THAT THE FEE SIMPLE CONDEMNATION PROCEEDINGS WOULD BE
SIMPLIFIED BY VALUING THE REAL ESTATE AS IT PHYSICIALLY EXISTS AT THE
TIME CONDEMNED IN FEE SIMPLE. WE UNDERSTAND THAT SETTLEMENTS OF THE FEE
SIMPLE CONDEMNATIONS OF MANY WHITE SANDS MISSILE RANGE TRACTS WERE BASED
ON THE CURRENT VALUE OF THE LAND AS IF IT WERE UNDAMAGED BUT WITHOUT THE
DESTROYED IMPROVEMENTS.
2. VALUE OF IMPROVEMENTS
RITCH TAKES ISSUE WITH THE ARMY'S VALUATION OF THE IMPROVEMENTS ON
THE PREMISES OF $80,205 IN REPRODUCTION COSTS, AS OF JUNE 30, 1970, LESS
30-PERCENT DEPRECIATION FOR $56,143.50. RITCH CLAIMS THAT THE
REPRODUCTION COSTS OF THE IMPROVEMENTS SHOULD HAVE BEEN VALUED AT
$140,000, AND THAT NO DEPRECIATION ALLOWANCE SHOULD HAVE BEEN
SUBTRACTED. RITCH AND THE ARMY PREPARED DIFFERING VALUE SCHEDULES TO
SUPPORT THEIR RESPECTIVE POSITIONS. THE ARMY'S VALUATION WAS BASED ON
THE JUNE 30, 1950, SUPPLEMENTAL AGREEMENT SCHEDULE OF IMPROVEMENTS. THE
SCHEDULE EITHER DOWNGRADED, VARIED DESCRIPTIONS OF OR EXCLUDED THE BULK
OF THE IMPROVEMENTS LISTED ON THE INITIAL OCTOBER 15, 1949, SCHEDULE OF
IMPROVEMENTS. RITCH'S VALUATION IS BASED ON THE INITIAL SCHEDULE, WHICH
IT STATES MORE ACCURATELY REFLECTS THE IMPROVEMENTS EXTANT ON THE
PREMISES ON JULY 1, 1948.
BOTH THE ARMY AND RITCH AGREE THAT THE CLAIM FOR RESTORATION OF THE
IMPROVEMENTS SHOULD BE BASED ON REPRODUCTION COSTS. THIS SEEMS TO BE A
LOGICAL BASIS TO SETTLE THIS CLAIM SO LONG AS THE SETTLEMENT DOES NOT
EXCEED THE DIMUNITION IN VALUE OF THE PREMISES RESULTING FROM THE
GOVERNMENT'S USE AND OCCUPANCY. HOWEVER, THE PARTIES AGREE ON LITTLE
ELSE CONCERNING THE AMOUNT PAYABLE FOR RESTORATION OF THE IMPROVEMENTS.
A. DEPRECIATION
ARTICLE 10 OF THE LEASE EXPRESSLY EXEMPTS THE GOVERNMENT FROM
LIABILITY FOR "REASONABLE AND ORDINARY WEAR AND TEAR AND DAMAGES BY THE
ELEMENTS." THEREFORE, TO ACCOUNT FOR THE ORDINARY WEAR AND TEAR OF
APPROXIMATELY 20 YEARS, IT WOULD BE NECESSARY TO DEPRECIATE THE
IMPROVEMENTS' REPLACEMENT VALUE WHERE THIS VALUE WAS DETERMINED AS OF
THE TERMINATION DATE OF THE LEASE AS HERE SO THAT THE SETTLEMENT AMOUNT
REFLECTS ONLY THE DAMAGE DONE BY THE GOVERNMENT TO THE IMPROVEMENTS.
CF. UNITED STATES V. CORBIN, SUPRA.
THE STRAIGHT LINE DEPRECIATION RATE OF 1-1/2 PERCENT PER ANNUM FOR 20
YEARS EMPLOYED BY THE ARMY HAS BEEN EXPLAINED AS FOLLOWS:
"THE NATURE OF THE IMPROVEMENTS VARIED GREATLY. SOME WERE LARGE WELL
CONSTRUCTED BUILDINGS, WELLS, PIPELINES, CONCRETE STRUCTURES, ETC.,
WHICH WOULD LIKELY HAVE LONG USEFUL LIVES WITH LITTLE MAINTENANCE.
OTHERS WERE SMALLER, LESS WELL CONSTRUCTED BUILDINGS, CORRALS, FENCES,
ETC., WHICH WOULD HAVE SHORT LIVES AND PROBABLY BE SUBSTANTIALLY
REPLACED IN 20 TO 25 YEARS. GENERALLY ACCEPTED RANGES OF DEPRECIATION
FOR FARM AND RANCH IMPROVEMENTS ARE 1% TO 5%. SINCE THE GREATER
PROPORTION OF THE VALUE ATTRIBUTED TO IMPROVEMENTS FOR EACH RANCH WAS
BASED ON PERMANENT TYPE IMPROVEMENTS 1-1/2% DEPRECIATION WAS CONSIDERED
A FAIR REPRESENTATIVE AVERAGE FIGURE. * * * "
BASED ON THE RECORD, WE CANNOT DISAGREE WITH THIS DEPRECIATION
METHOD.
B. DISCREPANCIES IN SCHEDULES OF IMPROVEMENTS.
AS RITCH HAS POINTED OUT, THERE ARE DISCREPANCIES BETWEEN THE
ORIGINAL LEASE'S SCHEDULE OF IMPROVEMENTS AND THE SUPPLEMENTAL
AGREEMENT'S SCHEDULE. RITCH HAS STATED THAT ONLY THE "HEMBRILLO SPRING"
ON TRACT B-121 SHOULD HAVE BEEN ADDED TO THE ORIGINAL SCHEDULE OF
IMPROVEMENTS BY THE SUPPLEMENTAL AGREEMENT SINCE THAT WAS THE ONLY
IMPROVEMENT ON TRACT B-121. RITCH STATES THAT THE ONLY PURPOSE OF THE
AGREEMENT WAS TO BRING TRACT B-121 UNDER THE LEASE AND THAT OTHER
CHANGES OR OMISSIONS IN THE DESCRIPTIONS OR CONDITIONS OF THE
IMPROVEMENTS SHOULD BE DISREGARDED IN FAVOR OF THE ORIGINAL LEASE'S
SCHEDULE-- WHICH RITCH STATES ACCURATELY DESCRIBES THE JULY 1, 1948,
IMPROVEMENTS ON THE PREMISES.
ONE NOTABLE DISCREPANCY BETWEEN THE SCHEDULES IS THAT MANY
IMPROVEMENTS ON THE REVISED SCHEDULE ARE DESIGNATED AS BEING IN WORSE
CONDITION THAN DESIGNATED ON THE ORIGINAL SCHEDULE. (FOR EXAMPLE, AN
IMPROVEMENT DESIGNATED AS BEING IN "GOOD" CONDITION IN THE ORIGINAL
SCHEDULE MAY HAVE BEEN REDESIGNATED AS BEING IN "POOR" CONDITION IN THE
REVISED SCHEDULE.) HOWEVER, THE CONDITION DIFFERENCES ARE NOT
SIGNIFICANT IN VIEW OF THE ARMY'S PROPOSED SETTLEMENT BASIS. IN
DETERMINING THE REPRODUCTION COST OF THE IMPROVEMENTS AS OF THE LEASE
TERMINATION DATE, THE DESIGNATED CONDITION WAS TOTALLY DISREGARDED.
(FOR EXAMPLE, THE ARMY'S SETTLEMENT IS NOT BASED ON THE JUNE 30, 1970,
CONSTRUCTION PRICE OF AN ADOBE HOUSE IN "POOR" CONDITION; RATHER THE
SETTLEMENT IS BASED ON THE JUNE 30, 1970, CONSTRUCTION COST OF A "NEW"
ADOBE HOUSE AS DESCRIBED IN THE REVISED SCHEDULE LESS 30-PERCENT
DEPRECIATION.)
ALSO, THE DESCRIPTIONS OF THE IMPROVEMENTS IN THE REVISED SCHEDULE
VARY SOMEWHAT FROM THE ORIGINAL SCHEDULE'S DESCRIPTIONS. FOR THE MOST
PART, IT APPEARS THAT THE DESCRIPTION OF THE IMPROVEMENTS IS MORE
COMPLETE IN THE REVISED SCHEDULE THAN IT IS IN THE ORIGINAL SCHEDULE.
MOREOVER, FOR THE BULK OF THE IMPROVEMENTS, WITH SEVERAL NOTABLE
EXCEPTIONS (DISCUSSED BELOW), WE CANNOT SAY THAT THE ARMY WOULD HAVE
VALUED THE PARTICULAR IMPROVEMENTS ANY HIGHER IF ITS APPRAISAL HAD BEEN
BASED ON THE ORIGINAL SCHEDULE RATHER THAN THE REVISED SCHEDULE,
NOTWITHSTANDING THAT THE VALUES GIVEN THESE IMPROVEMENTS BY RITCH WERE
HIGHER FOR THE MOST PART THAN THE ARMY'S APPRAISAL.
THE MOST NOTABLE DIFFERENCES BETWEEN THE ORIGINAL AND REVISED
SCHEDULES ARE:
(1) FOUR PUMP ASSEMBLIES (TWO AT THE MOORE WELL AND TWO AT THE
HEADQUARTERS WELL) WERE APPARENTLY ADDED TO THE FIRST SCHEDULE IN
HANDWRITING BY RITCH'S PREDECESSORS. THESE ASSEMBLIES ARE NOT
SEPARATELY LISTED IN THE REVISED SCHEDULE AND ARE VALUED BY RITCH AT
$816.25.
(2) THE HORSE CAMP SPRING IS DESCRIBED IN THE ORIGINAL SCHEDULE AS
HAVING A WATERING TROUGH AND GALVANIZED PIPE, WHILE THE REVISED SCHEDULE
EXPRESSLY STATES THATNO TROUGH OR PIPE EXISTS AT THIS SPRING. RITCH'S
VALUATION OF THE SPRING (INCLUDING TROUGH AND PIPE) IS $800 WHILE THE
GOVERNMENT'S APPRAISAL IS $600.
(3) THE PRIVATELY OWNED TELEPHONE LINE IS DESCRIBED AS BEING 33 MILES
LONG IN THE ORIGINAL SCHEDULE AND ONLY 8.75 MILES LONG IN THE REVISED
SCHEDULE. RITCH'S APPRAISAL OF THE 33-MILE LINE IS $35,112 WHILE THE
ARMY'S APPRAISAL OF THE 8.75-MILE LINE IS $9,310.
(4) IN THE ORIGINAL SCHEDULE, 22 MILES OF FOUR-STRAND BARBED WIRE
FENSE AND 24 MILES OF THREE-STRAND FENCE ARE LISTED. IN THE REVISED
SCHEDULE, 10 MILES OF FOUR-STRAND FENCE AND 24 MILES OF THREE-STRAND
FENCE ARE LISTED. RITCH'S APPRAISAL OF THE FENCE IS $53,576 WHILE THE
ARMY'S APPRAISAL IS $39,600.
WITH REGARD TO THE PUMP ASSEMBLIES AND WATERING TROUGH AND PIPE, THE
ARMY TOLD RITCH ON APRIL 27, 1970, THAT THOSE PARTICULAR IMPROVEMENTS
"WILL CERTAINLY BE INSPECTED AND FORM A PART OF YOUR AGREEMENT WITH THE
GOVERNMENT INSOFAR AS RESTORATION IS CONCERNED. SINCE THESE ITEMS WERE
A PART OF THE ORIGINAL LEASE AGREEMENT, THEY WILL BE CARRIED FORWARD TO
THE SUPPLEMENTAL AGREEMENT AND YOUR INTEREST THUS PROTECTED." THE ARMY
APPARENTLY RETREATED FROM THIS POSITION WHEN IT MADE ITS APPRAISAL OF
THE IMPROVEMENTS. THE ARMY HAS SUBSEQUENTLY INDICATED THAT IT BELIEVES
THAT THE PUMP ASSEMPLIES WERE ACTUALLY INCLUDED IN THE REVISED SCHEDULE
DESCRIPTIONS OF THE MOORE WELL AND THE HEADQUARTERS WELL. THE ARMY
ASSERTS THAT THE "TWO" WELL LISTINGS FOR EACH SITE "ARE DUPLICATORY OR
SUPPLEMENTAL TO EACH OTHER," SINCE ONLY ONE WORKING WELL AT EACH SITE
EXISTED. THEREFORE, ONLY THE ONE PUMP ASSEMPLY PRESENT AT EACH WELL, AS
DESCRIBED IN THE REVISED SCHEDULE, WAS INCLUDED AS PART OF THAT WELL'S
APPRAISAL. MOREOVER, RITCH'S PREDECESSORS ADDED THE ASSEMBLIES IN
HANDWRITING TO THE ORIGINAL SCHEDULE AND THERE IS NO INDICATION THAT
THESE ADDITIONS WERE RATIFIED BY THE ARMY AT THAT TIME.
BY LETTER DATED MAY 22, 1970, THE ARMY EXPLAINED TO RITCH THE REASONS
FOR THE DIFFERENCES BETWEEN THE SCHEDULES AND WHY THE REVISED SCHEDULE
WAS CONTROLLING. IN THIS LETTER, THE ARMY STATED THAT AFTER THE
EXECUTION OF THE OCTOBER 15, 1949, LEASE AGREEMENT WITH THE ORIGINAL
SCHEDULE ATTACHED, THE GOVERNMENT'S RESTORATION OBLIGATIONS UNDER THE
PRIOR LEASE AGREEMENT WHICH HAD TERMINATED ON JUNE 30, 1948, WERE
SETTLED FOR $7,300 ON DECEMBER 17, 1949. BECAUSE OF THIS PAYMENT, THE
ARMY EXPLAINS THAT A NEW SCHEDULE OF IMPROVEMENTS WAS PREPARED AS AN
ATTACHMENT TO THE JUNE 30, 1950, SUPPLEMENTAL AGREEMENT TO REFLECT THE
TRUE CONDITION OF THE IMPROVEMENTS AS OF JULY 1, 1948.
FROM OUR REVIEW, NOTWITHSTANDING THE ARMY'S PROTESTATIONS, IT DOES
NOT APPEAR UNLIKELY THAT THE REVISED SCHEDULE REFLECTS THE IMPROVEMENTS
ON THE LEASED PREMISES AS OF JUNE 30, 1950, RATHER THAN JUNE 30, 1948.
NEVERTHELESS, IN VIEW OF THE CONFLICTING RECORD AND PASSAGE OF TIME, WE
CAN ONLY SPECULATE REGARDING WHAT IMPROVEMENTS REALLY EXISTED ON THE
PREMISES ON JULY 1, 1948, AND CAN OFFER NO EXPLANATION REGARDING THE
DIFFERENCES BETWEEN THE TWO SCHEDULES. THE BURDEN IS ON THE CLAIMANT TO
ESTABLISH ITS CLAIM. 31 COMP.GEN. 340 (1952); GENE PETERS, 56
COMP.GEN. 459 (1977), 77-1 CPD 225. RITCH HAS NOT ESTABLISHED THAT THE
ORIGINAL SCHEDULE MORE ACCURATELY REFLECTED THE IMPROVEMENTS ON THE
PREMISES AS OF JULY 1, 1948.
IN ANY CASE, ARTICLE 10 OF THE LEASE EXPRESSLY INCORPORATES BY
REFERENCE THE ATTACHED SCHEDULE OF IMPROVEMENTS. THIS PARAGRAPH WAS
RETAINED BY THE SUPPLEMENTAL AGREEMENT. RITCH'S PREDECESSORS SEPARATELY
EXECUTED THE REVISED SCHEDULE ATTACHED TO THE JUNE 30, 1950,
SUPPLEMENTAL AGREEMENT AS WELL AS THE AGREEMENT ITSELF. PARAGRAPH FIVE
OF THE SUPPLEMENTAL AGREEMENT-- WHICH IS ON THE SAME PAGE WHERE RITCH'S
PREDECESSORS SIGNED-- STATES:
"SCHEDULE OF IMPROVEMENTS ATTACHED TO SAID ORIGINAL LEASE AND
SUSPENSION AGREEMENT SHALL BE DELETED IN ITS ENTIRETY AND THERE IS
SUBSTITUTED THEREFOR A REVISED SCHEDULE OF IMPROVEMENTS WHICH IS
SPECIFICALLY LISTED ON THE ATTACHED 'SCHEDULE OF IMPROVEMENTS FOR LEASE
AND SUSPENSION AGREEMENT' ATTACHED HERETO AND MADE A PART HEREOF."
THERE IS NOTHING IN THE RECORD TO INDICATE THAT RITCH OR ITS
PREDECESSORS EVER OBJECTED TO THE REVISED SCHEDULE OR ITS POSSIBLE USE
TO SETTLE RESTORATION CLAIMS UP UNTIL APRIL 20, 1970 (ALMOST 20 YEARS
LATER). CONSEQUENTLY, ALTHOUGH THE PRIMARY PURPOSE OF THE SUPPLEMENTAL
AGREEMENT APPEARS TO BE TO INCORPORATE TRACE B-121 INTO THE LEASE, RITCH
WAS CONTRACTUALLY BOUND TO THE REVISED SCHEDULE OF IMPROVEMENTS AS THE
BASIS OF THE RESTORATION SETTLEMENT, IN THE ABSENCE OF ANY INDICATION
THAT RITCH'S PREDECESSORS' EXECUTION OF THE SUPPLEMENTAL AGREEMENT AND
THE REVISED SCHEDULE WAS OTHER THAN VOLUNTARY OR A CLEAR SHOWING THAT
THE REVISED SCHEDULE WAS ERRONEOUS. SEE GENE PETERS, SUPRA. THEREFORE,
THE ARMY'S USE OF THE REVISED SCHEDULE TO DETERMINE THE RESTORATION OF
THE IMPROVEMENTS SETTLEMENT APPEARS TO BE PROPER UNDER THE
CIRCUMSTANCES.
3. SUMMARY
RITCH HAS NOT ESTABLISHED THAT ITS APPRAISED VALUES FOR THE
IMPROVEMENTS ARE MORE REFLECTIVE OF THE ACTUAL REPRODUCTION COSTS THAN
THE ARMY'S APPRAISAL. NEITHER IS THERE ANY PROBATIVE EVIDENCE OF RECORD
WHICH DEMONSTRATES THAT THE ARMY'S APPRAISALS ARE IN ERROR. IN THIS
REGARD, WE NOTE THAT THE ARMY HAS SETTLED THE VAST MAJORITY OF WHITE
SALES MISSLE RANGE LEASES ON THIS BASIS.
IN VIEW OF THE FOREGOING, WE CANNOT DISAGREE THAT THE ARMY'S
REPRODUCTION COST LESS DEPRECIATION SETTLEMENT BASIS WAS THE FAIR VALUE
THAT THE IMPROVEMENTS CONTRIBUTED TO THE VALUE OF THE PREMISES. SEE
UNITED STATES V. CORBIN, SUPRA; UNITED STATES V. BENNING, 330 F.2D 527
(9TH CIR. 1964). NEITHER CAN WE DISAGREE WITH THE ARMY'S DETERMINATION
THAT THE PROPOSED SETTLEMENT DOES NOT EXCEED THE DIMINUTION IN VALUE OF
THE PREMISES (LAND AND IMPROVEMENTS) THAT WAS CAUSED BY THE GOVERNMENT'S
USE AND OCCUPANCY UNDER THE LEASE, SINCE THE GOVERNMENT TOTALLY
DESTROYED THE IMPROVEMENTS-- AND THEREBY THE VALUE THE IMPROVEMENTS
CONTRIBUTED TO THE PREMISES-- AND DAMAGED THE LAND AS WELL.
V. PRIOR RESTORATION PAYMENT
RITCH ASSERTS THAT THE ARMY'S DEDUCTION OF $3,030 FROM THE PROPOSED
SETTLEMENT FOR PRIOR RESTORATION PAYMENTS WAS IMPROPER. THE ARMY NOW
STATES THAT THERE IS NO DOCUMENTED EVIDENCE TO SUPPORT THE DEDUCTION
FROM THE PROPOSED $56,143.50 SETTLEMENT.
VI. CONCLUSION
ACCORDINGLY, BY THIS DECISION WE ARE ADVISING THE ARMY THAT, IF RITCH
IS WILLING TO ACCEPT A $56,143.50 SETTLEMENT FOR THE GOVERNMENT'S
OBLIGATION TO RESTORE THE IMPROVEMENTS ON THE PREMISES, IT SHOULD MAKE
PAYMENT IN THAT AMOUNT UPON OBTAINING A FULL AND COMPLETE RELEASE FROM
RITCH THAT WILL PREVENT ANY SUBSEQUENT OR ADDITIONAL CLAIMS ARISING OUT
OF THE IMPROVEMENTS IN THE PRESENT LEASEHOLD CONDEMNATION, THE PLANNED
FEE SIMPLE CONDEMNATION, OR UNDER THE TUCKER ACT, 28 U.S.C. 1346, ET
SEQ. (1970). ON THE OTHER HAND, IF RITCH IS UNWILLING TO SETTLE THE
IMPROVEMENTS' RESTORATION CLAIM ON THIS BASIS NOW, SETTLEMENT CAN BE
DELAYED UNTIL THE LAND IS ACQUIRED BY THE GOVERNMENT IN FEE SIMPLE. SEE
UNITED STATES V. GILA RIVER PIMA-MARICOPA INDIAN COMMUNICTY, SUPRA.
B-186133, OCTOBER 20, 1977
HEADNOTES - UNAVAILABLE
WHETHER BIDDER IS "REGULAR DEALER" UNDER WALSH-HEALEY ACT IS FOR
DETERMINATION BY CONTRACTING AGENCY, SUBJECT TO REVIEW BY SECRETARY OF
LABOR, AND WILL NOT BE CONSIDERED BY GAO.
CHARLES J. DISPENZA & ASSOCIATES:
CHARLES J. DISPENZA & ASSOCIATES (DISPENZA) PROTESTS THE DEPARTMENT
OF LABOR'S FINAL DETERMINATION THAT DISPENZA IS NOT A "REGULAR DEALER"
WITHIN THE MEANING OF THE WALSH-HEALEY PUBLIC CONTRACTS ACT AND
IMPLEMENTING REGULATIONS AND THUS IS INELIGIBLE FOR AWARD UNDER
SOLICITATION NO. DSA-400-76-B-3243, ISSUED BY THE DEFENSE LOGISTICS
AGENCY. DISPENZA ADDITIONALLY CONTENDS THAT THE MINNESOTA CHEMICAL
CORPORATION, THE AWARDEE UNDER ANOTHER SOLICITATION, SHOULD ALSO BE
DETERMINED NOT TO BE A "REGULAR DEALER" WITHIN THE MEANING OF THE SAME
ACT AND REGULATIONS.
THE RESPONSIBILITY FOR DETERMINING WHETHER A BIDDER IS A REGULAR
DEALER UNDER THE WALSH-HEALEY ACT, 41 U.S.C. 35-45 (1970), RESTS IN THE
FIRST INSTANCE WITH THE CONTRACTING AGENCY AND IS SUBJECT TO REVIEW BY
THE SECRETARY OF LABOR AND WILL NOT BE CONSIDERED BY THIS OFFICE. ACME
PLASTICS, INC., B-189018, JUNE 8, 1977, 77-1 CPD 415.
THEREFORE, WE ARE CLOSING OUR FILE WITHOUT FURTHER ACTION.
B-189550, OCTOBER 20, 1977
HEADNOTES - UNAVAILABLE
BID UNDER FORMALLY ADVERTISED SMALL BUSINESS SET-ASIDE WHICH INCLUDED
REPRESENTATION THAT CONTRACT END ITEM WOULD NOT BE MANUFACTURED OR
PRODUCED BY SMALL BUSINESS CONCERN WAS PROPERLY REJECTED AS
NONRESPONSIVE. THEREFORE, AWARD TO SUCH BIDDER WOULD CONSTITUTE
WITHDRAWAL OF SMALL BUSINESS SET-ASIDE. WHERE SMALL BUSINESS SET-ASIDE
IS WITHDRAWN, PROPER PROCEDURE IS TO RESOLICIT SO THAT ALL ELIGIBLE
BIDDERS, INCLUDING LARGE BUSINESSES, HAVE OPPORTUNITY TO COMPETE.
ALUMINUM ALLOYS CORPORATION:
ON MAY 17, 1977, THE DEPARTMENT OF THE NAVY (NAVY) ISSUED INVITATION
FOR BIDS (IFB) N00383-77-B-0389 FOR THE PROCUREMENT OF METALLIC TUBES.
THE PROCUREMENT WAS A 100-PERCENT SMALL BUSINESS SET-ASIDE. BIDS WERE
OPENED ON JUNE 17, 1977, WITH THE FOLLOWING RESULTS FOR 210 METALLIC
TUBES:
BIDDER . . . UNIT PRICE . . . TOTAL PRICE
ALUMINUM ALLOYS CORPORATION . . . $124.00 . . . $26,040
L&S MACHINE CO., INC. . . . 145.95 . . . 30,649
F&H MANUFACTURING CO. . . . 187.50 . . . 39,375
WESS-DELL MACHINE & ENGINEERING CO. . . . 212.50 . . . 44,625
ALUMINUM ALLOYS CORPORATION (AAC), THE LOW BIDDER AND PROTESTER,
INDICATED IN ITS BID THAT THE METALLIC TUBING WOULD NOT BE MANUFACTURED
OR PRODUCED BY A SMALL BUSINESS CONCERN. CONSEQUENTLY, THE NAVY
DETERMINED THAT AAC'S BID WAS NONRESPONSIVE.
ON JUNE 24, 1977, THE CONTRACT WAS AWARDED TO L&S MACHINE CO., INC.
(L&S), THE SECOND LOW BIDDER. L&S REPRESENTED IN ITS BID THAT THE
SPECIFIED METALLIC TUBING WOULD BE PRODUCED BY A SMALL BUSINESS CONCERN
AND THAT IT WAS A SMALL BUSINESS MANUFACTURER OF THE SUPPLIES OFFERED.
AAC PROTESTS THE REJECTION OF ITS BID AND CONTENDS THAT NO BIDDER
COULD ACCURATELY STATE THAT IT WOULD MANUFACTURE THE METALLIC TUBING,
BECAUSE ONLY TWO ALUMINUM MILLS IN THE COUNTRY, BOTH OF WHICH ARE LARGE
BUSINESSES, MANUFACTURE THE TUBES. AAC CONTENDS FURTHER THAT THE ONLY
PROCESSING THAT ANY OF THE BIDDERS WOULD BE CAPABLE OF DOING WOULD BE TO
PACKAGE THE TUBES AS REQUIRED BY THE SOLICITATION. HENCE, AAC STATES
THAT AS LOW BIDDER IT SHOULD HAVE BEEN AWARDED THE CONTRACT.
AN INVESTIGATION BY THE CONTRACTING OFFICER REVEALED THAT AAC'S
ALLEGATIONS CONCERNING THE MANUFACTURING AND PACKAGING OF THE TUBING
WERE ESSENTIALLY CORRECT. THE CONTRACTING OFFICER WAS ALSO AWARE OF OUR
DECISION IN 49 COMP.GEN. 41 (1969) WHERE WE HELD IN PART THAT:
"THE STATUTES (10 U.S.C. 2301 AND 15 ID. 644) DECLARE THAT IN CERTAIN
CONDITIONS AWARDS OF THE PRIME CONTRACTS SHOULD BE MADE TO SMALL
BUSINESS, BUT ARE SILENT WITH RESPECT TO SUBCONTRACTS. THEREFORE, OUR
OFFICE MAY DO NO MORE THAN INSIST THAT THE CONTRACTING AGENCY CONDUCT
ITS SMALL BUSINESS PROCUREMENT IN A MANNER WHICH IS NOT INCONSISTENT
WITH EXISTING LAW, REGULATION AND PROPER CONTRACT PROVISIONS. SEE,
ALSO, B-148155, MAY 17, 1962. * * * IT IS SIGNIFICANT TO NOTE THAT THE
TERM 'END ITEM' AS USED IN PARAGRAPH 1-706.5 OF THE ARMED SERVICES
PROCUREMENT REGULATION, FROM WHICH THE CONTRACT 'NOTICE OF TOTAL SMALL
BUSINESS SET-ASIDE' CLAUSE WAS TAKEN, IS NOT DEFINED. CONSEQUENTLY, IT
HAS BEEN THE POSITION OF OUR OFFICE THAT, SO LONG AS THE SMALL BUSINESS
FIRM, WHICH HAS SUBCONTRACTED A MAJOR PORTION OF THE WORK TO LARGE
BUSINESS, MAKES SOME SIGNIFICANT CONTRIBUTION TO THE MANUFACTURE OF
PRODUCTION OF THE CONTRACT END ITEM, THE CONTRACTUAL REQUIREMENT THAT
THE 'END ITEM' BE MANUFACTURED OR PRODUCED BY SMALL BUSINESS CONCERNS
HAS BEEN MET. SEE 39 COMP.GEN. 435 (1959); B-148155, SUPRA, B-154207,
NOVEMBER 20, 1964."
UNDER THE CIRCUMSTANCES, THE CONTRACTING OFFICER CONCLUDED THAT L&S
WAS NOT THE MANUFACTURER OF THE TUBING; IT WAS DOUBTFUL WHETHER L&S
WOULD MAKE A SIGNIFICANT CONTRIBUTION TO THE PRODUCTION OF THE END ITEM;
AND, CONSEQUENTLY, IT WAS QUESTIONABLE WHETHER L&S COULD PERFORM THE
CONTRACT IN ACCORDANCE WITH THE SMALL BUSINESS SET-ASIDE PROVISIONS.
AFTER DISCUSSING THE MATTER WITH L&S, THE CONTRACTING OFFICER OFFERED
AND L&S ACCEPTED A NO-COST CANCELLATION OF THE CONTRACT. THE
CONTRACTING OFFICER STATES THAT IT WAS IN THE BEST INTERESTS OF EVERYONE
CONCERNED TO CANCEL THE CONTRACT AND RESOLICIT ON AN UNRESTRICTED BASIS,
I.E., ISSUE A SOLICITATION WHICH DOES NOT CONTAIN A SMALL BUSINESS
SET-ASIDE REQUIREMENT.
AAC PROTESTS THE CONTRACTING OFFICER'S DECISION TO RESOLICIT FOR
METALLIC TUBING. MORE SPECIFICALLY, AAC STATES THAT THE CONTRACTING
OFFICER SHOULD HAVE AWARDED IT THE CONTRACT AFTER THE CONTRACT WITH L&S
WAS CANCELED.
WITH REGARD TO THE DETERMINATION THAT AAC'S BID WAS NONRESPONSIVE, WE
HAVE CONSISTENTLY HELD THAT WHERE, AS HERE, A BID ON A TOTAL SMALL
BUSINESS SET-ASIDE PROCUREMENT FAILS TO INDICATE THE INTENTION OF THE
BIDDER TO FURNISH PRODUCTS MANUFACTURED OR PRODUCED BY SMALL BUSINESS
CONCERNS, THE BID IS PROPERLY REJECTED AS NONRESPONSIVE. AMERICAN
AMPLIFIER AND TELEVISION CORPORATION, 53 COMP.GEN. 463, 465 (1974), 74-1
CPD 10.
IN CONNECTION WITH AAC'S CONTENTION THAT AS LOW BIDDER IT SHOULD HAVE
BEEN AWARDED THE CONTRACT, THE NAVY STATES THAT AAC, IN EFFECT, REQUESTS
THAT THE SMALL BUSINESS SET-ASIDE PROVISION BE IGNORED BECAUSE NO BIDDER
WAS ELIGIBLE FOR AWARD. THE NAVY CALLS ATTENTION TO LAWRENCE W. ROSINE
CO., 55 COMP.GEN. 1351 (1976), 76-2 CPD 159, WHERE ROSINE, THE ONLY
BIDDER, WAS AWARDED A CONTRACT CONDITIONED UPON ITS BEING DETERMINED TO
BE A SMALL BUSINESS BY THE SMALL BUSINESS ADMINISTRATION (SBA). SBA
SUBSEQUENTLY DETERMINED THAT ROSINE WAS A LARGE BUSINESS. THE NAVY
ASKED WHETHER THE AWARD COULD BE REINSTATED SINCE ROSINE WAS THE ONLY
BIDDER. WE ADVISED THE NAVY THAT THE AWARD TO ROSINE COULD NOT BE
REINSTATED SINCE THE SOLICITATION REQUIRED THAT AWARD BE MADE TO A SMALL
BUSINESS CONCERN, AND AN AWARD TO ROSINE WOULD BE TANTAMOUNT TO A
WITHDRAWAL OF THE SMALL BUSINESS SET-ASIDE. WE WENT ON TO STATE THAT
WHERE A SMALL BUSINESS SET-ASIDE IS WITHDRAWN, THE PROPER PROCEDURE IS
TO RESOLICIT SO THAT ALL ELIGIBLE BIDDERS MAY HAVE AN OPPORTUNITY TO
COMPLETE.
SINCE AAC INDICATED IN ITS BID THAT THE METALLIC TUBES WOULD NOT BE
MANUFACTURED OR PRODUCED BY A SMALL BUSINESS CONCERN, THE AWARD OF THE
CONTRACT TO AAC WOULD CONSTITUTE A WITHDRAWAL OF THE SMALL BUSINESS
SET-ASIDE AND, AS WE HELD IN LAWRENCE W. ROSINE CO., SUPRA, THE
PROCURING ACTIVITY WOULD RESOLICIT AFTER WITHDRAWING A SMALL BUSINESS
SET-ASIDE SO THAT ALL ELIGIBLE BIDDERS, INCLUDING LARGE BUSINESSES, HAVE
A CHANCE TO COMPETE.
BASED ON THE FOREGOING, WE CONCLUDE THAT THE NAVY COULD NOT HAVE
PROPERLY AWARDED THE CONTRACT TO AAC. ACCORDINGLY, AAC'S PROTEST IS
DENIED.
B-189755, OCTOBER 20, 1977
HEADNOTES - UNAVAILABLE
SMALL BUSINESS'S PROTEST OF AGENCY'S FINDING THAT IT IS
NONRESPONSIBLE IS DISMISSED WHERE MATTER HAS BEEN REFERRED TO SBA FOR
FINAL DISPOSITION UNDER SECTION 501 OF P.L. 95-89.
CORVALLIS AERO SERVICE, INC.:
CORVALLIS AERO SERVICE, INC. (CORVALLIS), A SMALL BUSINESS, HAS
PROTESTED THE U.S. DEPARTMENT OF AGRICULTURE, FOREST SERVICE'S
DETERMINATION THAT CORVALLIS HAS BEEN UNABLE TO DEMONSTRATE ITS
RESPONSIBILITY TO PERFORM UNDER SOLICITATION NO. R6-77-137 FOR
HELICOPTER SERVICES.
SECTION 501 OF P.L. 95-89, 91 STAT. 561, AMENDING SECTION 8(B) OF THE
SMALL BUSINESS ACT OF 1958, STATES THAT THE SMALL BUSINESS
ADMINISTRATION (SBA) IS EMPOWERED IN ITS DISCRETION.
"TO CERTIFY TO GOVERNMENT PROCUREMENT OFFICERS AND OFFICERS ENGAGED
IN THE SALE AND DISPOSAL OF FEDERAL PROPERTY, WITH RESPECT TO ALL
ELEMENTS OF RESPONSIBILITY, INCLUDING BUT NOT LIMITED TO CAPABILITY,
COMPETENCY, CAPCITY, CREDIT, INTEGRITY PERSEVERANCE, AND TENACITY, OF
ANY SMALL BUSINESS CONCERN OR GROUP OF SUCH CONCERNS TO RECEIVE AND
PERFORM A SPECIFIC GOVERNMENT CONTRACT. A GOVERNMENT PROCUREMENT
OFFICER OR AN OFFICER ENGAGED IN THE SALE AND DISPOSAL OF FEDERAL
PROPERTY MAY NOT, FOR ANY REASON SPECIFIED IN THE PRECEDING SENTENCE,
PRECLUDE ANY SMALL BUSINESS CONCERN OR GROUP OF SUCH CONCERNS FROM BEING
AWARDED SUCH CONTRACT WITHOUT REFERRING THE MATTER FOR FINAL DISPOSITION
TO THE ADMINISTRATION."
THE FOREST SERVICE HAS ADVISED US THAT THE MATTER HAS BEEN REFERRED
TO SBA FOR FINAL DISPOSITION.
ACCORDINGLY, THE PROTEST IS DISMISSED.
B-189836, OCTOBER 20, 1977
HEADNOTES - UNAVAILABLE
PROTEST ALLEGING AMBIGUOUS AND RESTRICTIVE SPECIFICATIONS AND
IMPROPER BOND REQUIREMENTS IS UNTIMELY WHERE BASIS FOR PROTEST WAS
APPARENT FROM IFB BUT PROTEST WAS NOT FILED UNTIL AFTER BID OPENING.
SACRAMENTO METROPOLITAN REFUSE CO.:
SACRAMENTO METROPOLITAN REFUSE CO. (SMRC) PROTESTS THE AWARD OF A
CONTRACT TO U.S. EAGLE, INC., UNDER INVITATION FOR BIDS (IFB) NO.
F04612-77-B-0008 ISSUED BY MATHER AIR FORCE BASE FOR REFUSE COLLECTION
SERVICES FOR FISCAL YEAR 1978 WITH AN OPTION TO RENEW THE CONTRACT IN
FISCAL YEARS 1979 AND 1980.
BIDS WERE OPENED ON JULY 26, 1977. U.S. EAGLE, INC., WAS THE LOW
BIDDER AND HAS BEEN AWARDED THE CONTRACT. SMRC PROTESTED BY LETTER
DATED AUGUST 2, 1977, ON GROUNDS THAT THE USE OF THE IDENTICAL CAPTION
"BID GUARANTEE" TO HEAD EACH OF TWO DIFFERENT CLAUSES CONTAINED IN
SECTION " C" OF THE IFB CREATED AN AMBIGUITY; THAT THE IFB REQUIRED
PAYMENT, PERFORMANCE AND BID BONDS ALTHOUGH CONTRACTS OF THE TYPE
SOLICITED ARE ALLEGEDLY EXEMPTED FROM SUCH BONDS BY THE MILLER ACT, 40
U.S.C. 270A-270D (1970); AND THAT THE GOVERNMENT INAPPROPRIATELY USED
INFORMATION SUPPLIED BY THE INCUMBENT CONTRACTOR TO DEVELOP RESTRICTIVE
IFB SPECIFICATIONS REQUIRING TRUCKS HAVING A SPECIFIC CUBIC YARD
CAPACITY. THE LATTER OBJECTION APPEARS TO HAVE BEEN RENDERED MOOT BY
THE MAY 24, 1977, AMENDMENT OF THE IFB WHICH REMOVED THE SPECIFIC
RESTRICTION ON THE SIZE AND TYPE OF TRUCK REQUIRED.
IN ANY EVENT, OUR BID PROTEST PROCEDURES, 4 C.F.R. 20.2(B)(1) (1977),
REQUIRE THAT PROTESTS BASED UPON ALLEGED IMPROPRIETIES IN A SOLICITATION
WHICH ARE APPARENT PRIOR TO BID OPENING SHALL BE FILED PRIOR TO BID
OPENING. BECAUSE THE PROTEST WAS NOT FILED PRIOR TO THE BID OPENING,
THE PROTEST IS UNTIMELY AND WILL NOT BE CONSIDERED ON THE MERITS.
B-190287, B-190303, OCTOBER 20, 1977
HEADNOTES - UNAVAILABLE
1. PROTEST OF ALLEGED IMPROPRIETY IN SOLICITATION NOT FILED PRIOR TO
BID OPENING OR TO CLOSING DATE FOR RECEIPT OF PROPOSALS IS UNTIMELY AND
NOT FOR CONSIDERATION.
2. PROTEST THAT SOLICITATION SHOULD NOT HAVE BEEN SET ASIDE FOR
SMALL BUSINESS CONCERNS IS DISMISSED SINCE IT APPEARS THAT PROTESTER IS
PRIMARILY CONCERNED WITH APPLICABLE SIZE STANDARD AND HAS TAKEN MATTER
TO SMALL BUSINESS ADMINISTRATION, WHICH HAS AUTHORITY TO DETERMINE SIZE
STANDARDS.
RELIANCE ELECTRIC COMPANY:
RELIANCE ELECTRIC COMPANY (RELIANCE) PROTESTS THE AWARD OF 13
SOLICITATIONS ISSUED BY THE VETERANS ADMINISTRATION (V.A.) FOR ELEVATOR
MAINTENANCE SERVICES AT VARIOUS V.A. INSTALLATIONS. RELIANCE PROTESTS
THE USE OF NEGOTIATION UNDER ONE SOLICITATION, AND PROTESTS THE SMALL
BUSINESS SET-ASIDE STATUS OF THE OTHER 12 SOLICITATIONS, ALLEGING THAT
SUCH DESIGNATION "ARBITRARILY AND UNDULY RESTRICTS COMPETITION" AND "IS
CONTRARY TO THE BEST INTERESTS OF THE UNITED STATES." RELIANCE'S
OBJECTION TO THE SET-ASIDES APPEARS TO BE BASED ON THE APPLICATION OF
THE SMALL BUSINESS ADMINISTRATION'S (SBA) SIZE STANDARD, PURSUANT TO
WHICH RELIANCE DOES NOT QUALIFY AS A SMALL BUSINESS CONCERN FOR PURPOSES
OF AWARD. IN THIS REGARD, RELIANCE ADVISES THAT IT HAS PREPARED AN
APPLICATION FOR CERTIFICATION BY SBA AS A SMALL BUSINESS UNDER A REVISED
SIZE STANDARD.
FOR THE MOST PART, THE PROTEST IS EITHER UNTIMLY OR MOOT. THE
OBJECTION TO THE SMALL BUSINESS SET-ASIDES RELATES TO AN ALLEGED
DEFICIENCY IN THE SOLICITATIONS. SECTION 20.2(B)(1) OF OUR BID PROTEST
PROCEDURES, 4 C.F.R. 20.2(B)(1) (1977), PROVIDES THAT A PROTEST BASED
UPON AN ALLEGED IMPROPRIETY IN ANY TYPE OF SOLICITATION, WHICH IS
APPARENT PRIOR TO BID OPENING OR THE CLOSING DATE FOR RECEIPT OF INITIAL
PROPOSALS, MUST BE FILED "PRIOR TO BID OPENING OR THE CLOSING DATE FOR
RECEIPT OF INITIAL PROPOSALS." WITH RESPECT TO EIGHT OF THE
SOLICITATIONS, WE HAVE BEEN ADVISED THAT THE BID OPENING DATE OR DATE
FOR RECEIPT OF PROPOSALS PRECEDED RELIANCE'S FILING OF ITS PROTEST WITH
THIS OFFICE. WE HAVE BEEN FURTHER ADVISED THAT THREE OF THE PROTESTED
SOLICITATIONS, INCLUDING THE ONE INVOLVING USE OF NEGOTIATION, HAVE BEEN
CANCELED, THEREBY RENDERING MOOT THE PROTEST INSOFAR AS IT IS DIRECTED
TO THESE SOLICITATIONS.
WITH RESPECT TO THE REMAINING TWO SOLICITATIONS (ONE INVOLVING A SOLE
SOURCE NEGOTIATED AWARD MADE ON SEPTEMBER 30, 1977 AND THE OTHER HAVING
A BID OPENING DAT OF OCTOBER 18, 1977), WE SEE LITTLE POINT IN OUR
CONSIDERING THE MATTER. WE HAVE CONSISTENTLY HELD THAT THE DECISION
WHETHER A PARTICULAR PROCUREMENT SHOULD BE SET ASIDE FOR SMALL BUSINESS
CONCERNS IS WITHIN THE AUTHORITY AND DISCRETION OF THE CONTRACTING
AGENCY. SEE PAR-METAL PRODUCTS, INC., B-190016, SEPTEMBER 26, 1977,
77-2 CPD . . . . IN THAT CASE WE DECLINED TO CONSIDER A PROTEST OF THE
AGENCY'S DECISION NOT TO SET ASIDE A PROCUREMENT FOR SMALL BUSINESS.
ALTHOUGH WE CONTINUE TO REVIEW COMPLAINTS DIRECTED TO THE SETTING ASIDE
OF PROCUREMENTS FOR SMALL BUSINESS TO DETERMINE IF THERE HAS BEEN
COMPLIANCE WITH APPLICABLE REGULATIONS, SEE J. H. RUTTER REX
MANUFACTURING COMPANY, INC., 55 COMP.GEN. 902 (1976), 76-1 CPD 182, IT
APPEARS THAT IN THIS CASE THE PROTESTER'S PRIMARY, IF NOT SOLE, CONCERN
IS THAT UNDER THE EXISTING APPLICABLE SIZE STANDARD IT AND OTHER FIRMS
SIMILARLY SITUATED ARE (BUT SHOULD NOT BE) EXCLUDED FROM PARTICIPATING
IN PROCUREMENTS THAT ARE SET ASIDE FOR SMALL BUSINESSES EXCLUSIVELY.
PURSUANT TO 15 U.S.C. 637(B)(6) (1970), THE AUTHORITY TO DETERMINE
SIZE STANDARDS AND THE SIZE STATUS OF A BUSINESS CONCERN FOR A
PARTICULAR PROCUREMENT IS VESTED EXCLUSIVELY IN THE SBA. GIBRALTAR
INDUSTRIES, INCORPORATED, B-188880, MAY 16, 1977, 77-1 CPD 345. AS
STATED ABOVE, RELIANCE HAS IN FACT TAKEN THE MATTER UP WITH SBA. THUS,
WE BELIEVE THIS MATTER IS FOR RESOLUTION BY RELIANCE AND THE SBA RATHER
THAN THIS OFFICE.
THE PROTEST IS DISMISSED.
B-189251, OCTOBER 19, 1977
HEADNOTES - UNAVAILABLE
EPA SOLICITATION CALLING FOR AUDITING SERVICES OF CERTIFIED PUBLIC
ACCOUNTANTS IS NOT AMBIGUOUS AND IS NOT UNNECESSARILY RESTRICTIVE OF
COMPETITION.
GEORGE A. ARETAKIS & ASSOCIATES:
GEORGE A. ARETAKIS (ARETAKIS) PROTESTS THE AWARD OF A CONTRACT TO ANY
OTHER OFFEROR UNDER REQUEST FOR PROPOSALS (RFP) NO. WA 77-B302 ISSUED BY
THE ENVIRONMENTAL PROTECTION AGENCY (EPA) ON MARCH 15, 1977, FOR
AUDITING SERVICES IN SIX REGIONS (I, III, V, VI, VIII AND X). THE
ISSUES PRESENTED BY THIS PROTEST ARE WHETHER THE RFP LIMITED THE
CATEGORY OF QUALIFIED OFFERORS TO CERTIFIED PUBLIC ACCOUNTANTS (CPA'S)
AND, IF SO, WHETHER SUCH A REQUIREMENT IS UNNECESSARILY RESTRICTIVE OF
COMPETITION. IN ADDITION, ARETAKIS, WHO IS AN EXPERIENCED ACCOUNTANT,
BUT NOT A CPA, COMPLAINS THAT UNDER THE LAWS OF THE STATE OF CONNECTICUT
HE WAS UNFAIRLY DENIED CREDIT FOR THE TWO PARTS OF THE CPA EXAMINATION
WHICH HE HAS PASSED.
WITH RESPECT TO ARETAKIS' CONTENTION ON THE FIRST ISSUE, IT IS TRUE
THAT THE RFP DOES NOT EXPLICITLY SET FORTH A REQUIREMENT THAT OFFERORS
BE LICENSED AS CPA'S. THERE IS, HOWEVER, CONSIDERABLE SUPPORT FOR THE
POSITION OF THE EPA THAT SUCH A REQUIREMENT IS IMPLICIT IF THE RFP AND
THE DOCUMENT WHICH IS INCORPORATED BY REFERENCE ARE CONSIDERED TOGETHER.
THE DOCUMENT THAT IS INCORPORATED BY REFERENCE IN THE RFP IS A PAMPHLET
BY THE COMPTROLLER GENERAL OF THE UNITED STATES ENTITLED "STANDARDS FOR
AUDIT OF GOVERNMENTAL ORGANIZATIONS, PROGRAMS, ACTIVITIES, AND
FUNCTIONS" (1974 REPRINT) AND IS REFERENCED BOTH IN THE STATEMENT OF
WORK SECTION AND ON PAGE 3 OF THE RFP. APPENDIX I OF THE "STANDARDS"
PAMPHLET STATES: "WHEN OUTSIDE AUDITORS ARE EMPLOYED FOR ASSIGNMENT
REQUIRING THE EXPRESSION OF AN OPINION ON FINANCIAL REPORTS OF
GOVERNMENT ORGANIZATIONS, ONLY FULLY QUALIFIED PUBLIC ACCOUNTANTS SHOULD
BE EMPLOYED." SINCE THE RFP STATEMENT OF WORK SECTION STATES THAT
"AUDITS WILL RESULT IN AUDIT REPORTS CONTAINING OPINIONS ON THE
FINANCIAL TRANSACTIONS AND BUSINESS PRACTICES OF THE GOVERNMENT UNITS OR
BUSINESS FIRMS INVOLVED," IT IS CLEAR THAT THE RFP SOUGHT OFFERS ONLY
FROM FULLY QUALIFIED PUBLIC ACCOUNTANTS. IT IS NOT DISPUTED THAT THE
TERM "FULLY QUALIFIED PUBLIC ACCOUNTANTS" REFERS ONLY TO LICENSED CPA'S
AND THOSE "PUBLIC ACCOUNTANTS" WHO WERE LICENSED ON OR BEFORE DECEMBER
31, 1970. SINCE MR. ARETAKIS IS NOT ONE OF THE RELATIVELY FEW "PUBLIC
ACCOUNTANTS" LICENSED ON OR BEFORE DECEMBER 31, 1970, THIS CATEGORY OF
ACCOUNTANTS WILL NOT BE FURTHER DISCUSSED.
ARETAKIS ALSO POINTS TO A SECTION OF THE RFP ENTITLED "EXTRACTS OF
SELECTED WORKING PAPERS" AS EVIDENCE THAT THE AUDITING SERVICES
CONTEMPLATED UNDER THE CONTRACT WOULD NOT REQUIRE AUDITORS TO PROVIDE A
FINANCIAL OPINION. ALTHOUGH THE "EXTRACTS" SECTION DOES NOT SET FORTH A
REQUIREMENT FOR A FINANCIAL OPINION, IT IS APPARENT THAT THIS SECTION
WAS NOT INTENDED AS A DESCRIPTION OF THE AUDITING SERVICES REQUIRED
UNDER THE CONTRACT. THE "EXTRACTS" SECTION WAS ESSENTIALLY A TEST OF
OFFERORS' AUDITING SKILLS. ACCORDING TO EPA, "PRIOR AUDITS WERE
REVIEWED FOR SPECIFIC PROBLEM AREAS AND OFFERS WERE ASKED TO COMMENT ON
THESE PROBLEM AREAS. THESE COMMENTS PROVIDE THE TECHNICAL EVALUATORS
WITH ONE OF SEVERAL TOOLS IN THE EVALUATION OF THE OFFEROR'S
UNDERSTANDING OF THE WORK TO BE PERFORMED."
WE BELIEVE THAT NOTHING IN THE "EXTRACTS" SECTION SUPPORTS ARETAKIS'
POSITION THAT CPA'S WERE NOT REQUIRED UNDER THE TERMS OF THE RFP.
ALTHOUGH IT IS OUR CONCLUSION THAT THE SPECIFICATIONS FOR AUDITING
SERVICES CONTAINED IN THE RFP ARE NOT AMBIGUOUS AND DO NOT CONSTITUTE A
BASIS FOR A SUCCESSFUL PROTEST, THEY COULD HAVE BEEN PRESENTED MORE
CONCISELY. WE RECOMMEND THAT IN FUTURE RFP'S THE SPECIFICATIONS STATE
WITH PRECISION THE KIND OF PROFESSIONAL QUALIFICATIONS THAT MAY BE
REQUIRED.
THE SECOND ISSUE RAISED BY THIS PROTEST IS WHETHER THE CPA
REQUIREMENT IS UNNECESSARILY RESTRICTIVE. ARETAKIS CONTENDS THAT A
NUMBER OF AUDITING FUNCTIONS DESCRIBED IN THE RFP DO NOT REQUIRE A CPA'S
"OPINION OF A FINANCIAL CONDITION." IT IS POINTED OUT THAT ACCORDING TO
THE RFP'S STATEMENT OF WORK SECTION, AN "AUDIT WILL GENERALLY CONSIST OF
AN EXAMINATION OF FINANCIAL AND COMPLIANCE MATTERS AND A REVIEW OF
EFFICIENCY AND ECONOMY IN CARRYING OUT PROJECT OR CONTRACT
RESPONSIBILITIES." THE THRUST OF ARETAKIS' ARGUMENT IS THAT THE
ECONOMY/EFFICIENCY PORTION OF THE AUDIT SHOULD BE SUBMITTED FOR BID
SEPARATE FROM THAT ASPECT OF THE AUDIT WHICH REQUIRES AN OPINION OF A
FINANCIAL CONDITION. IN THEORY, THIS WOULD ALLOW OTHERWISE QUALIFIED
ACCOUNTANTS WHO ARE NOT CPA'S TO BID ON A PORTION OF THE AUDITING WORK
AND THUS WOULD ALLOW GREATER COMPETITION. EPA, HOWEVER, STRONGLY
OPPOSES THE SUGGESTED SEGREGATION OF AUDITING FUNCTIONS:
"IT IS HIGHLY IMPRACTICAL TO SEPARATE ECONOMY/EFFICIENCY REVIEWS FROM
FINANCIAL/COMPLIANCE EXAMINATIONS IN AUDITS OF EPA GRANTS AND CONTRACTS.
BOTH ASPECTS ARE INTERRELATED, REQUIRING A KNOWLEDGE OF THE AUDITED
ACTIVITIES, ORGANIZATIONS, POLICIES AND PROCEDURES, AND OFTEN AN
EXAMINATION OF THE SAME RECORDS AND OTHER EVIDENTIAL MATERIALS.
CONTRACTING WITH SEPARATE FIRMS TO MAKE ECONOMY/EFFICIENCY REVIEWS, AS
WELL AS FINANCIAL/COMPLIANCE EXAMINATIONS OF THE SAME
GRANTEE/CONTRACTOR, WOULD INVOLVE UNNECESSARY DUPLICATION OF EFFORT.
THIS WOULD RESULT IN UNNECESSARY EXPENDITURE OF COSTS DUE TO THE
ADDITIONAL COST OF PERSONNEL, TRAVEL, AND PER DIEM. EQUALLY DISTASTEFUL
WOULD BE THE ADDITIONAL BURDEN PLACED ON THE FINANCIAL STAFFS OF THE
GRANTEE/CONTRACTOR IN PREPARING FOR DUAL AUDITS. FINALLY, AUDIT
FINDINGS WOULD BE SIGNIFICANTLY DELAYED AWAITING THE RESULTS OF THE
PARTIAL AUDITS AND THE COMBINING OF THE INDIVIDUAL AUDITS AT COMPLETION.
THE USE OF SEPARATE AUDITORS TO PERFORM ECONOMY/EFFICIENCY AND
FINANCIAL/COMPLIANCE ORIENTED AUDITS CAN ONLY BE DESCRIBED AS
UNECONOMICAL AND INEFFICIENT."
IT IS WELL ESTABLISHED THAT CONTRACTING AGENCY OFFICIALS ARE ACCORDED
A BROAD RANGE OF DISCRETION IN MAKING DETERMINATIONS OF MINIMUM NEEDS
AND THEIR JUDGMENT WILL NOT BE CHALLENGED BY OUR OFFICE UNLESS IT IS
SHOWN TO BE UNREASONABLE. WINSLOW ASSOCIATES, 53 COMP.GEN. 478 (1974),
74-1 CPD 15. SINCE EPA'S JUDGMENT ON ITS AUDITING NEEDS APPEARS TO BE
RATIONAL, WE CONCLUDE THAT THE SPECIFICATIONS ARE NOT UNNECESSARILY
RESTRICTIVE OF COMPETITION.
WITH RESPECT TO ARETAKIS' COMPLAINT THAT THE LAWS OF CONNECTICUT
UNFAIRLY DENIED HIM CREDIT FOR THE TWO PARTS OF THE CPA EXAMINATION
WHICH HE HAS PASSED, OUR OFFICE HAS NO AUTHORITY TO QUESTION STATE
LEGISLATION EXCEPT WHERE THERE MAY BE A CONFLICT BETWEEN STATE AND
FEDERAL LAW. SINCE ARETAKIS' COMPLAINT DOES NOT SUGGEST THAT SUCH A
CONFLICT EXISTS, AND NO CONFLICT IS INDICATED BY THE RECORD, WE HAVE NO
BASIS TO CONSIDER THE MERITS OF ARETAKIS' ALLEGATION.
ACCORDINGLY, THE PROTEST IS DENIED.
B-189764, OCT 19, 1977
HEADNOTES - UNAVAILABLE
AIR FORCE MEMBER SERVING IN A CRITICAL SKILL PRIOR TO HIS
REENLISTMENT IS ENTITLED TO A VARIABLE REENLISTMENT BONUS UNDER 37
U.S.C. 308(G) (SUPP. I, 1965) NOTWITHSTANDING THE FACT THAT HE
REENLISTED FOR THE PURPOSE OF BEING TRAINED AND SERVING IN A NEW
CRITICAL SKILL SINCE HIS OLD SKILL WAS A PREREQUISITE TO TRAINING FOR
THE NEW SKILL, AND, THUS, THE OLD SKILL WOULD CONTINUE TO BE UTILIZED
AND NOT LOST TO THE AIR FORCE. 53 COMP.GEN. 794 (1974). HOWEVER, HE IS
ENTITLED ONLY TO THE MULTIPLIER DESIGNATED FOR HIS OLD SKILL AND NOT TO
THE MULTIPLIER FOR HIS NEW SKILL.
STAFF SERGEANT EDWARD L. SOSEBEE, JR., USAF:
THIS ACTION IS IN RESPONSE TO AN APPEAL BY FORMER STAFF SERGEANT
EDWARD L. SOSEBEE, JR., USAF, 000-00-7410, FROM THE DETERMINATION OF THE
CLAIMS DIVISION OF THIS OFFICE WHICH ON JUNE 3, 1977, DISALLOWED HIS
CLAIM FOR A VARIABLE REENLISTMENT BONUS (VRB).
SERGEANT SOSEBEE REENLISTED IN THE UNITED STATES AIR FORCE ON AUGUST
5, 1966, IN ORDER TO QUALIFY FOR TRAINING AS A MUNITIONS DISPOSAL
TECHNICIAN, AIR FORCE SPECIALTY CODE (AFSC) 46430, WHICH AT THE TIME
CARRIED A VRB MULTIPLIER OF 4, I.E., A BONUS EQUAL TO 4 TIMES HIS
REGULAR REENLISTMENT BONUS. UNTIL JUST PRIOR TO HIS REENLISTMENT
SERGEANT SOSEBEE WAS A MUNITIONS SPECIALIST AFSC 46150, WHICH CARRIED A
VRB MULTIPLIER OF 2 EQUAL TO 2 TIMES THE REGULAR REENLISTMENT BONUS. ON
JULY 26, 1966, SERGEANT SOSEBEE WAS GRANTED APPROVAL TO BEGIN TRAINING
AS A MUNITIONS DISPOSAL TECHNICIAN CONDITIONED UPON HIS REENLISTING IN
THE AIR FORCE. SERGEANT SOSEBEE WAS PAID A VRB WITH A MULTIPLE OF 2
BASED ON HIS MUNITIONS SPECIALIST DESIGNATION RATHER THAN A MULTIPLE 4
VRB APPLICABLE TO MUNITIONS DISPOSAL TECHNICIANS. THE CLAIMS DIVISION
OF THIS OFFICE DENIED SERGEANT SOSEBEE'S CLAIM FOR A MULTIPLE 4 VRB
UNDER AUTHORITY OF 52 COMP.GEN. 416 (1973) SINCE SERGEANT SOSEBEE DID
NOT POSSESS THE MUNITIONS DISPOSAL TECHNICIAN SKILL AT THE TIME OF HIS
REENLISTMENT AND ALSO HELD THAT HE WAS NOT ENTITLED TO A MULTIPLIER OF 2
SINCE HE WAS NOT REENLISTED TO CONTINUE TO SERVE AS A MUNITIONS
TECHNICIAN, THE CRITICAL SKILL HE POSSESSED.
AT THE TIME OF SERGEANT SOSEBEE'S REENLISTMENT, 37 U.S.C. 308(G)
(SUPP. I, 1965) PROVIDED THAT A MEMBER DESIGNATED AS HAVING A CRITICAL
MILITARY SKILL AND WHO WAS ENTITLED TO A REENLISTMENT BONUS UNDER 37
U.S.C. 308(A) UPON HIS FIRST REENLISTMENT COULD BE PAID AN ADDITIONAL
AMOUNT NOT MORE THAN 4 TIMES THE AMOUNT OF SUCH BONUS. IN 52 COMP.GEN.
416, SUPRA, WE HELD THAT A MEMBER WHO AT THE TIME OF HIS REENLISTMENT
WAS QUALIFIED AND SERVING IN A CRITICAL SKILL (ANTITANK ASSAULTMAN) WAS
NOT ENTITLED TO A VRB WHEN IT WAS KNOWN PRIOR TO HIS REENLISTMENT THAT
UPON REENLISTING HIS CAREER FIELD WAS TO BE CHANGED AND HE WAS TO BE
TRAINED IN A NEW AND TOTALLY DIFFERENT SKILL (WEAPON REPAIRMAN). AFTER
REENLISTMENT HE WOULD NOT BE ASSIGNED TO THE CRITICAL SKILL WHICH HE
POSSESSED AT THE TIME OF HIS REENLISTMENT AND UPON WHICH HIS BONUS WAS
TO HAVE BEEN BASED. THE DETERMINATION WAS BASED ON THE PURPOSE OF THE
VRB, WHICH WAS TO INDUCE MEMBERS WITH CRITICAL SKILLS TO REENLIST SO
THAT THEIR SKILLS COULD BE USED AND NOT LOST TO THE SERVICE. HOWEVER,
IN 53 COMP.GEN. 794 (1974) WE CONSIDERED A SOMEWHAT SIMILAR SITUATION
WHERE THE MEMBER AT THE TIME OF REENLISTMENT HELD THE CRITICAL SKILL OF
AVIATION RADIO REPAIRMAN BUT WAS REENLISTED TO BE TRAINED IN THE RELATED
BUT MORE ADVANCED SKILL OF RADIO TECHNICIAN. THERE WE HELD THAT A
MEMBER SERVING IN A CRITICAL SKILL AT THE TIME OF HIS REENLISTMENT IS
ENTITLED TO A VRB UNDER 37 U.S.C. 308(G) NOTWITHSTANDING THE FACT THAT
HE REENLISTED FOR THE PURPOSE OF BEING TRAINED AND SERVING IN A NEW
CRITICAL SKILL IF SUCH NEW SKILL IS WITHIN THE SAME OCCUPATIONAL FIELD
AS THE OLD SKILL. IN THOSE CIRCUMSTANCES THE NEW SKILL WOULD REQUIRE
THE USE OF THE OLD SKILL PLUS ADDITIONAL TRAINING, AND, THUS, THE OLD
SKILL WOULD CONTINUE TO BE UTILIZED AND NOT LOST TO THE SERVICE.
AT THE TIME OF SERGEANT SOSEBEE'S REENLISTMENT, THE AIRMAN
CLASSIFICATION MANUAL, AFM 39-1 (APRIL 15, 1963), PAGE 46-29 (MARCH 31,
1965), PROVIDED THAT QUALIFICATION AS A MUNITIONS SPECIALIST WAS ONE OF
THE MANDATORY EXPERIENCE REQUIREMENTS TO ENTRY INTO TRAINING FOR THE
MUNITIONS DEMOLITION TECHNICAL SKILL. SINCE SERGEANT SOSEBEE'S POSITION
AS A MUNITIONS DISPOSAL SPECIALIST REQUIRED USE OF HIS OLD SKILL AS A
MUNITIONS SPECIALIST PLUS ADDITIONAL TRAINING, HIS OLD SKILL WOULD NOT
BE LOST TO THE AIR FORCE, AND HIS CASE FALLS WITHIN THE RULE SET OUT IN
53 COMP.GEN. 794, NOT THE RULE IN 52 COMP.GEN. 716. HOWEVER, THE SKILL
WHICH SERGEANT SOSEBEE POSSESSED AT THE TIME OF HIS REENLISTMENT WAS
THAT OF MUNITIONS SPECIALIST SINCE HE HAD NOT COMPLETED TRAINING AT THAT
TIME FOR MUNITIONS DEMOLITION TECHNICIAN. SINCE THE VRB MULTIPLE IS
BASED ON THE SKILL POSSESSED AT THE TIME OF REENLISTMENT,HE IS ENTITLED
ONLY TO VRB MULTIPLE 2, NOT MULTIPLE 4. INASMUCH AS SERGEANT SOSEBEE
HAS ALREADY RECEIVED A VRB WITH A MULTIPLIER OF 2 HE IS NOT ENTITLED TO
ANY ADDITIONAL PAYMENTS BY VIRTUE OF HIS REENLISTMENT ON AUGUST 5, 1966.
B-189877(3), OCTOBER 19, 1977
HEADNOTES - UNAVAILABLE
PROTEST BY SUCCESSFUL BIDDER AGAINST SOLICITATION PROVISION IS
DISMISSED BECAUSE PROTESTER NO LONGER CHALLENGES AWARD ITSELF, BUT TERMS
OF CONTRACT, A MATTER OF CONTRACT ADMINISTRATION WHICH IS FOR RESOLUTION
BY THE CONTRACTING AGENCY.
KENTUCKY BUILDING MAINTENANCE, INC.:
ON SEPTEMBER 8, 1977, KENTUCKY BUILDING MAINTENANCE, INC. (KENTUCKY)
PROTESTED TO OUR OFFICE THE REJECTION OF ITS AUGUST 11, 1977 PROTEST TO
THE CONTRACTING AGENCY AGAINST THE PROPRIETY OF A "SPECIAL NOTE"
CONTAINED IN AMENDMENT NO. 2 TO INVITATION FOR BIDS NO. 03C7-0885-01,
ISSUED BY THE GENERAL SERVICES ADMINISTRATION. NOTWITHSTANDING
KENTUCKY'S PROTEST TO THE AGENCY, BID OPENING TOOK PLACE ON AUGUST 16,
1977.
WE ARE ADVISED THAT, NOTWITHSTANDING THE ALLEGED SOLICITATION DEFECT,
KENTUCKY WAS ABLE TO SUBMIT A SUCCESSFUL BID UNDER THE INSTANT
SOLICITATION, NOTICE OF AWARD HAVING BEEN SENT TO THE PROTESTER BY
LETTER DATED SEPTEMBER 30, 1977. UNDER THE CIRCUMSTANCES, THE
PROTESTER'S OBJECTION NO LONGER RELATES TO THE PROPRIETY OF THE CONTRACT
AWARD ITSELF, BUT TO THE TERMS OF CONTRACT PERFORMANCE, FOR RESOLUTION
BY THE CONTRACTING AGENCY. AS WE STATED IN WHAT-MAC CONTRACTORS, INC.,
B-187782, DECEMBER 15, 1976, 76-2 CPD 500:
" * * * SINCE THE PROTESTER HAS BEEN AWARDED THE CONTRACT, ANY
QUESTION IT NOW HAS REGARDING SPECIFICATION REQUIREMENTS IS FOR
ADMINISTRATIVE RESOLUTION WITH THE CONTRACTING AGENCY."
ACCORDINGLY, THE PROTEST IS DISMISSED.
B-189975, OCTOBER 19, 1977
HEADNOTES - UNAVAILABLE
1. EMPLOYEE WHO WAS GRANTED ADVANCE OF ANNUAL LEAVE AND WAS
ERRONEOUSLY PAID FOR 57 HOURS OF ANNUAL LEAVE IN EXCESS OF THE AMOUNT
WHICH WAS ADVANCED TO HIM IS NOT ENTITLED TO HAVE HIS INDEBTEDNESS FOR
THE EXCESS PAYMENTS WAIVED SINCE HE SHOULD HAVE BEEN AWARE THAT THERE
WAS ERROR AND HE THEREFORE HAD A DUTY TO REPORT IT TO APPROPRIATE
OFFICIALS.
2. UNDER 5 U.S.C. 6302(F) AN EMPLOYEE WHO USES EXCESS ANNUAL LEAVE
CREDITED BECAUSE OF AN ADMINISTRATIVE ERROR MAY ELECT TO HAVE THE EXCESS
LEAVE CARRIED FORWARD AS A CHARGE AGAINST LATER ACCRUSING ANNUAL LEAVE.
JOSEPH T. SERE - REQUEST FOR WAIVER OF ERRONEOUS PAYMENT OF PAY:
THIS DECISION IS IN RESPONSE TO AN APPEAL FROM A DENIAL OF OUR CLAIMS
DIVISION OF A REQUEST FOR WAIVER OF AN ERRONEOUS PAYMENT MADE TO MR.
JOSEPH T. SERE, AN EMPLOYEE OF THE OFFICE OF EDUCATION, TRAINING AND
CAREER DEVELOPMENT, DEFENSE COMMUNICATIONS AGENCY, WASHINGTON, D.C.
THE RECORD SHOWS THAT ON APRIL 24, 1975, MR. SERE REQUESTED AND WAS
SUBSEQUENTLY GRANTED AN ADVANCE OF 114 HOURS OF ANNUAL LEAVE. AS A
RESULT OF AN ADMINISTRATIVE ERROR, MR. SERE WAS PAID FOR 57 HOURS OF
ANNUAL LEAVE IN EXCESS OF THE AMOUNT OF THE HOURS OF ANNUAL LEAVE THAT
HE WOULD EARN DURING THE YEAR 1975. THESE HOURS SHOULD HAVE BEEN
CHARGED AS LEAVE WITHOUT PAY AND MR. SERE'S PAY CHECK SHOULD HAVE BEEN
ADJUSTED ACCORDINGLY. MR. SERE ARGUES THAT THE OVERPAYMENT WAS NOT A
RESULT OF ANY FAULT OR BAD FAITH ON HIS PART AND THAT THEREFORE HIS
INDEBTEDNESS TO THE GOVERNMENT SHOULD BE WAIVED UNDER 5 U.S.C. 5584.
OUR CLAIMS DIVISION, IN ITS DENIAL ON MARCH 3, 1977, OF THE REQUEST
FOR WAIVER, FOUND THAT EVEN THOUGH THERE WAS NO EVIDENCE OF BAD FAITH,
FRAUD OR MISREPRESENTATION ON THE PART OF MR. SERE, HE SHOULD HAVE BEEN
AWARE THAT HE USED ANNUAL LEAVE IN EXCESS OF THAT WHICH HAD BEEN
ADVANCED TO HIM AND IN EXCESS OF THAT WHICH HE COULD EXPECT TO ACCRUE
DURING THE YEAR OF 1975 BECAUSE HE WAS IN RECEIPT OF LEAVE AND EARNINGS
STATEMENTS DURING THE PERIOD IN WHICH THE ERRONEOUS PAYMENTS WERE MADE.
THE WAIVER OF ERRONEOUS PAYMENT OF PAY IS GOVERNED BY SECTION 5584 OF
TITLE 5, UNITED STATES CODE, WHICH PROVIDES IN PERTINENT PART AS
FOLLOWS:
"(A) A CLAIM OF THE UNITED STATES AGAINST A PERSON ARISING OUT OF AN
ERRONEOUS PAYMENT OF PAY * * * TO AN EMPLOYEE OF AN AGENCY, THE
COLLECTION OF WHICH WOULD BE AGAINST EQUITY AND GOOD CONSCIENCE AND NOT
IN THE BEST INTERESTS OF THE UNITED STATES, MAY BE WAIVED IN WHOLE OR IN
PART BY--
"(1) THE COMPTROLLER GENERAL OF THE UNITED STATES * * *
"(B) THE COMPTROLLER GENERAL * * * MAY NOT EXERCISE HIS AUTHORITY
UNDER THIS SECTION TO WAIVE ANY CLAIM--
"(1) IF, IN HIS OPINION, THERE EXISTS, IN CONNECTION WITH THE CLAIM,
AN INDICATION OF FRAUD, MISREPRESENTATION, FAULT, OR LACK OF GOOD FAITH
ON THE PART OF THE EMPLOYEE OR ANY OTHER PERSON HAVING AN INTEREST IN
OBTAINING A WAIVER OF THE CLAIM * * * ."
IN B-188181, JUNE 24, 1977, WE HELD THAT AN EMPLOYEE WHO KNEW THAT HE
WAS BEING CREDITED WITH ANNUAL LEAVE TO WHICH HE WAS NOT LEGALLY
ENTITLED AND WHO USED THIS UNEARNED LEAVE ANYWAY, WAS NOT FREE FROM
FAULT AND, THEREFORE, WAS NOT ENTITLED TO HAVE HIS INDEBTEDNESS TO THE
GOVERNMENT FOR THIS OVERPAYMENT WAIVED, EVEN THOUGH HE ATTEMPTED TO
RECTIFY THE PROBLEM ON A NUMBER OF OCCASIONS AND HAD BEEN INFORMED THAT
THE PROBLEM HAD BEEN CORRECTED WHEN, IN FACT, IT HAD NOT BEEN. WE HAVE
ALSO DENIED A WAIVER OF EXCESS PAYMENTS WHEN AN EMPLOYEE REASONABLY
SHOULD HAVE BEEN AWARE THAT THERE WAS AN ERROR IN HIS ANNUAL AND SICK
LEAVE BALANCE. IN SUCH A CASE, WE HAVE HELD THAT THE EMPLOYEE HAS A
DUTY TO REPORT THE ERROR TO APPROPRIATE OFFICIALS FOR A CORRECTION.
B-185035, JULY 12, 1976.
IN LIGHT OF THE ABOVE DECISIONS, WE ARE UNABLE TO FIND THAT MR. SERE
WAS WITHOUT FAULT IN THAT HE EITHER KNEW OR REASONABLY SHOULD HAVE KNOWN
THAT HE WAS BEING PAID FOR ANNUAL LEAVE TO WHICH HE WAS NOT LEGALLY
ENTITLED. MR. SERE ARGUES THAT HIS EARNINGS AND LEAVE STATEMENTS DID
NOT CLEARLY INDICATE THE AMOUNT OF ANNUAL LEAVE HE HAD TAKEN DURING
1975, AND THAT HE, THEREFORE, COULD NOT HAVE KNOWN THAT HE HAD USED UP
HIS ADVANCE LEAVE. IN HIS LETTER APPEALING THE DECISION OF OUR CLAIMS
DIVISION HE STATES:
"THERE WERE NUMEROUS EXAMPLES OF PAYROLL CONFUSION IN THE EARNINGS
AND LEAVE STATEMENTS. DESPITE THE APRIL ADVANCE OF 114 HOURS, MY CHECKS
IN 1975 WERE SHORTED ON SEVERAL OCCASIONS. IN MY 4/26/75 AND 5/10/75
STATEMENTS, MY PAY WAS SHORTED 15 HOURS. MY 10/11/75 CHECK WAS SHORTED
17 HOURS, AND MY 12/10/75 CHECK WAS SHORTED 24 HOURS. SUPPLEMENTAL
PAYMENTS WERE MIXED IN BETWEEN. I NOTICED THESE ERRORS ON MY EARNINGS
AND LEAVE STATEMENTS AND CONSTANTLY COMPLAINED TO THE CIVILIAN PERSONNEL
OFFICE ABOUT THEM."
ACCORDING TO THE DEFENSE COMMUNICATIONS AGENCY, THE FIRST TWO PAY
CHECKS TO WHICH MR. SERE REFERS WERE SHORT A TOTAL OF 15 HOURS BECAUSE
OF INITIAL ADJUSTMENT PROBLEMS WHICH WERE CORRECTED, AND FOR WHICH HE
WAS PAID WHEN THE PAYROLL CLERK HANDLING MR. SERE'S TIME CARDS USED THE
CODE 2/78 ON THE CARD TO INDICATE TO THE KEYPUNCH OPERATOR THAT ADVANCE
LEAVE HAD BEEN APPROVED. DURING THE PAY PERIOD ENDING OCTOBER 11, 1975,
THE CODE WAS NOT USED AND MR. SERE WAS CHARGED FOR 17 HOURS OF LEAVE
WITHOUT PAY. BY NOW, MR. SERE HAD USED UP ALL BUT 10 HOURS OF HIS
ADVANCE LEAVE AND SHOULD HAVE HAD 7 HOURS DEDUCTED FROM HIS PAY CHECK AS
LEAVE WITHOUT PAY INSTEAD OF 17 HOURS. ON MR. SERE'S OBJECTION TO THIS
REDUCTION IN PAY, THE CLERK IN THE CIVILIAN PAY SECTION WHO HANDLED HIS
TIME CARDS ATTEMPTED TO CORRECT THE SITUATION. HOWEVER, INSTEAD OF
REINSTATING 10 HOURS OF ANNUAL LEAVE, WHICH WAS THE REMAINDER OF ADVANCE
LEAVE TO WHICH MR. SERE WAS ENTITLED, THE CLERK REINSTATED ALL 17 HOURS
AND A SUPPLEMENTAL PAYMENT WAS MADE ACCORDINGLY.
AT THIS POINT, BOTH THE CLERK AND MR. SERE SHOULD HAVE BEEN AWARE
THAT MR. SERE'S ADVANCE OF ANNUAL LEAVE FOR 1975 HAD EXPIRED AND THAT
ALL SUBSEQUENT TIME AWAY FROM WORK SHOULD BE CHARGED AS LEAVE WITHOUT
PAY. FOR THE NEXT 4 PAY PERIODS, HOWEVER, THE CODE TO INDICATE ADVANCE
LEAVE WAS PLACED ON MR. SERE'S TIME CARDS AND ERRONEOUS PAYMENTS WERE
MADE FOR LEAVE THAT WAS TAKEN. BY DECEMBER OF 1975, THE CLERK REALIZED
THAT AN ERROR HAD BEEN MADE AND THAT MR. SERE HAD BEEN PAID FOR 57 HOURS
OF LEAVE MORE THAN HE WOULD EARN FOR THE REMAINDER OF THE YEAR, FOR A
TOTAL OVERPAYMENT OF $686.28. THE 24 HOURS OF LEAVE TAKEN BY MR. SERE
IN THE PAY PERIOD ENDING DECEMBER 20, 1975, WERE PROPERLY CHARGED AS
LEAVE WITHOUT PAY AND DEDUCTED FROM HIS PAYCHECK.
IN VIEW OF THE FACT THAT MR. SERE WAS ABLE TO UNDERSTAND HIS EARNINGS
AND LEAVE STATEMENTS SUFFICIENTLY TO COMPLAIN WHEN HE THOUGHT THEY WERE
INCORRECT AND BECAUSE HE SHOULD HAVE KNOWN FROM OCTOBER OF 1975, THAT
HIS ADVANCE LEAVE HAD EXPIRED, WE ARE UNABLE TO FIND MR. SERE FREE FROM
FAULT IN THIS MATTER. OUR POSITION IS SUPPORTED BY A STATEMENT MADE BY
MR. SERE'S FORMER TIMEKEEPER IN SEPTEMBER 1975, TO THE EFFECT THAT "HE
WENT OVER HIS TIME CARDS VERY CAREFULLY TO BE SURE THEY AGREED WITH HIS
RECORDS BEFORE HE WOULD INITIAL THEM." THUS, WE ARE UNABLE TO WAIVE MR.
SERE'S INDEBTEDNESS TO THE GOVERNMENT.
ORIGINALLY, MR. SERE PROPOSED TO REPAY THE EXCESS LEAVE USED BY
OFFSETTING THAT AMOUNT AGAINST THE LEAVE HE WOULD EARN IN 1976.
SUBSECTION (F) OF SECTION 6302 OF TITLE 5, UNITED STATES CODE, PROVIDES
AS FOLLOWS:
"(F) AN EMPLOYEE WHO USES EXCESS ANNUAL LEAVE CREDITED BECAUSE OF
ADMINISTRATIVE ERROR MAY ELECT TO REFUND THE AMOUNT RECEIVED FOR THE
DAYS OF EXCESS LEAVE BY LUMP-SUM OR INSTALLMENT PAYMENTS OR TO HAVE THE
EXCESS LEAVE CARRIED FORWARD AS A CHARGE AGAINST LATER-ACCRUING ANNUAL
LEAVE, UNLESS REPAYMENT IS WAIVED UNDER SECTION 5584 OF THIS TITLE."
SINCE THE OVERPAYMENT WHICH WAS MADE TO MR. SERE WAS A RESULT OF
ADMINISTRATIVE ERROR, WE CAN FIND NO REASON TO DENY MR. SERE THE OPTION
OF CARRYING THE EXCESS LEAVE FORWARD AS A CHARGE AGAINST LATER ACCRUING
ANNUAL LEAVE AS PROVIDED BY 5 U.S.C. 6302(F).
FINALLY, MR. SERE REQUESTS OUR DECISION IN ANOTHER MATTER CONCERNING
HIS REQUEST FOR 15 HOURS OF ADMINISTRATIVE LEAVE DURING "IMPASSABLE ICE
CONDITIONS" AT HIS SUBDIVISION WHICH CAUSED HIM TO BE LATE FOR WORK. HE
STATES THAT HE WAS ONLY GRANTED 2 HOURS OF ADMINISTRATIVE LEAVE. THE
FEDERAL PERSONNEL MANUAL SUPPLEMENT 990-2, BOOK 630, SUBCHAPTER S11-5,
PROVIDES THAT AGENCIES MAY EXCUSE EMPLOYEES FROM DUTY WITHOUT CHARGE TO
LEAVE AND MAY BY ADMINISTRATIVE REGULATION PLACE ANY LIMITATIONS THEY
FEEL ARE NEEDED WITH RESPECT TO ADMINISTRATIVE LEAVE. THIS MATTER IS
ENTIRELY DISCRETIONARY WITH THE INDIVIDUAL AGENCY INVOLVED.
FOR THE FOREGOING REASONS, WE HEREBY SUSTAIN THE ACTION OF OUR CLAIMS
DIVISION.
B-189977, OCTOBER 19, 1977
HEADNOTES - UNAVAILABLE
1. REQUEST FOR RECONSIDERATION FILED MORE THAN 10 WORKING DAYS AFTER
BASIS FOR RECONSIDERATION IS KNOWN IS UNTIMELY FILED.
2. ALLEGATION THAT AGENCY PROCUREMENT ACTION RESULTED IN SUBSTANTIAL
MONTARY LOSS TO GOVERNMENT DOES NOT RAISE "SIGNIFICANT ISSUE" WITHIN
MEANING OF GAO BID PROTEST PROCEDURES.
VANIR RESEARCH COMPANY - RECONSIDERATION:
VANIR RESEARCH COMPANY (VANIR) REQUESTS RECONSIDERATION OF OUR
DECISION IN VANIR RESEARCH COMPANY, B-189977, SEPTEMBER 2, 1977,
DISMISSING AS UNTIMELY ITS PROTEST AGAINST THE AWARD OF A CONTRACT UNDER
REQUEST FOR PROPOSALS NO. GS-09B-76041, ISSUED BY THE GENERAL SERVICES
ADMINISTRATION (GSA).
IN ITS REQUEST FOR RECONSIDERATION, VANIR ASSERTS THAT ITS INITIAL
PROTEST SHOULD HAVE BEEN CONSIDERED UNDER 4 C.F.R. 20.2(3)(C) (1977),
NOTWITHSTANDING ITS UNTIMELINESS, BECAUSE IT RAISES AN ISSUE SIGNIFICANT
TO PROCUREMENT PRACTICES AND PROCEDURES, THAT ISSUE BEING THAT THE
PROCUREMENT PRACTICE USED BY GSA IN AWARDING THE CONTRACT "RESULTED IN A
SUBSTANTIAL MONETARY LOSS TO THE GOVERNMENT."
OUR BID PROTEST PROCEDURES, SPECIFICALLY 4 C.F.R. 20.9(B), STATE
THAT:
"REQUEST FOR RECONSIDERATION OF A DECISION * * * SHALL BE FILED NOT
LATER THAN 10 DAYS AFTER THE BASIS FOR RECONSIDERATION IS KNOWN OR
SHOULD HAVE BEEN KNOWN, WHICHEVER IS EARLIER. THE TERM 'FILED' AS USED
IN THIS SECTION MEANS RECEIPT IN THE GENERAL ACCOUNTING OFFICE."
IN ACCORDANCE WITH THAT PROVISION, VANIR SHOULD HAVE FILED ITS
REQUEST FOR RECONSIDERATION WITHIN 10 DAYS OF ITS RECEIPT OF OUR
SEPTEMBER 2 DECISION. THE REQUEST, HOWEVER, WAS FILED IN THIS OFFICE ON
SEPTEMBER 27, 1977. IN VIEW THEREOF, THE REQUEST FOR RECONSIDERATION IS
UNTIMELY. LECTROMAGNETICS, INCORPORATED, B-186867, JANUARY 10, 1977,
77-1 CPD 16.
MOREOVER, ALTHOUGH OUR PRIOR DECISION WAS SILENT ON THIS POINT, WE
CONSIDERED BUT FOUND NO BASIS FOR VIEWING THE PROTEST AS RAISING A
SIGNIFICANT ISSUE PRIOR TO OUR DISMISSING IT INITIALLY. WE POINT OUT IN
THIS REGARD THAT "'ISSUES SIGNIFICANT TO PROCUREMENT PRACTICES OR
PROCEDURES' REFERS NOT TO THE SUM OF MONEY INVOLVED, BUT TO THE PRESENCE
OF A PRINCIPLE OF WIDESPREAD INTEREST." 52 COMP.GEN. 20, 23 (1973).
OUR DECISION OF SEPTEMBER 2, 1977 IS AFFIRMED.
B-190353, OCTOBER 19, 1977
HEADNOTES - UNAVAILABLE
QUESTION OF CONTRACTOR'S ABILITY TO OBTAIN REQUIRED COMPONENT FROM
SUPPLIER IN TIME TO COMPLY WITH CONTRACTING AGENCY'S DELIVERY SCHEDULE
RELATES TO AGENCY'S AFFIRMATIVE DETERMINATION OF FIRM'S RESPONSIBILITY
WHICH WILL NOT BE REVIEWED BY GAO.
ASTROCOM ELECTRONICS, INC.:
ASTROCOM ELECTRONICS, INC. (ASTROCOM), PROTESTS THE AWARD OF A
CONTRACT BY THE U.S. ARMY ELECTRONICS COMMAND (ARMY) TO HILTRONICS
CORPORATION (HILTRONICS), UNDER RFP NO. DAAB07-77-R-2365 FOR CORD
ASSEMBLY, ELECTRICAL, NSN 5995-00-302-7521.
ASTROCOM CONTENDS THAT HILTRONICS WILL NOT BE ABLE TO OBTAIN FROM
SUPPLIERS THE NECESSARY COMPONENTS IN TIME TO DELIVER THE ASSEMBLY AS
REQUIRED BY THE SOLICITATION. ASTROCOM CONTENDS THAT HILTRONICS DID NOT
CONTACT THE SUPPLIERS OF THE COMPONENTS PRIOR TO QUOTING AND THAT IF
HILTRONICS HAD, IT WOULD HAVE BEEN INFORMED THAT THE CONNECTOR
MANUFACTURER, NEXUS, INC., WOULD NOT BE ABLE TO DELIVER THE COMPONENT
FOR AT LEAST SIXTEEN WEEKS. THE PROTESTER BELIEVED THAT AS A PRIOR
PRODUCER IT IS THE ONLY FIRM CAPABLE OF MEETING THE DELIVERY SCHEDULE.
WHETHER A PROPOSED CONTRACTOR WILL BE ABLE TO OBTAIN THE REQUIRED
COMPONENTS FROM A MANUFACTURER IN TIME TO COMPLY WITH THE CONTRACTING
AGENCY'S DELIVERY SCHEDULE RELATES TO THE AGENCY'S DETERMINATION OF
FIRM'S RESPONSIBILITY. SEE WATKINS-JOHNSON COMPANY, B-187990, APRIL 18,
1977, 77-1 CPD 268; ERA INDUSTRIES, INC., B-187406, MAY 3, 1977, 77-1
CPD 300. AN AFFIRMATIVE DETERMINATION HAS BEEN MADE BY THE CONTRACTING
OFFICIALS. IN THE ABSENCE OF A SHOWING OF FRAUD ON PART OF THE
PROCURING OFFICIALS OR OTHER CIRCUMSTANCES NOT APPLICABLE HERE, THIS
OFFICE DOES NOT CONSIDER PROTESTS INVOLVING AN AFFIRMATIVE DETERMINATION
OF CONTRACTOR RESPONSIBILITY.
ACCORDINGLY, THE PROTEST IS DISMISSED.
B-187952, OCTOBER 18, 1977
HEADNOTES - UNAVAILABLE
1. TIMBER SALES CONTRACT INCLUDED AGREEMENT TO ALLOW THIRD-PARTY
SCALING SERVICES AT BUYER'S COST, TERMINABLE BY EITHER PARTY UPON 30
DAYS' WRITTEN NOTICE. THEREFORE, ANY THIRD-PARTY SCALING COSTS INCURRED
BEFORE EXPIRATION OF NOTICE PERIOD AFTER WRITTEN TERMINATION BY BUYER
MUST BE BORNE BY BUYER.
2. TIMBER SALES CONTRACT MAY NOT BE MODIFIED TO RETROACTIVELY
REIMBURSE BUYER IN FORM OF STUMPAGE RATE REDUCTION FOR THIRD-PARTY
SCALING COSTS ALREADY INCURRED AFTER EXPIRATION OF CONTRACT MODIFICATION
ALLOWING THIRD-PARTY SCALING AT BUYER'S EXPENSE. 36 C.F.R. 221.16(A)
(1976). HOWEVER, SINCE BUYER CONTINUED TO PROCURE SERVICES IN GOOD
FAITH AND GOVERNMENT BENEFITED THEREBY (BY BEING RELIEVED OF SCALING
RESPONSIBILITY UNDER INITIAL CONTRACT), AND BUYER'S ACTIONS HAVE BEEN
PROPERLY RATIFIED, REIMBURSEMENT ON QUANTUM MERUIT BASIS IS ALLOWED.
SWF PLYWOOD COMPANY:
THE UNITED STATES DEPARTMENT OF AGRICULTURE FOREST SERVICE (FOREST
SERVICE) HAS ASKED US TO CONSIDER THE PROPRIETY OF THE PAYMENT OF CLAIMS
BY SWF PLYWOOD COMPANY (SWF) TOTALING $13,578.42 IN THIRD-PARTY SCALING
COSTS INCURRED UNDER A CONTRACT FOR THE SALE BY THE FOREST SERVICE TO
SWF OF TIMBER IN THE KLAMATH NATIONAL FOREST.
THE ORIGINAL SALES CONTRACT PROVIDED THAT SCALING OF THE TIMBER (THE
DETERMINATION OF THE NUMBER OF BOARD FEET ACTUALLY CUT BY THE BUYER) WAS
TO BE DONE BY THE FOREST SERVICE. ON MARCH 11, 1975, THE PARTIES
EXECUTED AN AGREEMENT PROVIDING FOR SCALING BY THE NORTHERN CALIFORNIA
AND SOUTHERN OREGON LOG SCALING AND GRADING BUREAUS TO BE PAID FOR BY
SWF (THEN CAROLINA PACIFIC PLYWOOD, INC.). THE AGREEMENT DID NOT
PROVIDE FOR A REDUCTION IN STUMPAGE RATE (THE RATE PAID BY THE BUYER
UNDER ANY GIVEN CONTRACT) TO REFLECT THE SAVINGS TO THE FOREST SERVICE.
IN ADDITION, THE AGREEMENT COULD, BY ITS TERMS, BE TERMINATED BY EITHER
PARTY, IF UNSATISFACTORY FOR ANY REASON, AFTER 30 DAYS' WRITTEN NOTICE.
ON DECEMBER 4, 1975, SWF REQUESTED MODIFICATION OF ITS CONTRACT TO
ALLOW THIRD-PARTY SCALING WITH A CONCURRENT STUMPAGE RATE REDUCTION. ON
DECEMBER 15, SWF REQUESTED TERMINATION OF THE MARCH 11 AGREEMENT,
EFFECTIVE JANUARY 3, 1976. A "TEMPORARY THIRD PARTY MILL DECK SCALING"
AGREEMENT WAS ENTERED INTO BY SWF AND THE FOREST SERVICE ON JANUARY 11,
1976. IT PROVIDED THAT THIRD-PARTY SCALING WAS ACCEPTABLE AND STATED:
"ALL CONTRACTS FOR SALES * * * , NOT REQUIRING THIRD PARTY BUREAU
SCALING, WILL BE MODIFIED TO REQUIRE SUCH SCALING. APPROPRIATE STUMPAGE
ADJUSTMENTS WILL BE MADE * * * FOR EACH CONTRACT MODIFIED."
THE AGREEMENT DID NOT PROVIDE A DATE BY WHICH MODIFICATION WOULD BE
MADE, AND ACTUAL MODIFICATION DID NOT OCCUR UNTIL JULY 13, 1976. THE
FOREST SERVICE STATES THAT THE DELAY IN MODIFICATION "WAS CAUSED BY
OTHER WORK PRIORITIES IN THE KLAMATH N.F."
SWF'S CLAIMS COVER THE PERIOD FROM AUGUST 1975, WHEN FOREST SERVICE
REGIONAL DIRECTIONS FIRST PROVIDED FOR ISSUANCE OF SUCH MODIFICATIONS,
UNTIL THE DATE THE MODIFICATION WAS FINALLY ISSUED.
THE PARTIES WERE OPERATING UNDER THE MARCH 11, 1975, AGREEMENT DURING
THE PERIOD UP TO JANUARY 14, 1976, WHICH INCLUDES THE 30 DAYS' NOTICE
PERIOD AFTER SWF'S REQUEST FOR TERMINATION OF THAT AGREEMENT.
ACCORDINGLY, THERE IS NO LEGAL BASIS TO REIMBURSE SWF IN THE FORM OF
REDUCED STUMPAGE RATES FOR ANY THIRD-PARTY SCALING COSTS INCURRED DURING
THAT TIME. CAL-PACIFIC MANUFACTURING COMPANY - RECONSIDERATION,
B-187952, JUNE 30, 1977, 77-1 CPD 465; SEE 1 CORBIN ON CONTRACTS 164
(1952).
IN REGARD TO THE REMAINDER OF SWF'S CLAIMS, THE MODIFICATION ISSUED
ON JULY 13, 1976, COULD NOT PROPERLY PROVIDE SWF WITH A STUMPAGE RATE
REDUCTION TO RECOGNIZE THIRD-PARTY SCALING COSTS INCURRED PRIOR TO THAT
DATE, SINCE 36 C.F.R. 221.16(A) (1976) PROHIBITS THE RETROACTIVE
MODIFICATION OF TIMBER SALES CONTRACTS. GENE PETERS, 56 COMP.GEN. 459
(1977), 77-1 CPD 225.
HOWEVER, IN CERTAIN SITUATIONS, EVEN ABSENT A FORMALLY EXECUTED
CONTRACT OR MODIFICATION, RELIEF MAY BE FURNISHED TO A CLAIMANT FOR
SERVICES RENDERED ON A QUANTUM MERUIT BASIS (THE REASONABLE VALUE OF
WORK OR LABOR), OR FOR GOODS FURNISHED ON A QUANTUM VALEBANT BASIS (THE
REASONABLE VALUE OF GOODS SOLD AND DELIVERED). POTTER INSTRUMENT
COMPANY, B-189431, JULY 18, 1977, 77-2 CPD 35. FOR A RIGHT TO SUCH
PAYMENT TO BE RECOGNIZED, IT MUST BE SHOWN THAT THE GOVERNMENT RECEIVED
A BENEFIT, AND THAT THE CLAIMANT'S UNAUTHORIZED ACTION HAS BEEN RATIFIED
BY AUTHORIZED CONTRACTING OFFICIALS. MONITOR PRODUCTS COMPANY, INC.,
B-182437, JULY 27, 1976, 76-2 CPD 85.
HERE, AFTER THE JANUARY 14, 1976, TERMINATION OF THE MARCH 11, 1975,
AGREEMENT UNDER WHICH SWF WAS BOUND TO PAY FOR THIRD-PARTY SCALING
COSTS, THE FOREST SERVICE BECAME RESPONSIBLE FOR SCALING PURSUANT TO THE
ORIGINAL TIMBER SALES CONTRACT. DISTINGUISH CAL-PACIFIC MANUFACTURING
COMPANY - RECONSIDERATION, SUPRA, AND GENE PETERS, SUPRA. NEVERTHELESS,
SWF, WITH THE APPROVAL OF FOREST SERVICE PERSONNEL, AND IN ANTICIPATION
OF A MODIFICATION TOPROVIDE FOR THIRD-PARTY SCALING AND A REDUCED
STUMPAGE RATE AS PROMISED IN WRITING, CONTINUED TO PROCURE THIRD-PARTY
SCALING. THUS, THE GOVERNMENT CLEARLY RECEIVED A BENEFIT, I.E., RELIEF
FROM THE RESPONSIBILITY AND COST OF DOING THE SCALING ITSELF, AS A
RESULT OF SWF'S GOOD FAITH PERFORMANCE.
SINCE UNDER THE CIRCUMSTANCES THE GOVERNMENT BENEFITED FROM THE
THIRD-PARTY SCALE PROCURED BY SWF, AND SINCE THE ACCEPTANCE OF SUCH
SERVICES CONSTITUTED RATIFICATION THEREOF, THE PAYMENT OF THE AMOUNT
CLAIMED FOR THE PERIOD FROM JANUARY 14, 1976, TO JULY 13, 1976, MAY BE
ALLOWED, IF OTHERWISE PROPER. SEE MONITOR PRODUCTS COMPANY, INC.,
SUPRA.
B-188093, OCTOBER 18, 1977
HEADNOTES - UNAVAILABLE
1. EMPLOYEE WAS TRANSFERRED TO STATION AT WHICH HE WAS PERFORMING
TEMPORARY DUTY. EMPLOYEE MAY NOT BE PAID PER DIEM AT NEW STATION AFTER
NOTIFICATION OF TRANSFER DESPITE RETURN TO OLD STATION FOR WEEKEND
BECAUSE LOCATION OF PERMANENT DUTY STATION IS QUESTION OF FACT, NOT OF
ADMINISTRATIVE DESIGNATION, AND SHORT PERIOD OF RETURN TO OLD STATION
BEFORE DESIGNATED DATE OF TRANSFER DOES NOT OVERCOME FACT THAT, AFTER
RECEIVING NOTICE OF TRANSFER, EMPLOYEE PERFORMED THE MAJOR PORTION OF
HIS DUTIES AT THE NEW STATION.
2. EMPLOYEE, TRANSFERRED TO STATION AT WHICH HE WAS PERFORMING
TEMPORARY DUTY, RECEIVED SUFFICIENT NOTIFICATION OF TRANSFER BY
SELECTION LETTER SIGNED BY OFFICIAL WITH AUTHORITY TO ORDER TRANSFER.
NOTICE OF TRANSFER FOR PER DIEM PURPOSES IS SUFFICIENT WHEN IT IMPARTS
ACTUAL KNOWLEDGE TO EMPLOYEE OF POSITION AND LOCATION OF TRANSFER.
FORMAL NOTIFICATION OF TRANSFER IS NOT NECESSARY TO TERMINATE EMPLOYEE'S
PER DIEM ENTITLEMENT WHILE ON DUTY AT A LOCATION TO WHICH HE IS TO BE
TRANSFERRED. 30 COMP.GEN. 94 (1957).
THOMAS S. ROSEBURG - PER DIEM AT TEMPORARY STATION SUBSEQUENTLY MADE
PERMANENT:
BY A LETTER DATED DECEMBER 30, 1976, MS. BETTY D. GILLHAM, AN
AUTHORIZED CERTIFYING OFFICER AT THE BONNEVILLE POWER ADMINISTRATION
(BPA), DEPARTMENT OF THE INTERIOR, HAS REQUESTED OUR DECISION CONCERNING
THE PROPRIETY OF CERTAIN PAYMENTS OF PER DIEM IN LIEU OF ACTUAL
SUBSISTENCE MADE TO MR. THOMAS S. ROSEBERG, A BPA EMPLOYEE.
THE RECORD INDICATES THAT FROM JANUARY 26, 1975, THROUGH AUGUST 15,
1975, MR. ROSEBURG WAS ASSIGNED TO TEMPORARY DUTY AT LEWISTON, IDAHO.
AT THE TIME OF THE TEMPORARY DUTY ASSIGNMENT, MR. ROSEBURG WAS
HEADQUARTERED AT VANCOUVER, WASHINGTON, WITH THE BPA DIVISION OF
ENGINEERING AND CONSTRUCTION. WHILE ON TEMPORARY DUTY, HE WAS SELECTED
FOR A POSITION AT LEWISTON, WITH THE DIVISION OF OPERATION AND
MAINTENANCE, AND ON JULY 10, 1975, WAS INFORMED BY TELEPHONE OF HIS
SELECTION. THIS NOTIFICATION WAS CONFIRMED BY A SELECTION LETTER WHICH
WAS DISTRIBUTED TO ALL APPLICANTS, INCLUDING MR. ROSEBERG. THE
SELECTION LETTER, DATED JULY 10, 1975, IDENTIFIED THE POSITION AND GRADE
TO WHICH THE CLAIMANT WAS APPOINTED, INDICATED THAT TRANSPORTATION OF
HOUSEHOLD GOODS WOULD BE PAID PURSUANT TO REGULATIONS, AND SET THE
EFFECTIVE DATE OF THE TRANSFER AT AUGUST 17, 1975. MR. ROSEBERG WAS
ORDERED BY THE DIVISION OF ENGINEERING TO TRAVEL TO VANCOUVER ON AUGUST
15, 1975, TO RETURN EQUIPMENT ASSIGNED TO HIM, TO MAKE A FINAL REPORT
CONCERNING HIS WORK AT LEWISTON, AND TO MAKE PERSONAL MOVING
ARRANGEMENTS. ON AUGUST 16, 1975, HE RECEIVED A COPY OF SF-50,
NOTIFICATION OF PERSONNEL ACTION, DIRECTING HIS TRANSFER TO THE POSITION
IN LEWISTON.
ALTHOUGH MR. ROSEBURG WAS INFORMED OF HIS TRANSFER TO LEWISTON ON
JULY 10, 1975, HE CONTINUED TO RECEIVE PAYMENTS OF PER DIEM UNTIL AUGUST
15, 1975, WHEN HIS PERIOD OF TEMPORARY DUTY WAS ORIGINALLY SCHEDULED TO
END. NOTING THAT DECISIONS OF THIS OFFICE HAVE HELD THAT WHEN AN
EMPLOYEE IS PERMANENTLY TRANSFERRED TO A DUTY STATION AT WHICH HE IS
ALREADY PERFORMING TEMPORARY DUTY UNDER COMPETENT ORDERS, THE TRANSFER
IS EFFECTIVE ON THE DATE HE RECEIVES NOTICE THEREOF, THE CERTIFYING
OFFICER ASKS WHETHER, IN LIGHT OF THE ABOVE CIRCUMSTANCES, SUCH PAYMENTS
OF PER DIEM WERE PROPERLY MADE. SHE RAISES A QUESTION REGARDING
APPLICATION OF THOSE DECISIONS TO MR. ROSEBURG'S CASE INASMUCH AS THE
WORK HE PERFORMED WHILE IN LEWISTON WAS NOT THAT OF THE DIVISION OF
OPERATION AND MAINTENANCE TO WHICH HE WAS ASSIGNED ON AUGUST 18, 1975,
AND BECAUSE PRIOR TO THAT DATE HE WAS SUBJECT TO ASSIGNMENT ELSEWHERE BY
THE VANCOUVER DIVISION OF ENGINEERING AND CONSTRUCTION. IN CONNECTION
WITH THAT REQUEST FOR A DECISION, THE CERTIFYING OFFICER HAS FORWARDED A
LEGAL OPINION SUGGESTING THAT LEWISTON DID NOT BECOME MR. ROSEBURG'S
PERMANENT DUTY STATION UNTIL AUGUST 16, 1975, WHEN HE RECEIVED THE FORM
50 EFFECTING HIS TRANSFER AND THAT EARLIER FORMS OF NOTICE WERE
INEFFECTIVE IN TERMINATING HIS ENTITLEMENT TO PER DIEM WHILE AT THAT
LOCATION. THIS LEGAL CONCLUSION IS PREMISED, IN PART, ON OUR HOLDING IN
51 COMP.GEN. 10 (1971), AND THE FACT OF MR. ROSEBURG'S RETURN TO
VANCOUVER ON AUGUST 15.
THE RULE PROHIBITING PAYMENT OF PER DIEM TO AN EMPLOYEE WHO RECEIVES
NOTICE OF TRANSFER TO A PLACE WHERE HE IS ON TEMPORARY DUTY DERIVES FROM
THE STATUTORY PROVISION FOR PAYMENT OF PER DIEM TO EMPLOYEES ON OFFICIAL
TRAVEL AWAY FROM THEIR POSTS OF DUTY CONTAINED IN 5 U.S.C. 5702(A)
(1970), AS AMENDED BY PUBLIC LAW 94-22, MAY 19, 1975, 89 STAT. 84. THIS
AUTHORITY HAS BEEN INTERPRETED BY THE IMPLEMENTING PROVISIONS OF
PARAGRAPH 1-7.6A OF THE FEDERAL TRAVEL REGULATIONS (FPMR 101-7, MARY
1973), TO PROHIBIT AN EMPLOYEE FROM RECEIVING PER DIEM AT HIS PERMANENT
DUTY STATION.
THE LOCATION OF AN EMPLOYEE'S PERMANENT DUTY STATION FOR TRAVEL AND
PER DIEM PURPOSES HAS CONSISTENTLY BEEN HELD BY THIS OFFICE TO BE THE
PLACE AT WHICH THE EMPLOYEE PERFORMS THE MAJOR PORTION OF HIS DUTIES AND
WHERE HE IS THEREFORE EXPECTED TO SPEND THE GREATER PART OF HIS TIME.
32 COMP.GEN. 87 (1952). ADMINISTRATIVE OFFICIALS WHO HAVE THE AUTHORITY
TO DESIGNATE POSTS OF DUTY FOR GOVERNMENT EMPLOYEES DO NOT HAVE THE
DISCRETION TO DESIGNATE A PLACE OTHER THAN THE LOCATION WHERE HE
ACTUALLY PERFORMS THE GREATER PART OF HIS DUTIES, FOR THE PURPOSE OF
GIVING THE EMPLOYEE A GREATER SUBSISTENCE ALLOWANCE. THUS, IN
DETERMINING THE EMPLOYEE'S ACTUAL POST OF DUTY, EACH CASE IS TO BE
DECIDED ON ITS OWN FACTS AND CIRCUMSTANCES, INCLUDING SUCH FACTORS AS
THE NATURE OF THE ASSIGNMENT, THE REQUIRED DUTIES, AND THE LOCALE IN
WHICH THEY ARE TO BE PERFORMED. 49 COMP.GEN. 145 (1969); 32 ID. 87
(1952); 25 ID. 136 (1945); 10 ID. (1931).
THE GENERAL RULE IS THAT A TRANSFER IS EFFECTIVE ON THE DATE THE
INDIVIDUAL ARRIVES AT THE NEW STATION. BASED ON THE PRINCIPLES
DISCUSSED ABOVE WE HAVE RECOGNIZED AN EXCEPTION TO THAT RULE IN THE CASE
WHERE AN EMPLOYEE IS TRANSFERRED TO A PLACE AT WHICH HE IS ALREADY ON
DUTY. IN SUCH CIRCUMSTANCES, THE TRANSFER IS EFFECTIVE ON THE DATE THE
EMPLOYEE RECEIVES NOTICE OF THE INTENDED TRANSFER AND HE MAY NOT
THEREAFTER BE PAID PER DIEM WHILE AT THAT LOCATION. 23 COMP.GEN. 342
(1943). THIS RULE IS BASED ON THE ASSUMPTION THAT THE EMPLOYEE WILL BE
EXPECTED TO SPEND THE GREATER PART OF HIS TIME AND PERFORM THE GREATER
PORTION OF HIS DUTIES AT THE NEW PERMANENT DUTY STATION AFTER RECEIPT OF
THE NOTICE OF TRANSFER.
THE DETERMINATION OF AN EMPLOYEE'S PERMANENT DUTY STATION FOR
PURPOSES OF ESTABLISHING PER DIEM ENTITLEMENT IS A QUESTION OF THE
LOCATION AT WHICH HE PERFORMS THE GREATER PART OF HIS DUTIES AND IS NOT
A MATTER OF WHAT THOSE PARTICULAR DUTIES MIGHT BE. THUS, THE FACT THAT
MR. ROSEBURG WAS ATTACHED TO THE DIVISION OF ENGINEERING AND
CONSTRUCTION WHILE IN LEWISTON PRIOR TO AUGUST 18 AND THAT HE WAS NOT
PERFORMING UNDER THE DIRECTION OF THE DIVISION OF OPERATION AND
MAINTENANCE TO WHICH HE WAS LATER ASSIGNED DOES NOT ENTITLE HIM TO PER
DIEM WHILE IN LEWISTON SUBSEQUENT TO NOTIFICATION OF THE IMPENDING
TRANSFER. NEITHER DOES THE FACT THAT THE DIVISION OF ENGINEERING AND
CONSTRUCTION COULD HAVE ASSIGNED MR. ROSEBURG TO DUTY ELSEWHERE THEN
LEWISTON HAVE ANY BEARING ON THE QUESTION OF PER DIEM ENTITLEMENT SINCE
HE WAS NOT IN FACT ASSIGNED TO DUTY AT A LOCATION OTHER THAN LEWISTON.
ONE INSTANCE IN WHICH WE HAVE RECOGNIZED THAT NOTICE OF TRANSFER TO
THE LOCATION AT WHICH AN EMPLOYEE IS ASSIGNED TO TEMPORARY DUTY DOES NOT
PRECLUDE PAYMENT TO HIM OF PER DIEM WHILE AT THAT LOCATION IS THE CASE
IN WHICH AN EMPLOYEE RETURNS TO HIS PRIOR DUTY STATION TO PERFORM
SUBSTANTIAL DUTY BEFORE THE SCHEDULED TRANSFER DATE. THUS, IN 51
COMP.GEN. 10, SUPRA, WE RECOGNIZED THAT AN EMPLOYEE WHO WAS NOTIFIED OF
TRANSFER TO BOSTON WHILE ON DUTY THERE COULD BE PAID PER DIEM INCIDENT
TO THAT TEMPORARY ASSIGNMENT WHERE HE WAS EXPECTED TO RETURN TO CHICAGO,
HIS PERMANENT STATION, FOR 2 TO 3 WEEKS BEFORE THE DATE ON WHICH HE WAS
TO REPORT FOR PERMANENT DUTY TO BOSTON. IN THAT CASE WE HELD THAT THE
EMPLOYEE'S PER DIEM ENTITLEMENT DID NOT TERMINATE UNTIL HE HAD FINISHED
HIS ASSIGNMENT IN CHICAGO AND RETURNED TO BOSTON. THIS CASE IS CITED IN
THE LEGAL ANALYSIS PROVIDED BY THE CERTIFYING OFFICER IN SUPPORT OF THE
VIEW THAT MR. ROSEBURG IS ENTITLED TO PER DIEM WHILE IN LEWISTON PRIOR
TO AUGUST 15 IN VIEW OF HIS RETURN TO VANCOUVER FOR THE WEEKEND OF
AUGUST 16 AND 17. THE EXCEPTION RECOGNIZED IN 51 COMP.GEN. 10 APPLIES
WHERE THE EMPLOYEE WHO IS NOTIFIED OF HIS TRANSFER TO A PLACE AT WHICH
HE IS ON TEMPORARY DUTY IS THEREAFTER EXPECTED TO PERFORM SUBSTANTIAL
DUTY AT HIS PRIOR DUTY STATION. B-176857, DECEMBER 22, 1972; B-139223,
JUNE 15, 1959. MR. ROSEBURG IN FACT RETURNED TO VANCOUVER ON FRIDAY
AFTERNOON, AUGUST 15, AND REPORTED FOR DUTY IN LEWISTON ON MONDAY,
AUGUST 18. IN VIEW OF THE BREVITY OF HIS STAY AND THE FACT THAT ITS
PURPOSE APPEARS TO HAVE BEEN IN LARGE PART TO PERMIT HIM TO MAKE MOVING
ARRANGEMENTS, WE CANNOT CONCLUDE THAT MR. ROSEBURG PERFORMED SUBSTANTIAL
DUTY AT HIS PRIOR DUTY STATION AFTER HAVING BEEN NOTIFIED WHILE IN
LEWISTON OF HIS IMMINENT TRANSFER TO THAT LOCATION.
IN THE PRESENT CASE, MR. ROSEBURG WAS NOTIFIED BY TELEPHONE ON JULY
10, 1975, REGARDING HIS TRANSFER TO LEWISTON. THIS NOTIFICATION WAS
CONFIRMED IN WRITING BY THE SELECTION LETTER DATED JULY 10. THE
CERTIFYING OFFICER STATES THAT FOR MANY YEARS BPA HAS USED THE SELECTION
LETTER AS A MEANS OF NOTIFYING EMPLOYEES FOR THEIR SELECTION FOR
POSITIONS AND FOR NOTIFYING ALL OTHER APPLICANTS OF THE SELECTION. THE
LEGAL OPINION FORWARDED WITH THE CERTIFYING OFFICER'S DECISION REQUEST
SUGGESTS THAT NEITHER OF THESE FORMS OF NOTICE SERVED TO TERMINATE MR.
ROSEBURG'S PER DIEM ENTITLEMENT WHILE ON DUTY AT LEWISTON, BUT THAT HE
WAS GIVEN APPROPRIATE NOTICE ONLY UPON RECEIPT ON AUGUST 16 OF THE
STANDARD FORM 50 EFFECTING HIS PERMANENT CHANGE OF STATION FROM
VANCOUVER TO LEWISTON.
WITH RESPECT TO THE FORM OF NOTICE THAT WILL SERVE TO TERMINATE AN
EMPLOYEE'S PER DIEM ENTITLEMENT WHILE ON TEMPORARY DUTY AT A LOCATION TO
WHICH HE IS TO BE TRANSFERRED, WE HELD IN 30 COMP.GEN. 94 (1950) AS
FOLLOWS:
"IN THAT CONNECTION, YOU ARE ADVISED THAT THE ABOVE RULE (PROHIBITING
PER DIEM AT A TEMPORARY DUTY STATION TO WHICH THE EMPLOYEE HAS BEEN
TRANSFERRED) HAS NEVER BEEN CONFINED TO THE DATE OF THE EMPLOYEE'S
RECEIPT OF A FORMAL OR WRITTEN NOTICE OF THE CHANGE OF HIS OFFICIAL
STATION, IT BEING SUFFICIENT THAT THE EMPLOYEE ACTUALLY KNEW OFFICIALLY
THAT HIS TEMPORARY PLACE OF DUTY WAS TO BECOME HIS PERMANENT DUTY
STATION. HOWEVER, THE NOTICE TO THE EMPLOYEE NOT ONLY MUST BE
COMMUNICATED TO HIM BY PROPER AUTHORITY BUT SHOULD BE DEFINITE AS TO THE
ACTION BEING TAKEN SO AS TO LEAVE NO DOUBT IN THE EMPLOYEE'S MIND WITH
RESPECT THERETO."
IN MR. ROSEBURG'S CASE SOME QUESTION IS RAISED AS TO WHETHER THE
INDIVIDUAL WHO TALKED WITH HIM ON JULY 10 REGARDING HIS TRANSFER WAS A
PROPER AUTHORITY WITHIN THE MEANING OF THE ABOVE-QUOTED RULE. HOWEVER,
ONE OF THE TWO INDIVIDUALS WHO SIGNED THE SELECTION LETTER THAT WAS
MAILED TO HIM ON THAT SAME DATE HAD THE AUTHORITY TO ORDER HIS TRANSFER
AND IN FACT SIGNED THE STANDARD FORM 50. THE SELECTION LETTER ITSELF IS
CLEAR AND PRECISE AS TO THE FACT OF MR. ROSEBURG'S SELECTION FOR
TRANSFER TO THE POSITION IN LEWISTON EFFECTIVE AUGUST 17. THUS IT
APPEARS THAT MR. ROSEBURG RECEIVED NOTICE OF HIS INTENDED TRANSFER TO
LEWISTON UPON RECEIPT IN DUE COURSE OF THE JULY 10 SELECTION LETTER.
SINCE HE WAS THEN ON TEMPORARY DUTY ASSIGNMENT IN LEWISTON, AND SINCE
HIS PRINCIPAL DUTIES WERE THEREAFTER PERFORMED IN LEWISTON, HE WAS NOT
ENTITLED TO PER DIEM WHILE SO ASSIGNED.
AS INDICATED ABOVE, WHEN AN EMPLOYEE IS TRANSFERRED TO A PLACE AT
WHICH HE IS ALREADY ON DUTY, THE GENERAL RULE FOR PER DIEM PURPOSES IS
THAT THE TRANSFER IS EFFECTIVE ON THE DATE THE EMPLOYEE RECEIVES NOTICE
OF THE INTENDED TRANSFER, AND HE MAY NOT THEREAFTER BE PAID PER DIEM
WHILE AT THAT LOCATION. IN ORDER TO ELIMINATE ANY MISUNDERSTANDING BY
AN EMPLOYEE AS TO HIS PER DIEM RIGHTS, HIS AGENCY AT THE TIME IT
NOTIFIES THE EMPLOYEE OF HIS TRANSFER, SHOULD ADVISE HIM THAT
NOTIFICATION OPERATES TO TERMINATE HIS PER DIEM ENTITLEMENT. FURTHER,
IN ORDER TO REDUCE OR ELIMINATE THE PERIOD OF TIME DURING WHICH AN
EMPLOYEE WHO IS TRANSFERRED TO A STATION WHERE HE IS ALREADY ON DUTY IS
NOT ABLE TO FULLY AVAIL HIMSELF OF RELOCATION BENEFITS TO WHICH HE MAY
BE ENTITLED, THE EMPLOYING AGENCY SHOULD, CONTEMPORANEOUSLY WITH OR
SHORTLY AFTER GIVING NOTICE OF THE TRANSFER, ISSUE TO THE EMPLOYEE A
TRAVEL ORDER AUTHORIZING TRANSFER EXPENSES. AS SOON AS POSSIBLE
THEREAFTER, THE EMPLOYING AGENCY SHOULD ALSO AUTHORIZE ROUND-TRIP TRAVEL
EXPENSES FOR THE EMPLOYEE BETWEEN THE OLD AND NEW STATIONS FOR THE
PURPOSE OF MAKING NECESSARY ARRANGEMENTS IN PREPARATION FOR THE TRANSER.
SEE NOAA SHIP DISCOVERER, B-167022, JULY 12, 1976.
FOR THE REASONS DETAILED ABOVE, APPROPRIATE ACTION SHOULD BE TAKEN TO
RECOVER PER DIEM ERRONEOUSLY PAID TO MR. ROSEBURG WHILE ON DUTY IN
LEWISTON AFTER HIS RECEIPT OF THE JULY 10 SELECTION LETTER.
B-188571, OCTOBER 18, 1977
HEADNOTES - UNAVAILABLE
WHERE SBA DECLINES TO REVIEW CONTRACTING OFFICER'S DETERMINATION OF
NONRESPONSIBILITY AS TO OFFEROR'S INTEGRITY BECAUSE OF FBI INVESTIGATION
AND WHERE MATTER BECOMES SUBJECT OF CRIMINAL INDICTMENT, IT IS
INAPPROPRIATE FOR GAO TO REVIEW THE CONTRACTING OFFICER'S DETERMINATION.
CONSOLIDATED SERVICE, INC.:
CONSOLIDATED SERVICE, INC. (CONSOLIDATED), A SMALL BUSINESS CONCERN,
PROTESTS THE AWARD ON FEBRUARY 28, 1977, OF CONTRACT NO.
N00612-76-D-0061, FOR SHIP OVERHAUL SERVICES BY THE NAVAL SUPPLY CENTER,
CHARLESTON, SOUTH CAROLINA, TO THE JONATHAN CORPORATION. CONSOLIDATED
WAS THE LOW OFFEROR BUT WAS DETERMINED ON JANUARY 31, 1977 BY THE
CONTRACTING OFFICER UNDER SECTION 1-903.1(IV) OF THE ARMED SERVICES
PROCUREMENT REGULATION (ASPR) (1976 ED.) TO BE NONRESPONSIBLE DUE TO A
LACK OF INTEGRITY IN THE PERFORMANCE OF CONTRACTS N00612-75-D-0013 AND
N00612-76-D-0061, ALSO AWARDED BY CHARLESTON NAVAL SUPPLY CENTER. THIS
DETERMINATION WAS BASED ON A PRELIMINARY AUDIT REPORT BY THE DEFENSE
CONTRACT AUDIT AGENCY (DCAA) WHICH INDICATED THAT CONSOLIDATED DID NOT
PAY THE DEPARTMENT OF LABOR ESTABLISHED WAGE RATES, BILLED OVERTIME AND
HOLIDAY HOURS INCORRECTLY, BILLED THE GOVERNMENT FOR PER DIEM AND
MILEAGE EXPENSES AT RATES HIGHER THAN ACTUAL PAYMENTS, DID NOT REQUIRE
ITS EMPLOYEES TO PREPARE TRAVEL EXPENSE REPORTS, AND IMPROPERLY ADDED A
MATERIAL HANDLING FACTOR TO MATERIAL PURCHASED FOR THE CONTRACTS. THESE
MATTERS WERE ALSO THE SUBJECT OF A FINAL DCAA REPORT AND AN
INVESTIGATION BY THE FEDERAL BUREAU OF INVESTIGATION (FBI). THE FBI
INVESTIGATION, WE ARE INFORMED, RESULTED ON JUNE 30, 1977 IN AN
INDICTMENT FOR FRAUD OF VARIOUS CONSOLIDATED OFFICIALS.
AFTER THE CONTRACTING OFFICER MADE THE ABOVE DETERMINATION AND IN
ACCORDANCE WITH ASPR SEC. 1-705.4(C)(IV) (1976 ED.), THE APPROPRIATE
SMALL BUSINESS ADMINISTRATION ESBA) REGIONAL OFFICE WAS FURNISHED
DOCUMENTATION RELEVANT TO THE CONTRACTING OFFICER'S DETERMINATION THAT
THE FIRM WAS NOT RESPONSIBLE FOR REASONS OTHER THAN DEFICIENCIES IN
CAPACITY AND CREDIT. HOWVER, THE SBA DECLINED TO CONSIDER THE MATTER
BECAUSE OF THE FBI INVESTIGATION.
COUNSEL FOR CONSOLIDATED DISPUTES THE NAVY'S NONRESPONSIBILITY
DETERMINATION PRIMARILY ON THE GROUNDS THAT THE ISSUES RAISED BY THE
DCAA REPORT DO NOT SHOW THAT CONSOLIDATED WILFULLY VIOLATED THE TERMS OF
ITS PREVIOUS CONTRACTS. IN THIS REGARD COUNSEL HAS SUBMITTED ITS
POSITION REGARDING EACH ISSUE RAISED IN THE REPORT AND SUBSEQUENT
DETERMINATION.
OUR OFFICE HAS HELD THAT THE PROCEDURES OF SBA PROVIDE AN EFFECTIVE
PROCESS FOR REVIEWING AGENCY DETERMINATIONS OF NONRESPONSIBILITY
REGARDING A BIDDER'S TENACITY, PERSEVERANCE AND INTEGRITY AND, THEREFORE
WE WILL NOT UNDERTAKE TO REVIEW SUCH A DETERMINATION BY THE CONTRACTING
OFFICER UNLESS THERE IS A SHOWING OF BAD FAITH OR FRAUD ON THE PART OF
THE ADMINISTRATIVE OFFICIALS INVOLVED. BUILDING MAINTENANCE
SPECIALISTS, INC., 54 COMP.GEN. 703 (1975), 75-1 CPD 122.
IN VIEW OF THE FACT THAT THE SBA HAS REFUSED TO CONSIDER THE MATTER
BECAUSE THE ISSUES RAISED WERE THE SUBJECT OF AN FBI INVESTIGATION AND
SINCE WE HAVE BEEN INFORMED BY COUNSEL THAT THE PENDING INDICTMENT
RELATES TO A NUMBER OF THE CONTRACT VIOLATIONS FOUND IN THE DCAA REPORT
AND RELIED UPON BY THE CONTRACTING OFFICER IN REACHING HIS
DETERMINATION, WE DO NOT BELIEVE IT WOULD BE APPROPRIATE FOR THIS OFFICE
TO REVIEW THE MATTER. TURNER & FRALEY, INC., AND HOUGH & SCHMIDT
CONSTRUCTION CO., INC. (A JOINT VENTURE), B-183308, APRIL 30, 1975, 7501
CPD 271.
ACCORDINGLY, THE PROTEST IS DISMISSED.
B-188650, OCTOBER 18, 1977
HEADNOTES - UNAVAILABLE
EMPLOYEE, UPON LEARNING OF IMPENDING TRANSFER, TOOK SHORT-TERM LEASE
RATHER THAN 12-MONTH LEASE ON NEW APARTMENT FOR 3 MONTHS PRIOR TO
TRANSFER. CLAIM FOR TEMPORARY QUARTERS ALLOWANCE AT OLD DUTY STATION IS
DENIED SINCE EMPLOYEE DID NOT VACATE QUARTERS IN WHICH HE WAS RESIDING
AT TIME TRANSFER WAS AUTHORIZED AS REQUIRED UNDER FEDERAL TRAVEL
REGULATIONS.
RICHARD BOCKOVER - CLAIM FOR TEMPORARY QUARTERS ALLOWANCE:
THIS ACTION IS IN RESPONSE TO A REQUEST FOR AN ADVANCE DECISION FROM
JOHN R. BRESLIN, AN AUTHORIZED CERTIFYING OFFICER OF THE ADMINISTRATIVE
OFFICE OF THE UNITED STATES COURTS, CONCERNING THE CLAIM OF MR. RICHARD
BOCKOVER, A UNITED STATES PROBATION OFFICER, FOR TEMPORARY QUARTERS
ALLOWANCE IN CONNECTION WITH A CHANGE OF OFFICIAL DUTY STATIONS.
THE RECORD INDICATES THAT ON JUNE 17, 1976, MR. BOCKOVER WAS
AUTHORIZED REIMBURSEMENT FOR RELOCATION EXPENSES INCURRED IN HIS
TRANSFER FROM CHICAGO, ILLINOIS, TO FREEPORT, ILLINOIS, EFFECTIVE JULY
6, 1976. IT APPEARS, HOWEVER, THAT MR. BOCKOVER MOVED HIS RESIDENCE ON
MARCH 27, 1976, FROM DOWNERS GROVE, ILLINOIS, TO WOODRIDGE, ILLINOIS.
THE ADMINISTRATIVE REPORT STATES THAT UPON HIS LEARNING OF THE IMPENDING
TRANSFER IN LATE MARCH, MR. BOCKOVER HAD ATTEMPTED TO EXTEND HIS LEASE
AT THE RESIDENCE AT DOWNERS GROVE, BUT, FAILING THAT, HE ENTERED INTO A
3-MONTH LEASE AT THE RESIDENCE IN WOODRIDGE FOR WHICH HE PAID A $25
PREMIUM PER MONTH. MR. BOCKOVER MOVED AGAIN ON JULY 1, 1976, TO HIS
NEW DUTY STATION, AND HE HAS CLAIMED TEMPORARY QUARTERS ALLOWANCE FOR
THE 30-DAY PERIOD PRECEDING HIS MOVE FROM WOODRIDGE TO HIS NEW DUTY
STATION. HIS CLAIM WAS DENIED ADMINISTRATIVELY SINCE, IN THE VIEW OF
THE CERTIFYING OFFICER, MR. BOCKOVER HAD INTENDED TO MOVE TO THE
WOODRIDGE RESIDENCE PRIOR TO NOTIFICATION OF THE TRANSFER.
UPON FILING A RECLAIM VOUCHER, MR. BOCKOVER STATES THAT HE TOOK A
SHORT-TERM LEASE AT THE WOODRIDGE RESIDENCE " * * * TO SAVE THE
GOVERNMENT FROM PAYING NINE MONTHS RENT * * * ", AND HE ACKNOWLEDGES
THAT THE $25 PREMIUM FOR THE SHORT-TERM LEASE DOES NOT QUALIFY AS AN
EXPENSE IN THE SETTLEMENT OF AN UNEXPIRED LEASE UNDER THE FEDERAL TRAVEL
REGULATIONS.
THE AUTHORITY FOR REIMBURSEMENT OF SUBSISTENCE EXPENSES WHILE
OCCUPYING TEMPORARY QUARTERS IS CONTAINED IN 5 U.S.C. 5724A(A)(3)
(1970), AND THE IMPLEMENTING REGULATIONS, THE FEDERAL TRAVEL REGULATIONS
(FTR) (FPMR 101-7) (MAY 1973). THE PERTINENT PROVISIONS OF PARA. 2-5.2
OF THE FTR PROVIDE AS FOLLOWS:
"C. WHAT CONSTITUTES TEMPORARY QUARTERS. THE TERM 'TEMPORARY
QUARTERS' REFERS TO ANY LODGING OBTAINED FROM PRIVATE OR COMMERCIAL
SOURCES TO BE OCCUPIED TEMPORARILY BY THE EMPLOYEE OR MEMBERS OF HIS
IMMEDIATE FAMILY WHO HAVE VACATED THE RESIDENCE QUARTERS IN WHICH THEY
WERE RESIDING AT THE TIME THE TRANSFER WAS AUTHORIZED.
"E. TIME TO BEGIN OCCUPANCY. THE USE OF TEMPORARY QUARTERS FOR
SUBSISTENCE EXPENSE PURPOSES UNDER THESE PROVISIONS MAY BEGIN AS SOON AS
THE EMPLOYEE'S TRANSFER HAS BEEN AUTHORIZED AND THE WRITTEN AGREEMENT
REQUIRED IN 2-1.5A(1) HAS BEEN SIGNED. * * * "
IT IS CLEAR FROM THE ABOVE-CITED PROVISIONS OF THE FTR THAT MR.
BOCKOVER IS NOT ELIGIBLE FOR TEMPORARY QUARTERS ALLOWANCE WHILE RESIDING
IN WOODRIDGE SINCE THE RECORD INDICATES THAT HIS TRANSFER WAS NOT
AUTHORIZED UNTIL MAY 27, 1976, AND HE DID NOT SIGN THE SERVICE AGREEMENT
REQUIRED UNDER FTR PARA. 2-1.5A(1)(A) UNTIL JULY 6, 1976. IN ADDITION
WE NOTE THAT MR. BOCKOVER DID NOT VACATE HIS PERMANENT QUARTERS AT HIS
OLD DUTY STATION IN WHICH HE WAS RESIDING AT THE TIME THE TRANSFER WAS
AUTHORIZED. MR. BOCKOVER HAS, IN ESSENCE, INCURRED AN ADDITIONAL
EXPENSE OF $75 ($25 PREMIUM FOR 3 MONTHS) IN AN EFFORT TO REDUCE THE
GOVERNMENT'S POSSIBLE LIABILITY FOR LEASE TERMINATION EXPENSES. SEE FTR
PARA. 2-6.2H. UNFORTUNATELY, THERE IS NO AUTHORITY TO REIMBURSE MR.
BOCKOVER FOR THIS ADDITIONAL EXPENSE.
ACCORDINGLY, THE VOUCHER MAY NOT BE CERTIFIED FOR PAYMENT.
B-188917, OCTOBER 18, 1977
HEADNOTES - UNAVAILABLE
1. PROTEST ASSERTING LOW BIDDER LACKS INTERSTATE COMMERCE COMMISSION
OPERATING AUTHORITY TO PERFORM CONTRACT UNDER IFB WHICH IS SILENT ON
REQUIRED OPERATING AUTHORITY ESSENTIALLY QUESTIONS AGENCY'S AFFIRMATIVE
DETERMINATION OF BIDDER'S RESPONSIBILITY AND IS NOT FOR CONSIDERATION BY
GAO ABSENT SHOWING OF FRAUD OR MISAPPLICATION OF DEFINITIVE
RESPONSIBILITY CRITERIA.
2. ICC OPERATING AUTHORITY IS NOT DEFINITIVE RESPONSIBILITY
CRITERION WHERE SOLICITATION IS SILENT AS TO LICENSES REQUIRED FOR
PERFORMANCE OF CONTRACT.
3. SMALL BUSINESS ADMINISTRATION DETERMINATION THAT BIDDER
SUBCONTRACTING 60 PERCENT OF CONTRACT WORK IS SMALL BUSINESS FOR PURPOSE
OF THE PROCUREMENT IS, BY LAW, CONCLUSIVE DECISION NOT SUBJECT TO REVIEW
BY GAO.
CHIPMAN VAN & STORAGE, INC.:
CHIPMAN MAYFLOWER, CHIPMAN VAN & STORAGE, INC. (CHIPMAN) HAS
PROTESTED THE AWARD OF CONTRACT NO. N00228-77-D-4300 BY THE DEPARTMENT
OF THE NAVY (NAVY), NAVAL SUPPLY CENTER, OAKLAND, CALIFORNIA, TO BAY
AREA CARTAGE COMPANY (BAC) FOR PREPARING AND MOVING HOUSEHOLD GOODS OF
DEPARTMENT OF DEFENSE PERSONNEL LOCATED IN NORTHERN CALIFORNIA DURING
CALENDAR YEAR 1977, RESULTING FROM INVITATION FOR BIDS (IFB) NO.
N00228-77-B-4300.
THE NAVY ISSUED THE IFB, A TOTAL SMALL BUSINESS SET-ASIDE ON NOVEMBER
3, 1976. TEN BIDS WERE RECEIVED AT BID OPENING ON DECEMBER 13, 1976.
LETTERS FROM BAC AND U. C. MOVING SERVICE (UC), DATED NOVEMBER 22,
1976, WERE SUBMITTED WITH BAC'S BID AND NOTED BY THE NAVY AT THE TIME OF
THE BID OPENING. BAC'S LETTER STATED, IN PERTINENT PART, AS FOLLOWS:
"IN PREPARING THE BID SUBMITTED ON BEHALF OF BAY AREA CARTAGE
COMPANY, WE DETERMINED THAT THE SERVICES TO BE PERFORMED WOULD, AT LEAST
IN PART, BE CONTRACTED TO U.C. MOVING SERVICES . . . "
SIMILARLY, UC'S LETTER ADVISED THAT THE FIRM WOULD NOT BID, BUT THAT
US HAD ENTERED A SUBCONTRACT WITH BAC. BAC WAS THE APPARENT LOW BIDDER
ON A PORTION OF THE REQUIREMENTS.
ON DECEMBER 16, 1976, A PREAWARD SURVEY OF BAC'S FACILITIES WAS
REQUESTED, PURSUANT TO ARMED SERVICES PROCUREMENT REGULATION (ASPR)
SECS. 1-905.4(B) AND 1-906 (1976 ED.), WITH PARTICULAR EMPHASIS ON
ASCERTAINING THE PORTION OF WORK TO BE SUBCONTRACTED AND VERIFYING BAC'S
INTERSTATE COMMERCE COMMISSION (ICC) AND PUBLIC UTILITIES COMMISSION
(PUC) OPERATING AUTHORITY. THE SURVEY, CONDUCTED ON DECEMBER 29, 1976,
DETERMINED THAT 60 PERCENT OF THE CONTRACT WORK (I.E., THE PRODUCTION
EFFORT) WOULD BE SUBCONTRACTED TO UC, AND THAT VALID OPERATING PERMITS
EXISTED. THE SURVEY CONCLUDED THAT BAC WAS CAPABLE AND HAD THE
NECESSARY PERSONNEL AND EQUIPMENT TO SATISFACTORILY PERFORM THE
CONTRACT.
THE NAVY'S CONTRACTING OFFICER REQUESTED A SIZE STATUS DETERMINATION
REGARDING BAC FROM THE SMALL BUSINESS ADMINISTRATION (SBA) BY LETTER OF
DECEMBER 22, 1976, IN ACCORDANCE WITH ASPR SEC. 1-703(B)(3) (1976 ED.).
BY LETTER DATED JANUARY 14, 1977, SBA RESPONDED IN PERTINENT PART AS
FOLLOWS:
"IT IS OUR DETERMINATION THAT BAY AREA CARTAGE IS A SMALL BUSINESS
FOR THE PENDING PROCUREMENT, AND IS NOT AFFILIATED WITH U. C. MOVING
SERVICES OR GLOBAL VAN LINES, INC. (UC'S PARENT COMPANY)."
ON THE BASIS OF THE PREAWARD SURVEY AND SBA'S DETERMINATION, THE NAVY
DETERMINED THAT BAC WAS A RESPONSIBLE BIDDER, ELIGIBLE AS A SMALL
BUSINESS, AND AWARDED BAC A PRIMARY CONTRACT FOR AREA I OF SCHEDULES I
AND II (OUTBOUND AND INBOUND SERVICES) AND A SECONDARY CONTRACT FOR AREA
II OF SCHEDULES II AND III (INTRA- AND INTER-AREA SERVICES) ON JANUARY
18, 1977.
CHIPMAN FILED ITS PROTEST WITH OUR OFFICE ON APRIL 22, 1977. THE
PROTESTER ASSERTS THAT THE AWARD TO BAC WAS MADE IN VIOLATION OF ICC
RULES AND REGULATIONS, CITING THE COMMISSION'S RECENT DECISION IN BUD'S
MOVING & STORAGE, INC., PETITION FOR DECLARATORY ORDER, 126 M.C.C. 56
(1977), AS REQUIRING THAT BAC HOLD AN ICC MOTOR CARRIER CERTIFICATION IN
ITS OWN NAME. ALTHOUGH THE BUD'S CASE WAS DECIDED ON NOVEMBER 11, 1976,
THE DECISION WAS NOT SERVED (I.E., RELEASED TO THE PUBLIC) UNTIL JANUARY
14, 1977. NEITHER BAC NOR THE NAVY WAS ON NOTICE OF THE DECISION UNTIL
AFTER THE IFB WAS ISSUED AND THE BIDS WERE OPENED. ON FEBRUARY 9, 1977,
CHIPMAN WAS SENT A LETTER FROM THE ICC RECOMMENDING THAT THE CONTRACTOR
TAKE THE NECESSARY STEPS TO OBTAIN ITS OWN REQUISITE OPERATING
AUTHORITY. WE HAVE ASCERTAINED INFORMALLY THAT BAC APPLIED FOR ICC
OPERATING AUTHORITY ON MARCH 11, 1977, AND WAS GRANTED TEMPORARY
AUTHORITY FOR 180 DAYS, BEGINNING ON JUNE 26, 1977.
CHIPMAN'S PROTEST ESSENTIALLY RAISES THE ISSUE OF WHETHER BAC SHOULD
HAVE BEEN DETERMINED TO BE A RESPONSIBLE BIDDER. AS MENTIONED ABOVE, A
PREAWARD SURVEY WAS CONDUCTED AND THE NAVY DETERMINED THAT BAC WAS A
RESPONSIBLE BIDDER ON THE BASIS OF THE PREAWARD SURVEY. OUR OFFICE
REVIEWS AFFIRMATIVE DETERMINATIONS OF RESPONSIBILITY ONLY UPON A SHOWING
OF FRAUD OR WHEN THE SOLICITATION CONTAINS DEFINITIVE RESPONSIBILITY
CRITERIA WHICH ALLEGEDLY HAVE NOT BEEN APPLIED. VI-MIL, INC., B-188171,
FEBRUARY 23, 1977, 77-1 CPD 132; RANDALL MANUFACTURING COMPANY, INC.,
B-185363, JANUARY 26, 1976, 76-1 CPD 44; CENTRAL METAL PRODUCTS, 54
COMP.GEN. 66, 67 (1974), 74-2 CPD 64. THE SOLICITATION CONTAINED NO
DEFINITIVE RESPONSIBILITY CRITERION REQUIRING ICC OPERATING AUTHORITY
AND IS SILENT CONCERNING OPERATING CERTIFICATES REQUIRED FOR PERFORMANCE
OF THE CONTRACT. WE HAVE HELD THAT EVEN WHEN A SOLICITATION EXPRESSLY
INDICATES THE NEED FOR OPERATING LICENSES IN GENERAL LANGUAGE, WHETHER
OR NOT A LICENSE IS OBTAINED IS A MATTER SOLELY BETWEEN THE CONTRACTOR
AND THE LICENSING AUTHORITY. MID AMERICAN MOVERS, INC., B-187612,
FEBRUARY 4, 1977, 77-1 CPD 92; MCNAMARA-LUNZ VANS & WAREHOUSES, INC.,
B-185803, JULY 8, 1976, 76-2 CPD 20, AFF'D, B-185803, SEPTEMBER 3, 1976,
76-2 CPD 217; ACCORD, DISTRICT MOVING & STORAGE, INC. -
RECONSIDERATION, B-188200, JUNE 16, 1977, 77-1 CPD 435. BECAUSE
CHIPMAN'S PROTEST DOES NOT ALLEGED FRAUD AND, THEREFORE, DOES NOT
INVOLVE EITHER OF THE CONDITIONS REQUISITE TO OUR REVIEW OF THE NAVY'S
AFFIRMATIVE DETERMINATION OF RESPONSIBILITY, WE WILL NOT CONSIDER THIS
GROUND OF THE PROTEST ON THE MERITS.
CHIPMAN ALSO CONTENDS THAT AWARD OF A SMALL BUSINESS SET-ASIDE
CONTRACT TO BAC VIOLATES SBA AND ASPR REGULATIONS BECAUSE UC, BAC'S
SUBCONTRACTOR, IS THE AGENCY OF A LARGE BUSINESS CONCERN, GLOBAL VAN
LINES, INC. PARAGRAPH F7 OF PART II OF THE IFB PROVIDES FOR
SUBCONTRACTING AS FOLLOWS:
"THE CONTRACTOR SHALL NOT SUBCONTRACT WITHOUT PRIOR WRITTEN APPROVAL
OF THE CONTRACTING OFFICER. THE FACILITIES OF ANY APPROVED
SUBCONTRACTOR SHALL MEET THE MINIMUM STANDARDS REQUIRED BY THIS
CONTRACT."
THE NAVY WAS ADVISED OF BAC'S INTENTION TO SUBCONTRACT TO UC AT THE
TIME OF THE BID OPENING. BECAUSE OF THIS, BEFORE AWARD THE NAVY FILED A
SIZE STATUS PROTEST WITH SBA, WHICH DETERMINED BAC TO BE A SMALL
BUSINESS FOR THIS PROCUREMENT. THE NAVY'S CONTRACTING OFFICER APPROVED
THE SUBCONTRACTING ARRANGEMENT IN WRITING BY LETTER TO BAC DATED
FEBRUARY 2, 1977. THE SBA IS EMPOWERED BY 15 U.S.C. 637(B)(6) (1970) TO
CONCLUSIVELY DETERMINE QUESTIONS OF SMALL BUSINESS SIZE STATUS FOR
FEDERAL PROCUREMENT PURPOSES; SUCH DECISIONS BY SBA ARE NOT, THEREFORE,
SUBJECT TO REVIEW BY THIS OFFICE. SEE, E.G., GIBRALTAR INDUSTRIES,
INC., B-187567, JANUARY 31, 1977, 77-1 CPD 78; PACIFIC AMERICAN
AIRLINES, B-187504, B-187505, OCTOBER 13, 1976, 76-2 CPD 330; LIMPIO
INDUSTRIES, B-187255, SEPTEMBER 30, 1976, 76-2 CPD 301.
IN VIEW OF THE FACT THAT THE BASIS FOR THE PROTEST CONCERN MATTERS
WHICH ARE NOT FOR CONSIDERATION BY OUR OFFICE, THE PROTEST IS DISMISSED.
B-189324, OCTOBER 18, 1977
HEADNOTES - UNAVAILABLE
TEMPORARILY PROMOTED EMPLOYEE WAS PERMANENTLY PROMOTED TO ANOTHER
POSITION IN SAME GRADE WITHOUT BEING RETURNED TO HIS FORMER LOWER-GRADE
POSITION. THE EMPLOYEE'S PAY IN THE PERMANENT POSITION MAY NOT BE
ADJUSTED TO REFLECT A PERIODIC STEP-INCREASE WHICH HE WOULD HAVE
RECEIVED IN THE LOWER-GRADE POSITION. THE PERMANENT PROMOTION MERELY
REMOVED THE TEMPORARY LIMITATION PLACED UPON THE INITIAL PROMOTION TO
THE HIGHER GRADE.
C. LAWRENCE VACHE - RETROACTIVE PAY ADJUSTMENT:
THIS MATTER CONCERNS A REQUEST FOR AN ADVANCE DECISION BY MR.
PRESTON L. ADAIR, A DISBURSING OFFICER OF THE U.S. AIR FORCE AT TINKER
AIR FORCE BASE, OKLAHOMA, PERTAINING TO A SUPPLEMENTAL VOUCHER SUBMITTED
BY MR. C. LAWRENCE VACHE, A CIVILIAN AIR FORCE EMPLOYEE, FOR $487.29
REPRESENTING ADDITIONAL COMPENSATION FROM JULY 4, 1976, THROUGH APRIL
23, 1977. THE QUESTION PRESENTED IS WHETHER A TEMPORARILY PROMOTED
EMPLOYEE IS ENTITLED, UPON PERMANENT PROMOTION, TO HAVE A PERIODIC
STEP-INCREASE TO WHICH HE WOULD HAVE BEEN ENTITLED IN HIS LOWER GRADE
BUT FOR THE TEMPORARY PROMOTION USED IN SETTING HIS PAY RATE.
THE FACTS PRESENTED BY THE ADMINISTRATIVE RECORD ARE BRIEFLY STATED
AS FOLLOWS. MR. VACHE WAS EMPLOYED BY THE UNITED STATES AIR FORCE AS A
SUPERVISORY MECHANICAL ENGINEER, WITH AN OCCUPATION CODE OF GS-830(024)
AT GRADE GS-13, STEP 7, PER ANNUM SALARY OF $27,490. EFFECTIVE NOVEMBER
9, 1975, MR. VACHE WAS TEMPORARILY PROMOTED TO THE POSITION OF
SUPERVISORY AEROSPACE ENGINEER, WITH AN OCCUPATION CODE OF GS-862(092),
AT GRADE GS-14, STEP 4, PER ANNUM SALARY OF $29,546. THIS TEMPORARY
PROMOTION WAS NOT TO EXCEED 1 YEAR AS STATED IN THE NOTIFICATION OF
PERSONNEL ACTION (SF-50). THE FORM FURTHER STATED THAT MR. VACHE HAD
BEEN INFOMRED IN ADVANCE OF THE REASONS FOR AND THE CONDITIONS OF THE
PROMOTION, AND THAT HE WAS EXEMPT UNDER FLSA. ON JULY 2, 1976, A
REQUEST FOR PERSONNEL ACTION (SF-52) WAS FORWARDED TO THE APPROPRIATE
PERSONNEL OFFICE REQUESTING THAT MR. VACHE'S TEMPORARY POSITION AS A
SUPERVISORY AEROSPACE ENGINEER BE ABOLISHED EFFECTIVE JULY 4, 1976. THE
REQUEST WAS SIGNED BY THE CHIEF, OFFICE OF MASIIS, WHERE MR. VACHE WAS
TEMPORARILY EMPLOYED. ON JULY 6, 1976, MR. VACHE REPORTED TO HIS FORMER
OFFICER, MME, STATING THAT HE HAD BEEN RELEASED FROM HIS POSITION TO
WHICH HE HAD BEEN TEMPORARILY PROMOTED TO GS-14 IN THE OFFICE OF MASIIS.
MR. VACHE STATED FURTHER THAT HE WAS RETURNING TO DUTY IN MME SINCE
THAT WAS THE ORGANIZATION TO WHICH HE WAS ASSIGNED WHEN PROMOTED
TEMPORARILY. THE DEPUTY CHIEF OF ENGINEERING DIVISION, MME, ADVISED MR.
VACHE TO RETURN TO THE MECHANICAL SECTION, MMETC, AND WORK WITH MR. G.
STH, THE EMPLOYEE WHO HAD ASSUMED MR. VACHE'S TEMPORARILY VACATED GS-13
SUPERVISOR POSITION. HOWEVER, EFFECTIVE JULY 18, 1976, MR. VACHE WAS
PERMANENTLY PROMOTED FROM HIS TEMPORARY POSITION AS A SUPERVISORY
AEROSPACE ENGINEER, TO A PERMANENT POSITION AS A SUPERVISORY TECHNICAL
MANAGEMENT SPECIALIST, OCCUPATION CODE GS-0301, GS-14, STEP 4, PER ANNUM
SALARY OF $29,546. THIS ACTION WAS ACCOMPLISHED BY SF-50, "NOTIFICATION
OF PERSONNEL ACTION."
MR. VACHE CONTENDS THAT THE CIRCUMSTANCES INVOLVING HIS TEMPORARY
PROMOTION TO A GS-14 POSITION, HIS RELEASE DATE FROM PERFORMING THE
DUTIES OF THAT POSITION, AND HIS SUBSEQUENT PERMANENT PROMOTION TO A
DIFFERENT GS-14 POSITION LED TO THE SETTING OF AN ERRONEOUS PAY RATE AT
WHICH HE IS PRESENTLY BEING PAID. SPECIFICALLY, MR. VACHE CONTENDS HE
SHOULD HAVE BEEN RETURNED TO HIS FORMER POSITION AT GS-13, STEP 7,
SALARY OF $27,490 PER ANNUM, ON JULY 4, 1976. AT THAT TIME HE WOULD
HAVE BEEN ELIGIBLE FOR A WITHIN-GRADE INCREASE TO STEP 8, WITH A SALARY
OF $28,254 PER ANNUM. THEN, EFFECTIVE JULY 18, 1976, WHEN HE WAS GIVEN
A PERMANENT PROMOTION TO A GS-14 POSITION, THE STEP ADJUSTMENT WOULD
HAVE BEEN TO STEP 5, WITH A SALARY OF $30,441 PER CANNUM. MR. VACHE
ASSERTS THAT "THE SF-52 ABOLISHING MY TEMPORARY PROMOTION IS A VALID
PERSONNEL ACTION." THEREFORE HE BELIEVES THAT FOR THE INTERIM PAY
PERIOD, JULY 4, TO JULY 17, 1976, HE SHOULD HAVE BEEN RETURNED TO HIS
PERMANENT GS-13 POSITION, AND BEEN GIVEN BENEFIT OF THE WITHIN-GRADE
INCREASE TO STEP 8, TO WHICH HE HAD BECOME ENTITLED WHILE SERVING IN THE
TEMPORARY GS-14 POSITION. HAD THIS ACTION BEEN TAKEN, HIS RATE OF PAY
UPON PROMOTION TO THE PERMANENT GS-14 POSITION WOULD HAVE BEEN SET AT
STEP 5 RATHER THAN STEP 4. HE ASSERTS THAT THE CORRECTION OF HIS
RECORDS WITH CORRESPONDING RETROACTIVE PAY ADJUSTMENTS WOULD BE IN
ACCORDANCE WITH SUCH DECISIONS AS 54 COMP.GEN. 69 (1974).
THE AIR FORCE CIVILIAN PERSONNEL OFFICE STATES THAT ITS ACTIONS WERE
PROPER AND THAT MR. VACHE WILL BE ELIGIBLE FOR HIS NEXT WITHIN-GRADE
INCREASE TO STEP 5 ON OR ABOUT NOVEMBER 6, 1977.
SECTION 5335(A) OF TITLE 5, UNITED STATES CODE (1970), PROVIDES THAT
AN EMPLOYEE SHALL BE ADVANCED ON A PERIODIC BASIS TO THE NEXT HIGHEST
RATE WITHIN THE GRADE OF HIS POSITION PROVIDED THAT HIS WORK IS OF AN
ACCEPTABLE LEVEL OF COMPETENCE, AND HE DID NOT RECEIVE AN EQUIVALENT
INCREASE IN PAY DURING THE PERIOD. UNDER THE TERMS OF THE STATUTE, THE
CONCEPT OF EQUIVALENT INCREASE IS ONLY USED TO DETERMINE WHETHER AN
EMPLOYEE MAY BE GRANTED A WITHIN-GRADE STEP INCREASE. THAT AUTHORITY
DOES NOT ADDRESS THE ISSUE OF THE RATE AT WHICH AN EMPLOYEE'S PAY IS TO
BE SET UPON PERMANENT PROMOTION TO A HIGHER GRADE FOLLOWING A TEMPORARY
PROMOTION TO SUCH GRADE.
THE CIVIL SERVICE COMMISSION, HOWEVER, HAS ISSUED FPM SUPPLEMENT
296-31 TO PROVIDE GUIDANCE FOR PROCESSING PERSONNEL ACTIONS.
SPECIFICALLY, SECTION A-3 OF SUBTABLE 6-3, TABLE 4, BOOK V, STATES THAT
WHEN A TEMPORARY PROMOTION IS LATER MADE PERMANENT, THE PERSONNEL ACTION
IS "(E)FFECTED FOR THE SOLE PURPOSE OF REMOVING AN INDEFINITE OR
TEMPORARY LIMITATION PLACED ON THE LAST PROMOTION." ALTHOUGH SUCH A
PERSONNEL ACTION ORDINARILY CONTEMPLATES THE SITUATION WHERE THE
EMPLOYEE IS PERMANENTLY ASSIGNED TO THE POSITION TO WHICH HE HAD BEEN
TEMPORARILY PROMOTED, THE COMMISSION'S INSTRUCTION IS NOT RESTRICTED TO
THAT TYPE OF SITUATION. THUS, AN ACTION REMOVING A TEMPORARY LIMITATION
ON A PROMOTION IS APPROPRIATE WHERE THE EMPLOYEE IS ASSIGNED TO ANOTHER
POSITION AT THE HIGHER GRADE BECAUSE THE NATURE OF THE ACTION (E.G.,
PROMOTION, DEMOTION, ETC.) IS DETERMINED BY THE GRADE IN WHICH THE
EMPLOYEE IS PLACED, RATHER THAN BY THE POSITION TO WHICH HE IS ASSIGNED.
SEE 5 C.F.R. 531.202(H) (1976). SINCE THE PERSONNEL ACTION BY ITS
TERMS MERELY REMOVES A TEMPORARY TIME LIMITATION, THE INDIVIDUAL'S RATE
OF COMPENSATION IS PROPERLY DETERMINED UPON THE FACTS AND CIRCUMSTANCES
IN EXISTENCE AT THE TIME OF THE INITIAL, TEMPORARY PROMOTION, GIVING
CONSIDERATION TO TIME SERVED IN THE HIGHER GRADE. TIME SERVED IN THE
TEMPORARY APPOINTMENT IS CREDITED FOR PURPOSES OF DETERMINING THE
WITHIN-GRADE STEP INCREASE ENTITLEMENT IN THAT HIGHER GRADE. SUBCHAPTER
S4-7D OF BOOK 531, FPM SUPPLEMENT 990-2. THUS, DECISIONS OF THIS OFFICE
HAVE HELD THAT AN EMPLOYEE WHO RECEIVES A TEMPORARY APPOINTMENT IS
ENTITLED, UPON RESTORATION TO HIS FORMER POSITION, TO ANY WITHIN-GRADE
INCREASES IN HIS REGULAR POSITION TO WHICH HE MAY BE ENTITLED. 30
COMP.GEN. 82 (1950). WHERE THE EMPLOYEE IS NOT RESTORED TO HIS FORMER
GRADE, THERE IS NO AUTHORITY BY WHICH HE MAY BE GRANTED THE BENEFIT OF
WITHIN-GRADE INCREASES TO WHICH HE MAY HAVE BEEN ENTITLED IN THE
LOWER-GRADE POSITION.
AS NOTED ABOVE, MR. VACHE CONTENDS THAT HE WAS IN FACT RESTORED TO
HIS GRADE GS-13 POSITION FOR 1 PAY PERIOD PRIOR TO BEING PERMANENTLY
ASSIGNED TO ANOTHER GRADE GS-14 POSITION. IT IS HIS VIEW THAT SUCH
ACTION WAS EFFECTED BY THE GS-52, REQUEST FOR PERSONNEL ACTION, EXECUTED
ON JULY 2, 1976, REQUESTING THE ABOLITION OF THE POSITION TO WHICH HE
WAS TEMPORARILY PROMOTED.
WE NOTED AT THE OUTSET THAT IN CASES WHERE A REQUEST INVOLVES BOTH A
PERSON AND A POSITION, THE SF-52 IS TO INDICATE THE TYPE OF PERSONNEL
AND POSITION ACTIONS DESIRED. SEE FPM SUPP. 296-31, SUBCHAPTER S2-1 OF
BOOK IV, PART IA. ALSO, THE RULE IS WELL ESTABLISHED THAT THE EFFECTIVE
DATE OF A CHANGE IN SALARY IS THE DATE ACTION IS TAKEN BY THE
ADMINISTRATIVE OFFICER VESTED WITH PROPER AUTHORITY, OR A SUBSEQUENT
DATE FIXED BY HIM. 21 COMP.GEN. 95, 96 (1941). THUS, A CHANGE OF
SALARY TO A LOWER GRADE IS NOT EFFECTED BY AN SF-52, WHICH MERELY
REQUESTS THE ACTION, BUT BY AN SF-50, NOTIFICATION OF PERSONNEL ACTION,
AFTER THE REQUEST HAS BEEN APPROVED BY AN OFFICIAL AUTHORIZED TO DO SO.
SEE FPM SUPP. 296-31, BOOK II, SECTIONS S-10C, S-19, S-20. IN THE
PRESENT CASE, THE RECORD INDICATES THAT AN OPERATING OFFICIAL, RATHER
THAN AN APPOINTING OFFICIAL SUBMITTED THE SF-52 REQUESTING THE POSITION
ACTIO4. FURTHER, THERE IS NO SF-50 OR OTHER EVIDENCE IN THE RECORD
WHICH INDICATES THAT THE REQUESTED ACTION WAS APPROVED AND THAT MR.
VACHE'S SALARY SHOULD BE CHANGED TO A LOWER GRADE. SINCE NO INTERVENING
ACTION WAS TAKEN ON THE REQUESTED POSITION CANCELLATION, THE PERSONNEL
ACTION PERMANENTLY PROMOTING MR. VACHE ON JULY 18, 1976, WAS CORRECT.
THUS, MR. VACHE WAS NEVER RESTORED TO HIS PREVIOUS LOWER-GRADE POSITION.
SINCE, AS INDICATED ABOVE, RESTORATION TO THE LOWER GRADE IS A
PREREQUISITE TO THE BENEFIT OF ANY WITHIN-GRADE INCREASES ACCRUING IN
THAT POSITION, MR. VACHE HAD NOT ENTITLEMENT TO A STEP INCREASE AT THE
TIME HIS PROMOTION TO GRADE GS-14 WAS MADE PERMANENT.
ACCORDINGLY, THE VOUCHER SUBMITTED BY MR. VACHE MAY NOT BE PAID.
B-189525, OCTOBER 18, 1977
HEADNOTES - UNAVAILABLE
MOTHER OF DECEASED EMPLOYEE OF VA HOSPITAL CLAIMED UNPAID
COMPENSATION OWED TO DECEASED AT DATE OF DEATH ON MAY 12, 1958. 5
U.S.C. 61F (1958) PROVIDED THAT CLAIM OF WIDOWER OF DECEASED HAD
PRIORITY OVER MOTHER. CLAIM WAS DENIED SINCE DECREASED WAS MARRIED AT
TIME OF HER DEATH AND, EVEN THOUGH WIDOWER ALLEGEDLY DESERTED DECEASED
AND DID NOT FILE CLAIM WITH GAO WITHIN 10 YEARS, HIS CLAIM HAD PRIORITY.
CLAIMS FILED BY DAUGHTERS MORE THAN 10 YEARS AFTER CLAIM AROSE WERE
DISALLOWED BECAUSE THEY WERE BARRED BY 31 U.S.C. 71A. SETTLEMENTS WERE
CORRECT AND ARE AFFIRMED.
LILLIAN E. CLARK ENGS (DECEASED) - DISPOSITION OF UNPAID
COMPENSATION:
THIS ACTION IS IN RESPONSE TO THE LETTER OF JUNE 16, 1977, FROM E.
D. SHACKLETT, M.D., HOSPITAL DIRECTOR, VETERANS ADMINISTRATION (VA)
HOSPITAL, COATESVILLE, PENNSYLVANIA, REQUESTING A DECISION IN CONNECTION
WITH THE DISPOSITION OF UNPAID COMPENSATION OWED TO MRS. LILLIAN E.
CLARK ENGS, A FORMER EMPLOYEE OF THE HOSPITAL, AT THE DATE OF HER DEATH.
THE RECORD SHOWS THAT LILLIAN E. CLARK ENGS DIED ON MAY 12, 1958.
HER UNPAID COMPENSATION ON THE DATE OF HER DEATH AMOUNTED TO $811.77.
ON OCTOBER 13, 1960, THE MOTHER OF THE DECEASED EMPLOYEE, MRS. FANNIE
CLARK, FILED A STANDARD FORM 1155 (CLAIM FOR UNPAID COMPENSATION OF
DECEASED CIVILIAN EMPLOYEE). SHE ALSO SUBMITTED A FORM SHOWING SHE WAS
ADMINISTRATRIX OF THE ESTATE OF LILLIAM E. CLARK ENGS. THE SF 1155
SHOWED THAT THE DECEASED WAS SURVIVED BY HER MOTHER - MRS. FANNIE CLARK,
HER HUSBAND - MR. JOHN ENGS, AND TWO CHILDREN - CLARETHA FANNIE CLARK
ENGS AND FREDERICKA ATHENA CLARK ENGS. THE CLAIM WAS REFERRED TO OUR
CLAIMS DIVISION BY THE VA FOR SETTLEMENT.
ON DECEMBER 8, 1960, OUR CLAIMS DIVISION DETERMINED THAT THE MATTER
SHOULD BE HELD IN ABEYANCE PENDING RECEIPT OF A CLAIM FOR THE UNPAID
COMPENSATION FROM MR. JOHN ENGS, THE DECEDENT'S WIDOWER, SINCE UNDER
SECTION 1 OF THE ACT OF AUGUST 3, 1950, NOW CODIFIED AT 5 U.S.C. 5582,
HE HAD A PRIOR CLAIM TO THE MONEY. ON APRIL 13, 1971, OUR CLAIMS
DIVISION RECEIVED A CLAIM ON BEHALF OF FREDERICKA ATHENA CLARK ENGS AND
CLARETHA FANNIE CLARK ENGS FOR THE UNPAID COMPENSATION DUE MRS. LILLIAN
E. CLARK ENGS. OUR CLAIMS DIVISION, IN ITS ACTION OF OCTOBER 29, 1973,
DENIED THESE CLAIMS ON THE BASIS THAT THE CLAIMS HAD NOT BEEN FILED
WITHIN 10 YEARS AFTER THE DEATH OF THE DECEDENT AND, THEREFORE, THE
CLAIMS WERE BARRED BY THE 10-YEAR STATUTE OF LIMITATIONS UNDER THE
PROVISIONS OF THE ACT OF OCTOBER 9, 1940, 31 U.S.C. 71A (1970).
THE JUNE 16, 1977, LETTER FROM THE VA HOSPITAL DIRECTOR IS, IN
EFFECT, A REQUEST FOR RECONSIDERATION OF THE ABOVE-OUTLINED ACTIONS
TAKEN BY OUR CLAIMS DIVISION.
AT THE TIME OF MRS. LILLIAN E. CLARK ENGS' DEATH, SECTION 61F, TITLE
5, UNITED STATES CODE (1958), PROVIDED THAT:
"IN ORDER TO FACILITATE THE SETTLEMENT OF THE ACCOUNTS OF DECEASED
CIVILIAN OFFICERS AND EMPLOYEES OF THE FEDERAL GOVERNMENT AND OF THE
GOVERNMENT OF THE DISTRICT OF COLUMBIA (INCLUDING WHOLLY OWNED AND
MIXED-OWNERSHIP GOVERNMENT CORPORATIONS) ALL UNPAID COMPENSATION DUE
SUCH AN OFFICER OR EMPLOYEE AT THE TIME OF HIS DEATH SHALL BE PAID TO
THE PERSON OR PERSONS SURVIVING AT THE DATE OF DEATH, IN THE FOLLOWING
ORDER OF PRECEDENCE, AND SUCH PAYMENT SHALL BE A BAR TO RECOVERY BY ANY
OTHER PERSON OF AMOUNTS SO PAID:
"FIRST, TO THE BENEFICIARY OR BENEFICIARIES DESIGNATED BY THE OFFICER
OR EMPLOYEE IN WRITING TO RECEIVE SUCH COMPENSATION FILED WITH THE
GOVERNMENT AGENCY IN WHICH THE OFFICER OR EMPLOYEE WAS EMPLOYED AT THE
TIME OF HIS DEATH, AND RECEIVED BY SUCH AGENCY PRIOR TO THE OFFICER'S OR
EMPLOYEE'S DEATH;
"SECOND, IF THERE BE NO SUCH BENEFICIARY, TO THE WIDOW OR WIDOWER OF
SUCH OFFICER, OR EMPLOYEE;
"THIRD, IF THERE BE NO BENEFICIARY OR SURVIVING SPOUSE, TO THE CHILD
OR CHILDREN OF SUCH OFFICER OR EMPLOYEE, AND DESCENDANTS OF DECEASED
CHILDRED, BY REPRESENTATION;
"FOURTH, IF NONE OF THE ABOVE, TO THE PARENTS OF SUCH OFFICER OR
EMPLOYEE, OR THE SURVIVOR OF THEM;
"FIFTH, IF THERE BE NONE OF THE ABOVE, TO THE DULY APPOINTED LEGAL
REPRESENTATIVE OF THE ESTATE OF THE DECEASED OFFICER OR EMPLOYEE, OR IF
THERE BE NONE, TO THE PERSON OR PERSONS DETERMINED TO BE ENTITLED
THERETO UNDER THE LAWS OF THE DOMICILE OF THE DECEASED OFFICER OR
EMPLOYEE."
UNDER THE ABOVE-QUOTED STATUTE THE UNPAID COMPENSATION WOULD HAVE TO
BE PAID TO JOHN ENGS IN PREFERENCE TO THE CLAIMS OF FANNIE CLARK,
CLARETHA FANNIE CLARK ENGS, OR FREDERICKA ATHENA CLARK ENGS. ALTHOUGH
IT IS ARGUED THAT JOHN ENGS HAD DESERTED THE DECEDENT IN THE EARLY
1950'S, NO PROOF HAS BEEN PRESENTED SHOWING THAT HE HAD EITHER DIVORCED
THE DECEDENT OR PREDECEASED HER. WE HAVE HELD THAT WHEN A PERSON
APPEARS TO HAVE BEEN LIVING AT A CERTAIN TIME, THE PRESUMPTION, IN THE
ABSENCE OF PROOF TO THE CONTRARY, IS THAT HE IS STILL ALIVE. WE HAVE
PROCEEDED IN CASES OF THIS NATURE ON THE BASIS THAT THE WIDOW OR WIDOWER
MAY BE ALIVE UNLESS THE DEATH IS ESTABLISHED OR IS JUDICIALLY DETERMINED
BY A COURT OF COMPETENT JURISDICTION. SEE B-145563, JULY 19, 1961, AND
CASES CITED THEREIN. THEREFORE, THE ACTION TAKEN BY, OUR CLAIMS
DIVISION ON DECEMBER 8, 1960, DISALLOWING THE CLAIM MADE BY FANNIE CLARK
ON OCTOBER 13, 1960, WAS CORRECT.
MOREOVER, THE CLAIM MADE BY FANNIE CLARK ON OCTOBER 13, 1960, WAS THE
ONLY CLAIM FOR UNPAID COMPENSATION OWED TO LILLIAN E. CLARK ENGS
RECEIVED IN OUR OFFICE WITHIN 10 YEARS FOLLOWING HER DEATH. IF, AT THE
TIME OF FILING OF THE CLAIM ON OCTOBER 13, 1960, THE WIDOWER JOHN ENGS
WAS ALIVE, THEN SUCH CLAIM WOULD BE WITHOUT EFFECT. THIS IS SO BECAUSE
AT THE TIME OF THE FILING ON OCTOBER 13, 1960, MRS. FANNIE CLARK HAD NO
RIGHT TO THE UNPAID COMPENSATION, A WIDOWER TAKING PRECEDENCE OVER A
MOTHER OR ADMINISTRATRIX IN THE SETTLEMENT OF DECEDENTS' ACCOUNTS UNDER
5 U.S.C. 61F (1958). UNLESS IT COULD BE ESTABLISHED THAT JOHN ENGS DID
NOT SURVIVE THE DECEDENT OR THAT HE WAS DIVORCED FROM THE DECEDENT AT
HER DEATH, THE OCTOBER 13, 1960, CLAIM, A CLAIM ON BEHALF OF FANNIE
CLARK, CLARETHA FANNIE CLARK ENGS, AND FREDERICKA ATHENA CLARK ENGS,
WOULD BE WITHOUT EFFECT, AND ANY CLAIMS FILED BY THEM AFTER MAY 12,
1968, WOULD BE FOREVER BARRED SINCE THEY WOULD NOT HAVE BEEN RECEIVED BY
OUR OFFICE WITHIN 10 YEARS AFTER THE CLAIM FIRST ACCRUED AS PROVIDED IN
31 U.S.C. 71A. SEE B-145563, SUPRA. THEREFORE, THE CLAIMS DIVISION
ACTIONS OF OCTOBER 29, 1973, DENYING THE CLAIMS OF FREDERICKA ATHENA
CLARK ENGS AND CLARETHA FANNIE CLARK ENGS ON THE BASIS OF THE 10-YEAR
STATUTE OF LIMITATIONS WERE CORRECT.
FOR THE ABOVE REASONS, THE ACTIONS OF OUR CLAIMS DIVISION TAKEN ON
DECEMBER 8, 1960, AND OCTOBER 29, 1973, ARE AFFIRMED. SINCE A CLAIM HAS
NOT BEEN RECEIVED ON BEHALF OF JOHN ENGS WITHIN 10 YEARS AFTER THE DEATH
OF LILLIAN E. CLARK ENGS, NO PAYMENT OF UNPAID COMPENSATION OWED TO
LILLIAN E. CLARK ENGS MAY NOW BE MADE AND ALL FUTURE CLAIMS ARE
PRECLUDED BY 31 U.S.C. 71A.
B-189931, OCTOBER 18, 1977
HEADNOTES - UNAVAILABLE
SINCE PROTEST INVOLVES PROCUREMENT PURSUANT TO ARMS EXPORT CONTROL
ACT (FORMERLY FOREIGN MILITARY SALES ACT) AND WILL NOT INVOLVE USE OF
APPROPRIATED FUNDS, MATTER IS NOT SUBJECT TO SETTLEMENT BY GENERAL
ACCOUNTING OFFICE AND IS DISMISSED.
J. H. RUTTER REX MANUFACTURING CO., INC.:
J. H. RUTTER REX MANUFACTURING CO., INC. (RUTTER REX) PROTEXTS THE
INCLUSION OF SMALL BUSINESS SET-ASIDE AND SMALL BUSINESS LABOR SURPLUS
AREA SET-ASIDE RESTRICTIONS IN INVITATION FOR BIDS NO. DSA100-77-B-0953,
ISSUED BY THE DEFENSE LOGISTICS AGENCY (DLA), DEFENSE PERSONNEL SUPPORT
CENTER, PHILADELPHIA, PENNSYLVANIA, ON JULY 21, 1977 FOR 748,220 PAIRS
OF SUMMER UNIFORM WORK TROUSERS.
BY LETTER DATED SEPTEMBER 15, 1977, DLA INFORMED THIS OFFICE THAT THE
SOLICITATION REPRESENTS PART OF A SALE OF DEFENSE ARTICLES TO A FOREIGN
COUNTRY UNDER THE AUTHORITY OF THE ARMS EXPORT CONTROL ACT, 22 U.S.C.
2751 ET SEQ., FORMERLY KNOWN AS THE FOREIGN MILITARY SALES ACT (SEE
SECTION 201(A) OF THE INTERNATIONAL SECURITY ASSISTANCE AND ARMS EXPORT
CONTROL ACT, PUB. L. NO. 94-329, 90 STAT. 729 (1976)). THE AGREEMENT
BETWEEN THE UNITED STATES AND THE FOREIGN GOVERNMENT IS DENOMINATED A
"DEPENDABLE UNDERTAKING" PURSUANT TO 22 U.S.C. 2762(C) (SUPP. V, 1975)
AND OBLIGATES THE FOREIGN GOVERNMENT TO MAKE FUNDS AVAILABLE IN SUCH
AMOUNTS AND AT SUCH TIMES AS MAY BE REQUIRED TO MEET THE PAYMENTS CALLED
FOR BY THE CONTRACT. DLA RECOMMENDS THAT THE PROTEST BE DISMISSED ON
THE BASIS OF OUR DECISIONS IN GIBRALTAR INDUSTRIES, INC., B-187635,
JANUARY 21, 1977, 77-1 CPD 43 AND TELE-DYNAMICS, DIVISION OF AMBAC
INDUSTRIES, 55 COMP.GEN. 674 (1976), 76-1 CPD 60, IN WHICH WE DECLINED
TO CONSIDER PROTESTS CONCERNING FOREIGN MILITARY SALES PROCUREMENTS
PURSUANT TO 22 U.S.C. 2762 BECAUSE THEY DID NOT INVOLVE EXPENDITURES OF
APPROPRIATED FUNDS.
RUTTER REX, ON THE OTHER HAND, ASSERTS THAT WE SHOULD REVEIW THE
MATTER BECAUSE APPROPRIATED FUNDS OF THE UNITED STATES WILL BE INVOLVED
IF THE FOREIGN GOVERNMENT DEFAULTS ON ITS OBLIGATION TO FURNISH FUNDS TO
THE UNITED STATES IN ORDER TO MEET CONTRACTUAL COMMITMENTS AND BECAUSE
THERE MUST BE A REVIEW OF THE THE AGENCY'S ACTIONS SINCE THE AGENCY IS
NOT FREE TO ACT IN ANY WAY THAT IT SEES FIT REGARDLESS OF THE
CONSEQUENCES.
WE AGREE WITH DLA THAT THE PROTEST SHOULD BE DISMISSED. THE RECORD
CLEARLY INDICATES THAT THE PROCUREMENT INVOLVES A FOREIGN MILITARY SALES
AGREEMENT PURSUANT TO WHICH THE FOREIGN GOVERNMENT IS OBLIGATED TO MAKE
PERIODIC PAYMENTS IN ACCORDANCE WITH THE PAYMENT SCHEDULE OF THE
AGREEMENT. WHILE THERE IS ALWAYS THE POSSIBILITY OF A DEFAULT ON THE
PAYMENT OBLIGATION, WE DO NOT BELIEVE THAT CHANGES THE ESSENTIAL
CHARACTERS OF THE TRANSACTION AS ONE TO BE FINANCED BY A FOREIGN COUNTRY
RATHER THAN BY APPROPRIATED FUNDS OF THE UNITED STATES. SEE VERNE
CORPORATION, B-188332, JUNE 2, 1977, 77-1 CPD 386. IN ANY EVENT, HERE
WE ARE ADVISED BY DLA THAT ALL PAYMENTS BY THE FOREIGN COUNTRY HAVE BEEN
MADE ON SCHEDULE, AND THAT ONLY THE FINAL PAYMENT, DUE IN DECEMBER 1977,
REMAINS UNPAID.
WITH REGARD TO THE OTHER POINT MADE BY RUTTER REX, WE POINT OUT THAT
WE DO NOT RENDER DECISIONS IN PROCUREMENTS INVOLVING FOREIGN MILITARY
SALES BECAUSE THERE WILL NOT BE ANY PERMANENT EXPENDITURE OF
APPROPRIATED FUNDS. ALTHOUGH THIS MEANS THE BID PROTEST REVIEW
PROCEDURES OF 4 C.F.R.PART 20 (1977) ARE NOT AVAILABLE TO WOULD-BE
PROTESTERS, REVIEW OF THE PROCUREMENT ACTIONS INVOLVED MAY BE AVAILABLE
THROUGH AGENCY PROTEST PROCEDURES AND IN ANY EVENT MAY BE OBTAINED
THROUGH THE COURTS.
THE PROTEST IS DISMISSED.
B-190228, OCTOBER 18, 1977
HEADNOTES - UNAVAILABLE
1. QUESTIONS CONCERNING SMALL BUSINESS SIZE STATUS ARE NOT FOR
CONSIDERATION BY GAO SINCE AUTHORITY OVER SUCH MATTERS IS VESTED BY
STATUTE IN SBA.
2. PROTEST BASED ON SPECULATION THAT AGENCY WILL NOT CONDUCT
PREAWARD SURVEY AND THAT LOW BIDDER WILL BE UNABLE TO PERFORM AT ITS BID
PRICE IS NOT FOR CONSIDERATION.
BROKEN LANCE ENTERPRISES, INC.:
BROKEN LANCE ENTERPRISES, INC. (BROKEN LANCE) PROTESTS THE AWARD OF A
CONTRACT FOR MESS ATTENDANT SERVICES UNDER INVITATION FOR BIDS (IFB) NO.
DABT35-77-B-0103 ISSUED BY THE U.S. ARMY, FORT DIX, NEW JERSEY (ARMY).
BROKEN LANCE ADVANCES TWO GROUNDS OF PROTEST; FIRST, THAT THE
APPARENT LOW BIDDER IS NOT A SMALL BUSINESS AND, SECOND, THAT THE ARMY
SHOULD MAKE A PREAWARD SURVEY TO ENSURE THAT BIDDERS OFFERING PRICES
LOWER THAN BROKEN LANCE'S PRICE ARE ABLE TO PERFORM. REGARDING BROKEN
LANCE'S FIRST CONTENTION THAT THE PROPOSED AWARDEE DOES NOT QUALIFY AS A
SMALL BUSINESS, THE SMALL BUSINESS ADMINISTRATION (SBA) IS EMPOWERED
UNDER 15 U.S.C. 637(B)(6) (1970) TO DETERMINE THE SIZE STATUS OF
BUSINESS CONCERNS ON PROCUREMENTS SET ASIDE FOR SMALL BUSINESSES.
DETERMINATIONS MADE UNDER THIS CONCLUSIVE AND EXCLUSIVE SBA AUTHORITY
ARE NOT SUBJECT TO REVIEW BY OUR OFFICE. INFLATED PRODUCTS CO., INC.;
LA CROSSE GARMENT MANUFACTURING COMPANY, B-187243, DECEMBER 14, 1976,
76-2 CPD 485; CASE, INC.; BETHUNE QUILTING COMPANY, B-185422, JANUARY
29, 1976, 76-1 CPD 63.
WITH RESPECT TO THE CONTENTION THAT THE ARMY MIGHT DETERMINE THE
RESPONSIBILITY OF THE AWARDEE WITHOUT THE BENEFIT OF A PREAWARD SURVEY,
WE NOTE THAT THE REGULATIONS DO NOT REQUIRE THE ARMY TO CONDUCT A
PREAWARD SURVEY IN DETERMINING THE RESPONSIBILITY OF A BIDDER. JULIAN
A. MCDERMOTT CORPORATION, B-187705, B-188197, APRIL 18, 1977, 77-1 CPD
266; ARMED SERVICES PROCUREMENT REGULATION 1-905.4(B) (1976 ED.). IN
ANY EVENT THIS OFFICE DOES NOT REVIEW PROTESTS BASED ON THE CONTENTION
THAT THE LOW BIDDER WILL BE UNABLE TO PERFORM AT ITS BID PRICE.
STEAMATIC OF MIDDLE GEORGIA, INC., B-188900, MAY 4, 1977, 77-1 CPD 308.
ACCORDINGLY, THE PROTEST IS NOT FOR CONSIDERATION.
B-190271, OCTOBER 18, 1977
HEADNOTES - UNAVAILABLE
GAO DOES NOT REVIEW PROTESTS AGAINST AFFIRMATIVE DETERMINATIONS OF
RESPONSIBILITY BY CONTRACTING OFFICIALS EXCEPT FOR REASONS NOT
APPLICABLE IN THIS CASE.
WYATT LUMBER COMPANY:
WYATT LUMBER COMPANY (WYATT) PROTESTS ANY AWARD TO ALABAMA WOOD
TREATING CO. (ALABAMA) PURSUANT TO SOLICITATION NO. DSA720-77-B-0651,
ISSUED BY THE DEFENSE LOGISTICS AGENCY. WE HAVE BEEN ADVISED THAT AWARD
OF A CONTRACT WAS MADE TO ALABAMA, WHICH IMPORTS AN AFFIRMATIVE
DETERMINATION OF THE SUCCESSFUL BIDDER'S RESPONSIBILITY. ADVERTISING
DISTRIBUTORS OF WASHINGTON, INC., B-187070, FEBRUARY 15, 1977, 77-1 CPD
111.
IT IS WYATT'S CONTENTION THAT THE CONTRACTING OFFICER COULD NOT MAKE
A DETERMINATION OF RESPONSIBILITY, AS ASPR REQUIRES, WITHOUT A PREAWARD
SURVEY THAT INCLUDED CONSIDERATION OF A SUBCONTRACTOR (W. R. BULLINGTON
LUMBER CO.) OF ALABAMA. WYATT ADVISES THAT "THIS CONSTITUTES THE TOTAL
CONTENT OF (ITS) PROTEST."
OUR OFFICE DOES NOT REVIEW PROTESTS CONCERNING AFFIRMATIVE
DETERMINATIONS OF RESPONSIBILITY, ABSENT AN ALLEGATION OR DEMONSTRATION
OF FRAUD ON THE PART OF CONTRACTING OFFICIALS OR OTHER CIRCUMSTANCES NOT
APPLICABLE HERE. CENTRAL METAL PRODUCTS, INC., 54 COMP.GEN. 66 (1974),
74-2 CPD 64; DATA TEST CORPORATION, 54 COMP.GEN. 499 (1974), 74-2 CPD
365, AFFIRMED 54 COMP.GEN. 715 (1975), 75-1 CPD 138. WHILE WE DO
CONSIDER PROTESTS INVOLVING NEGATIVE DETERMINATIONS OF THE PROTESTER'S
RESPONSIBILITY IN ORDER TO PROVIDE ASSURANCE AGAINST THE ARBITRARY
REJECTION OF BIDS, AFFIRMATIVE DETERMINATIONS ARE BASED IN LARGE MEASURE
ON SUBJECTIVE JUDGMENTS WHICH ARE LARGELY WITHIN THE DISCRETION OF THE
PROCURING OFFICIALS WHO MUST SUFFER ANY DIFFICULTIES RESULTING BY REASON
OF A CONTRACTOR'S INABILITY TO PERFORM.
IN VIEW OF THE FACT THAT THE PROTEST CONCERNS A MATTER NOT FOR
CONSIDERATION BY THIS OFFICE, IT IS DISMISSED WITHOUT FURTHER ACTION.
B-187181, OCTOBER 17, 1977
HEADNOTES - UNAVAILABLE
WAGE GRADE EMPLOYEES OF AIR FORCE WHO, DUE TO ADVERSE WEATHER
CONDITIONS, WERE DENIED PERMISSION TO LEAVE REMOTE WORKSITES AT END OF
WORKDAY ARE NOT ENTITLED TO OVERTIME COMPENSATION FOR PERIOD THEY
REMAINED AT SITE. CLAIMANTS DID NOT SATISFY PROVISIONS OF 5 U.S.C. 5544
(SUPP II, 1972) REGARDING ENTITLEMENT TO OVERTIME COMPENSATION REQUIRING
THAT WORK BE PERFORMED OR THAT EMPLOYEE BE ON STANDBY OR ON-CALL STATUS.
IN ADDITION, WAITING TIME, IN THIS PARTICULAR INSTANCE IS NOT
COMPENSABLE AS OVERTIME HOURS WORKED UNDER FAIR LABOR STANDARDS ACT, 29
U.S.C. 201 ET SEQ. (SUPP. IV, 1974).
ALBERT L. SPIRES AND JAMES P. HANLON, JR. - OVERTIME COMPENSATION:
THIS CASE INVOLVES A REQUEST FOR AN ADVANCE DECISION BY LT. W. A.
MELVIN, ACCOUNTING AND FINANCE OFFICER, USAF, SUBMITTED TO THIS OFFICE
ON AUGUST 10, 1976, CONCERNING THE CLAIM FOR OVERTIME COMPENSATION OF
MESSRS, ALBERT L. SPIRES AND JAMES P. HANLON, JR., WAGE GRADE EMPLOYEES,
WG-10, OF THE DEPARTMENT OF THE AIR FORCE. MESSRS. SPIRES' AND HANLON'S
DUTIES REQUIRE THEM TO WORK AT VARIOUS REMOTE MISSILE SITES WHICH ARE
PART OF THE F. E. WARREN AIR FORCE BASE COMPLEX. THESE MISSILE SITES
ARE SUBJECT TO STRINGENT SECURITY REGULATIONS AND WORKERS AT THE SITES
ARE NOT ALLOWED TO DEPART UNTIL THEY ARE RELEASED BY THE SITE MANAGERS.
THE RECORD SHOWS THAT THE NORMAL DUTY HOURS OF EACH CLAIMANT ARE FROM
7:30 TO 11:30 A.M. AND FROM 12:30 TO 4:30 P.M.
ON MAY 24, 1976, EACH CLAIMANT ARRIVED AT HIS ASSIGNED REMOTE MISSILE
SITE TO PERFORM WORK. DUE TO ADVERSE WEATHER CONDITIONS, CLAIMANTS WERE
DENIED PERMISSION BY THE RESPECTIVE SITE MANAGERS TO LEAVE THE AREA UPON
COMPLETION OF THEIR WORK ASSIGNMENTS. AS A RESULT, EACH CLAIMANT HAD TO
REMAIN AT THE RESPECTIVE WORKSITE UPON COMPLETION OF HIS REGULAR TOUR OF
DUTY AT 4:30 P.M. AND NEITHER WAS PERMITTED TO LEAVE HIS REMOTE WORKSITE
UNTIL AFTER THE BEGINNING OF THE NEXT WORKDAY.
BOTH CLAIMANTS CLAIMED 7.5 HOURS OF OVERTIME FOR MAY 24, 1976, FOR
THE TIME THEY WERE REQUIRED TO REMAIN AT THE WORKSITE IN EXCESS OF THEIR
8-HOUR WORKDAY WHICH ENDED AT 4:30 P.M. THE AMOUNT OF OVERTIME CLAIMED
BY EACH WAS $84.90, WHICH REPRESENTED THE 7.5 HOURS AT THEIR WG-10
OVERTIME RATE OF $11.32 PER HOUR. THE RECORD SHOWS THAT MR. SPIRES
VOLUNTARILY WORKED FOR 3.5 HOURS OF THE 7.5 HOUR PERIOD IN QUESTION AND
THAT OVERTIME COMPENSATION FOR SUCH ACTUAL WORK HAS BEEN APPROVED BY THE
AIR FORCE AND PAID MR. SPIRES. THEREFORE, MR. SPIRES' PENDING CLAIM IS
FOR 4 HOURS OF OVERTIME COMPENSATION IN THE AMOUNT OF $45.28. MR.
HANLON DID NOT PERFORM ANY ACTUAL WORK DURING THE PERIOD FOR WHICH HE
CLAIMS OVERTIME COMPENSATION.
THE STATUTORY AUTHORITY FOR OVERTIME COMPENSATION FOR WAGE GRADE
EMPLOYEES IS 5 U.S.C. 5544 (SUPP. II, 1972) WHICH PROVIDES IN PERTINENT
PART:
"(A) AN EMPLOYEE WHOSE PAY IS FIXED AND ADJUSTED FROM TIME TO TIME IN
ACCORDANCE WITH PREVAILING RATES UNDER SECTION 5343 OR 5349 OF THIS
TITLE, OR BY A WAGE BOARD OR SIMILAR ADMINISTRATIVE AUTHORITY SERVING
THE SAME PURPOSE, IS ENTITLED TO OVERTIME PAY FOR OVERTIME FORK IN
EXCESS OF 8 HOURS A DAY OR 40 HOURS A WEEK. HOWEVER, AN EMPLOYEE
SUBJECT TO THIS SUBSECTION WHO REGULARLY IS REQUIRED TO REMAIN AT OR
WITHIN THE CONFINES OF HIS POST OF DUTY IN EXCESS OF 8 HOURS A DAY IN A
STANDBY OR ON-CALL STATUS IS ENTITLED TO OVERTIME PAY ONLY FOR HOURS OF
DUTY, EXCLUSIVE OF EATING AND SLEEPING TIME, IN EXCESS OF 40 A WEEK. *
* * "
THIS OFFICE HAS HELD THAT THE TERMS "ON CALL" AND "STANDBY" WHEN READ
IN CONJUNCTION WITH THE LANGUAGE "REQUIRED TO REMAIN AT OR WITHIN THE
CONFINES OF THEIR POST OF DUTY" CONTAINED IN 5 U.SC. 5544(A) SHOULD BE
CONSTRUED IN THE SAME MANNER AS THE COMPARABLE LANGUAGE OF 5 U.S.C.
5545(C)(1). SEE 42 COMP.GEN. 195 (1962) AT 201.
THE DEFINITION OF STANDBY DUTY UNDER 5 U.S.C. 5545, WHICH DEFINITION
WOULD ALSO BE APPLICABLE TO STANDBY DUTY COMPENSABLE UNDER 5 U.S.C.
5544, IS SET FORTH AT FEDERAL PERSONNEL MANUAL CHAPTER 610, SUBCHAPTER
S1-3D AS FOLLOWS:
"(2) STANDBY TIME
"(A) STANDBY TIME CONSISTS OF PERIODS IN WHICH AN EMPLOYEE IS ORDERED
TO REMAIN AT OR WITHIN THE CONFINES OF HIS STATION, NOT PERFORMING
ACTUAL WORK BUT HOLDING HIMSELF IN READINESS TO PERFORM ACTUAL WORK WHEN
THE NEED ARISES OR WHEN HE IS CALLED."
THERE IS NOTHING IN THE RECORD TO INDICATE THAT EITHER CLAIMANT
PERFORMED ANY WORK DURING THE PERIOD FOR WHICH OVERTIME IS HERE CLAIMED.
IN ADDITION, CLAIMANTS WERE RESTRICTED TO THEIR RESPECTIVE WORKSITES
SOLELY DUE TO ADVERSE WEATHER CONDITIONS AND NOT SO THAT THEY WOULD BE
AVAILABLE TO PERFORM ADDITIONAL WORK. SINCE CLAIMANTS WERE NOT REQUIRED
TO HOLD THEMSELVES IN READINESS TO PERFORM WORK THEY ARE NOT ENTITLED TO
OVERTIME COMPENSATION UNDER 5 U.S.C. 5544 FOR THE PERIOD DURING WHICH
THEY WERE DETAINED BUT DID NOT PERFORM ACTUAL WORK. SEE 52 COMP.GEN.
794 (1973).
UNDER THE PROVISIONS OF 29 U.S.C. 204(F) (SUPP. IV, 1974) THE CIVIL
SERVICE COMMISSION IS AUTHORIZED TO ADMINISTER THE PROVISIONS OF THE
FAIR LABOR STANDARDS ACT (FLSA). THE FOLLOWING IS QUOTED FROM A
DETERMINATION BY THE CHIEF OF THE COMMISSION'S PAY POLICY DIVISION WITH
RESPECT TO THE CLAIMANT'S ENTITLEMENT UNDER THE FLSA OVERTIME
COMPENSATION PROVISIONS:
"UNDER THE FLSA CERTAIN PRINCIPLES MUST BE CONSIDERED IN DETERMINING
WHETHER WAITING TIME IS 'HOURS OF WORK.' AN EMPLOYEE WHO IS WAITING
BECAUSE HE OR SHE HAS BEEN DETAINED AT THE WORKSITE IS EITHER ON DUTY OR
OFF DUTY DURING THE PERIOD.
"AN EMPLOYEE IS ON DUTY WHILE WAITING, IF WAITING IS AN INTEGRAL PART
OF HIS JOB. HIS TIME BELONGS TO, AND IS CONTROLLED BY THE EMPLOYER.
SUCH TIME IS PREDOMINATELY FOR THE BENEFIT OF THE EMPLOYER, AND THUS THE
EMPLOYEE IS 'ENGAGED TO WAIT.'
"ON THE OTHER HAND, AN EMPLOYEE IS OFF DUTY IF HE IS COMPLETELY
RELIEVED FROM DUTY FOR A PERIOD WHICH IS LONG ENOUGH TO ENABLE HIM TO
USE THE TIME EFFECTIVELY FOR HIS OWN PURPOSES. HE IS NOT COMPLETELY
RELIVED FROM DUTY UNLESS HE IS DEFINITELY TOLD IN ADVANCE THAT HE MAY
LEAVE HIS JOB AND THAT HE WILL NOT HAVE TO COMMENCE WORK UNTIL A
DEFINITELY SPECIFIED HOUR HAS ARRIVED. WAITING IS NOT AN INTEGRAL PART
OF HIS JOB AND THE EMPLOYEE IS DETAINED FOR REASONS BEYOND THE CONTROL
OF THE EMPLOYER. THERE IS NO EXPECTATION THAT HE PERFORM WORK, OR BE
AVAILABLE TO PERFORM WORK. SUCH TIME IS PREDOMINATELY FOR THE BENEFIT
OF THE EMPLOYEE, AND HE IS 'WAITING TO BE ENGAGED.'
"BECAUSE OF STRINGENT SECURITY REGULATIONS, THE TWO EMPLOYEES IN
QUESTION WERE NOT PERMITTED TO LEAVE THEIR RESPECTIVE JOB SITES ON ANY
DAY WITHOUT THE PERMISSION OF THE SITE MANAGER. THE WEATHER CONDITIONS
WERE DANGEROUS, AND THE EMPLOYEES WOULD HAVE BEEN FORCED TO DRIVE LONG
DISTANCES OVER TREACHEROUS ROADS HAD THEY BEEN PERMITTED TO LEAVE. THE
AGENCY OBVIOUSLY HAD NO CONTROL OVER THE WEATHER OR THE ROAD CONDITIONS
AND ACTED REASONABLY IN DETAINING THESE TWO EMPLOYEES. SINCE NEITHER OF
THE EMPLOYEES WAS EXPECTED TO PERFORM WORK, OR TO BE AVAILABLE TO
PERFORM WORK, THE TIME THAT THEY SPENT WAITING WAS NOT PRIMARILY FOR THE
BENEFIT OF THE AGENCY.
"UNDER NORMAL CIRCUMSTANCES THESE EMPLOYEES WOULD HAVE BEEN PERMITTED
TO GO HOME AT THE END OF THE WORK DAY. WAITING IS NOT AN INTEGRAL PART
OF THEIR JOBS. THEY WERE DETAINED ON THIS PARTICULAR DAY, BUT THEY WERE
COMPLETELY RELIEVED FROM DUTY, AND THEY WERE NOT EXPECTED TO PERFORM
WORK, OR TO BE AVAILABLE TO PERFORM WORK, UNTIL THE FOLLOWING MORNING.
* * * THE WAITING TIME BELONGED TO THE EMPLOYEES AND WAS NOT UNDER THE
CONTROL OF THE AGENCY. THUS THESE EMPLOYEES WERE 'WAITING TO BE
ENGAGED' AND, THEREFORE, OFF DUTY. CONSEQUENTLY, THE TIME THAT THESE
TWO EMPLOYEES WERE DETAINED MEETS NONE OF THE CONDITIONS THAT WOULD MAKE
THIS TIME 'HOURS OF WORK' UNDER THE FLSA."
CONSISTENT WITH THE COMMISSION'S REPORT WE FIND THAT THE WAITING TIME
ON WHICH MESSRS. SPIRES' AND HANLON'S CLAIMS ARE BASED IS NOT
COMPENSABLE UNDER THE FLSA, 29 U.S.C. 201 ET SEQ. (SUPP. IV, 1974).
ACCORDINGLY, SINCE CLAIMANTS HAVE NOT SATISFIED THE REQUIREMENTS OF
EITHER 5 U.S.C. 5544 (SUPP. II, 1972) OR 29 U.S.C. 201 ET SEQ. (SUPP.
IV, 1974) FOR PAYMENT OF OVERTIME COMPENSATION, THEIR CLAIMS MAY NOT BE
ALLOWED.
B-188913, OCTOBER 17, 1977
HEADNOTES - UNAVAILABLE
EMPLOYEE SUFFERED BREAK IN SERVICE OF MORE THAN 3 YEARS AND MAY NOT
BE RECREDITED WITH PREVIOUSLY EARNED SICK LEAVE. CIVIL SERVICE
COMMISSION REGULATIONS CONTAINED IN 5 C.F.R. 630.502(B)(1) HAS FORCE AND
EFFECT OF LAW WITH NO EXCEPTIONS OR WAIVER.
ALICE M. THORNTON - RECREDIT OF SICK LEAVE AFTER BREAK IN SERVICE:
THIS ACTION IS IN RESPONSE TO A REQUEST FOR A DECISION FROM FRANK C.
ARNOLD, REGIONAL PERSONNEL OFFICER, UNITED STATES DEPARTMENT OF
AGRICULTURE, FOREST SERVICE, CONCERNING THE CLAIM OF ALICE M. THORNTON,
A FOREST SERVICE EMPLOYEE, FOR RECREDIT OF SICK LEAVE AFTER A BREAK IN
SERVICE OF MORE THAN 3 YEARS.
THE RECORD INDICATES THAT MRS. THORNTON SUFFERED A REDUCTION-IN-FORCE
FROM HER POSITION WITH THE ANIMAL HEALTH ALASKA STATE OFFICE, DEPARTMENT
OF AGRICULTURE, EFFECTIVE JANUARY 7, 1972, AND WAS NOT SUBSEQUENTLY
RE-EMPLOYED IN THE FEDERAL SERVICE UNTIL MARCH 31, 1975. MRS. THORNTON
ACKNOWLEDGES THAT UNDER CIVIL SERVICE COMMISSION REGULATIONS A BREAK IN
SERVICE MUST NOT EXCEED 3 YEARS IN ORDER FOR SICK LEAVE TO BE RECREDITED
BUT SHE STATES THAT AN EXCEPTION SHOULD BE MADE SINCE SHE TRIED ON
SEVERAL OCCASIONS (WITHOUT SUCCESS) TO SEEK EMPLOYMENT IN THE FEDERAL
SERVICE.
THE CIVIL SERVICE COMMISSION REGULATION IN QUESTION IS CONTAINED IN 5
C.F.R. 630.502(B)(1) (1977), AND IT PROVIDES, IN PERTINENT PART AS
FOLLOWS:
" * * * AN EMPLOYEE WHO IS SEPARATED FROM THE FEDERAL GOVERNMENT OR
THE GOVERNMENT OF THE DISTRICT OF COLUMBIA IS ENTITLED TO A RECREDIT OF
HIS SICK LEAVE IF HE IS REEMPLOYED IN THE FEDERAL GOVERNMENT OR THE
GOVERNMENT OF THE DISTRICT OF COLUMBIA WITHOUT A BREAK IN SERVICE OF
MORE THAN 3 YEARS."
THIS REGULATION WAS ISSUED PURSUANT TO 5 U.S.C. 6311 AND HAS THE
FORCE AND EFFECT OF LAW. NEITHER OUR OFFICE NOR ANY AGENCY IN THE
EXECUTIVE BRANCH OF THE GOVERNMENT HAS THE AUTHORITY TO WAIVE OR GRANT
EXCEPTIONS TO THAT REGULATION. WILLIAM F. GALLO, B-180604, APRIL 9,
1974. ACCORDINGLY, MRS. THORNTON MAY NOT BE RECREDITED WITH HER
PREVIOUSLY EARNED SICK LEAVE.
B-189516, OCTOBER 17, 1977
HEADNOTES - UNAVAILABLE
PROTESTER, SUSPENDED UNDER PROVISIONS OF ASPR SEC. 1-605.1 (1976
ED.), IS NOT INTERESTED PARTY UNDER GAO BID PROTEST PROCEDURES SINCE
SUSPENSION RENDERS PROTESTER INELIGIBLE FOR AWARD. THEREFORE, PROTEST
IS DISMISSED.
COMSPACE CORPORATION:
COMSPACE CORPORATION (COMSPACE) PROTESTS AGAINST THE AWARD OF
CONTRACTS UNDER PURCHASE REQUESTS NOS. YPC 771430000299, 300, 301 AND
302, ISSUED BY THE DEFENSE LOGISTICS AGENCY (DLA). COMSPACE CONTENDS
THAT DLA NEGOTIATED IN BAD FAITH. ACCORDING TO COMSPACE, A DLA
PURCHASING AGENT ORALLY AWARDED THE SUBJECT ORDERS TO COMSPACE ON JUNE
17, 1977, AND THEN DLA FORMALLY AWARDED THE ORDERS TO ANOTHER FIRM AT A
LOWER PRICE. DLA DENIES THAT THERE WAS AN ORAL AWARD TO COMSPACE.
PURSUANT TO THE PROVISIONS OF ARMED SERVICES PROCUREMENT REGULATION
(ASPR) SEC. 1-605.1 (1976 ED.), THE PROTESTER HAS BEEN INDEFINITELY
SUSPENDED FROM CONTRACTING WITH THE DEPARTMENT OF DEFENSE.
UNDER THE ASPR A SUSPENDED FIRM IS INELIGIBLE FOR DEPARTMENT OF
DEFENSE CONTRACTS DURING THE TERM OF THE SUSPENSION. THEREFORE, A
SUSPENDED FIRM IS NOT AN "INTERESTED PARTY" UNDER OUR BID PROTEST
PROCEDURES, 4 C.F.R. 20.1(A) (1977), AND RESOLVING THE PROTEST ON THE
MERITS WOULD BE ACADEMIC. JOHN BERNARD INDUSTRIES, INC., B-189103,
B-189104, B-189105, B-189106, B-189112, B-189119, B-189139, JUNE 22,
1977, 77-1 CPD 446.
ACCORDINGLY, THE PROTEST IS DISMISSED.
B-125045, OCTOBER 13, 1977
HEADNOTES - UNAVAILABLE
1. COST PRINCIPLES IN FPR SEC. 1-15 ARE APPLICABLE TO GRANTS AND
CONTRACTS WITH STATE AND LOCAL GOVERNMENTS UNDER FPR SEC. 1-15.701-1.
THEREFORE, SUPPLEMENTAL AGREEMENT ENTERED INTO BY DEPARTMENT OF INTERIOR
AND STATE OF CALIFORNIA AFTER EFFECTIVE DATE OF REGULATION IS SUBJECT
THERETO WHETHER PROPERLY CHARACTERIZED AS GRANT OR CONTRACT.
2. NO AUTHORITY FOUND TO SUPPORT CONCLUSION THAT COST PRINCIPLES
OVERRIDE SPECIFIC INCONSISTENT AGREEMENT BETWEEN THE PARTIES.
THEREFORE, PAYMENT MAY BE MADE PURSUANT TO AGREEMENT EVEN THOUGH
INCONSISTENT WITH COST PRINCIPLES. HOWEVER, DEPARTMENT SHOULD TAKE
ACTION TO BRING AGREEMENT IN LINE WITH COST PRINCIPLES.
DEPARTMENT OF WATER RESOURCES OF THE STATE OF CALIFORNIA:
BY LETTER DATED JULY 7, 1977, THE DEPARTMENT OF THE INTERIOR
(INTERIOR) REQUESTED A DECISION CONCERNING THE ALLOWABILITY OF
LEGISLATIVE COSTS INCURRED BY THE STATE OF CALIFORNIA IN THE PERFORMANCE
OF CONTRACT 14-06-200-9755.
THE CONTRACT FOR THE DESIGN AND CONSTRUCTION OF WATER RESOURCE
FACILITIES FOR THE JOINT USE OF THE STATE AND THE UNITED STATES WAS
EXECUTED ON DECEMBER 30, 1961. ARTICLE 15 OF THE CONTRACT, IN PERTINENT
PART, PROVIDED:
"THE COST OF CONSTRUCTION OF THE JOINT-USE FACILITIES * * * SHALL
INCLUDE:
"(7) INDIRECT COSTS DISTRIBUTED IN THE CUSTOMARY MANNER OF THE AGENCY
WHICH INCURRED THE RELATED DIRECT COST."
ON JANUARY 12, 1972, THE PARTIES TO THE CONTRACT EXECUTED A
SUPPLEMENTAL AGREEMENT WHICH ESTABLISHED OPERATING CRITERIA FOR THE
JOINT-USE FACILITIES. ARTICLE 35(C) OF THE SUPPLEMENTAL AGREEMENT
PROVIDED AS FOLLOWS:
"THE COSTS OF CARING FOR, OPERATING, MAINTAINING, AND REPLACING THE
JOINT-USE AND FEDERAL-ONLY FACILITIES * * * SHALL INCLUDE:
"(11) INDIRECT COSTS RELATING TO THE ABOVE ITEMS DISTRIBUTED IN THE
CUSTOMARY MANNER OF THE PARTY WHICH INCURRED SUCH COSTS. FOR THE STATE
THESE WILL BE DETERMINED IN ACCORDANCE WITH THE MANUAL ENTITLED
'APPLICATION AND USE OF INDIRECT COSTS IN THE DEPARTMENT OF WATER
RESOURCES,' AS IT MAY BE AMENDED OR SUPERSEDED, AND FOR THE UNITED
STATES THESE WILL BE DETERMINED IN ACCORDANCE WITH THE MANUAL OF
'RECLAMATION INSTRUCTIONS,' AND THE REGION 2 SUPPLEMENT, AS THEY OR
EITHER OF THEM MAY BE AMENDED OR SUPERSEDED."
UNDER THE CONTRACT AND THE SUPPLEMENTAL AGREEMENT, THE STATE HAS
ALLOCATED LEGISLATIVE EXPENSES AS INDIRECT COSTS.
IN THE INTERIM BETWEEN THE EXECUTION OF THE CONTRACT AND THE
SUPPLEMENTAL AGREEMENT, BUREAU OF THE BUDGET CIRCULAR A-87 (NOW FEDERAL
MANAGEMENT CIRCULAR 74-4) WAS ISSUED (MAY 9, 1968) AND THE FEDERAL
PROCUREMENT REGULATIONS (FPR) WERE AMENDED TO IMPLEMENT THE CIRCULAR
(JANUARY 11, 1970). THE CIRCULAR AND THE IMPLEMENTATION CONTAIN
PRINCIPLES FOR DETERMINING COSTS UNDER GRANTS AND CONTRACTS WITH STATE
AND LOCAL GOVERNMENTS. FPR SEC. 1-15.713-8 SPECIFICALLY PROVIDES THAT
LEGISLATIVE EXPENSES ARE UNALLOWABLE.
IN VIEW OF THE COST PRINCIPLES, INTERIOR RAISES TWO QUESTIONS:
"1. WAS THE THEN BUREAU OF THE BUDGET CIRCULAR A-87, DATED MAY 9,
1968 (SUBPART 1-15.7 OF TITLE 41 OF THE CODE OF FEDERAL REGULATIONS),
INTENDED TO APPLY TO LONG-TERM COST SHARING AGREEMENTS EXECUTED BY
FEDERAL AGENCIES PRIOR TO THE EFFECTIVE DATE OF THAT CIRCULAR?
"2. WAS CIRCULAR A-87 INTENDED TO APPLY TO ALL CONTRACTS WITH STATE
GOVERNMENTS OR ONLY TO FEDERALLY ASSISTED PROGRAMS?
THE PURPOSE OF THE QUESTIONS IS TO ASCERTAIN WHETHER THE STATE IS
PRECLUDED FROM ALLOCATING THE LEGISLATIVE COSTS AS PART OF ITS INDIRECT
COSTS.
TO REACH A CONCLUSION, IT IS NOT NECESSARY TO ANSWER THE QUESTIONS AS
PRESENTED. WITH RESPECT TO THE INITIAL AGREEMENT EXECUTED BEFORE
CIRCULAR A-87 AND THE PROVISIONS OF FPR SEC. 1-15 WERE EFFECTIVE, WE SEE
NO REASON WHY THE CONTRACT SHOULD NOT BE CARRIED OUT IN ACCORDANCE WITH
ITS TERMS. THE SUPPLEMENTAL AGREEMENT, HOWEVER, WAS EXECUTED AFTER THE
EFFECTIVE DATE OF THE CIRCULAR AND THE REGULATORY PROVISION. WE
CONDLUDE THAT THE AGREEMENT IS EITHER A GRANT OR A CONTRACT AND
THEREFORE IS COVERED UNDER FPR SEC. 1-15.701.1. WHILE, AS NOTED,
LEGISLATIVE EXPENSES ARE NOT ALLOWABLE UNDER FPR SEC. 1-15.700, WE HAVE
BEEN ABLE TO FIND NO AUTHORITY TO SUPPORT THE PROPOSITION THAT THE COST
PRINCIPLE OVERRIDES A SPECIFIC INCONSISTENT AGREEMENT OF THE PARTIES.
CF. G. L. CHRISTIAN V. UNITED STATES, 160 CT.CL. 1 (1963), CERT. DENIED,
375 U.S. 954 (1963). THEREFORE, PAYMENT MAY BE MADE IN ACCORDANCE WITH
THE AGREEMENT EVEN THOUGH THAT IS INCONSISTENT WITH THE COST PRINCIPLES
OF FPR SEC. 1-15. HOWEVER, WE CONCUR WITH A SUGGESTION OF THE OFFICE OF
MANAGEMENT AND BUDGET THAT ACTION BE TAKEN TO BRING THE AGREEMENT IN
LINE WITH THE COST PRINCIPLES.
B-186435, OCTOBER 13, 1977
HEADNOTES - UNAVAILABLE
ARMY EMPLOYEE TRANSFERRED TO PERMANENT DUTY STATION IN CANAL ZONE.
HE IS NOT ENTITLED TO TEMPORARY QUARTERS SUBSISTENCE ALLOWANCE FOR
QUARTERS RENTED PRIOR TO BEING OCCUPIED OR WHICH WERE RENTED WHEN HE HAD
QUARTERS ELSEWHERE. ALSO, HE MAY NOT BE REIMBURSED UNEXPIRED RENT
INCIDENT TO MOVE FROM PRIVATELY OWNED QUARTERS TO GOVERNMENT-OWNED
QUARTERS OR FOR DRIVER'S LICENSES AND AUTOMOBILE TAGS AFTER INITIAL
TRANSFER TO CANAL ZONE. IN ADDITION, HE MAY NOT BE REIMBURSED TIP TO
MOVERS SINCE IT IS PERSONAL EXPENSE.
WALTER V. SMITH - REIMBURSEMENT OF RELOCATION EXPENSES:
THIS ACTION CONCERNS AN APPEAL BY WALTER V. SMITH FROM SETTLEMENT
CERTIFICATE NO. Z-2586200, JANUARY 13, 1976, ISSUED BY OUR CLAIMS
DIVISION, DENYING HIM REIMBURSEMENT FOR CERTAIN EXPENSES INCURRED
INCIDENT TO HIS TRANSFER TO THE CANAL ZONE. THE RECORD SHOWS THAT MR.
SMITH, A CIVILIAN EMPLOYEE OF THE UNITED STATES ARMY, WAS TRANSFERRED
FROM FORT HUACHUCA, ARIZONA, TO FORT AMADOR, CANAL ZONE, EFFECTIVE ON OR
ABOUT OCTOBER 9, 1973. MR. SMITH WAS AUTHORIZED A MAXIMUM OF 60 DAYS
TEMPORARY QUARTERS SUBSISTENCE EXPENSES, MISCELLANEOUS EXPENSES
ALLOWANCE, AND UNEXPIRED LEASE EXPENSES. UPON SUBMISSION OF TRAVEL
VOUCHERS, HE WAS PAID TEMPORARY QUARTERS SUBSISTENCE EXPENSES FOR THE
PERIOD OCTOBER 22 THROUGH DECEMBER 3, 1973, AND $200 FOR MISCELLANEOUS
EXPENSES. MR. SMITH'S CLAIM FOR ADDITIONAL ALLOWANCES WAS DENIED AS
SHOWN BELOW.
THE RECORD INDICATES THAT MR. SMITH PAID $670 RENT FOR ONE APARTMENT
FROM OCTOBER 6 THROUGH DECEMBER 3, 1973, AND $294 RENT FOR A SECOND
APARTMENT FROM NOVEMBER 15 THROUGH DECEMBER 2, 1973. THE RENT OF THE
FIRST APARTMENT FROM OCTOBER 6 THROUGH 21, 1973, WAS DISALLOWED SINCE
NEITHER MR. SMITH NOR HIS DEPENDENTS OCCUPIED THE APARTMENT DURING THAT
PERIOD. THE $294 RENT FOR THE SECOND APARTMENT WAS DISALLOWED SINCE MR.
SMITH AND HIS DEPENDENTS OCCUPIED THE FIRST APARTMENT DURING THE PERIOD
INVOLVED.
MR. SMITH MOVED FROM A PRIVATELY OWNED APARTMENT INTO GOVERNMENT
QUARTERS ON APRIL 15, 1974. HE CLAIMED REIMBURSEMENT FOR $185, RENT AND
MAINTENANCE CHARGES FOR THE PRIVATELY OWNED APARTMENT FOR THE PERIOD
APRIL 15 THROUGH 25, 1974. THE CLAIM WAS DISALLOWED ON THE GROUND THAT
THERE IS NO AUTHORITY TO PAY LEASE TERMINATION EXPENSES EXCEPT INCIDENT
TO A TERMINATION AT THE EMPLOYEE'S OLD STATION.
MR. SMITH ALSO CLAIMED REIMBURSEMENT FOR VARIOUS MISCELLANEOUS
EXPENSES: $26 FOR 1974 PANAMA LICENSE PLATES, $0.25 FOR A PANAMA
CERTIFICADO DE PAZ Y SALVO, $10 FOR A PANAMANIAN DRIVER'S LICENSE FOR
HIS WIFE, AND $20 FOR A TIP TO MOVERS. THE CHARGE FOR LICENSE PLATES
WAS DISALLOWED BECAUSE MR. SMITH HAD RECEIVED A $200 EXPENSES ALLOWANCE
WHICH INCLUDED THE COST OF REGISTERING HIS CAR IN 1973. NO AUTHORITY
FOR PAYMENT THE CHARGE FOR OBTAINING A DRIVER'S LICENSE IN 1974 WAS
FOUND AND THE ITEM WAS DISALLOWED. THE CLAIM FOR THE TIP WAS DISALLOWED
SINCE THERE WAS NO AUTHORITY TO PAY SUCH A CHARGE. THE CLAIM FOR $0.25
WAS NOT COVERED IN THE SETTLEMENT, APPARENTLY BECAUSE IT WAS SO SMALL.
IN ADDITION TO HIS REQUEST FOR RECONSIDERATION OF THE ABOVE
DISALLOWANCES, MR. SMITH HAS FILED TWO CLAIMS FOR REIMBURSEMENT OF THE
COSTS INCIDENT TO DRIVING HIS CAR TO AND FROM A PORT IN CONNECTION WITH
HIS TRANSFER TO THE CANAL ZONE AND HIS RETURN FROM THERE. HE HAS ALSO
REQUESTED ADVICE CONCERNING REIMBURSEMENT FOR MEAL COSTS FOR THE PERIOD
JULY 3 TO JULY 6, 1975, INCURRED WHILE HE OCCUPIED PERMANENT QUARTERS IN
THE CANAL ZONE, AND FOR THE PERIOD SEPTEMBER 2 TO SEPTEMBER 3, 1975,
WHILE HE OCCUPIED PERMANENT QUARTERS IN ARIZONA FOLLOWING TRANSFER BACK;
COSTS OF 1974 PANAMA LICENSE PLATES; 1974 CERTIFICADO DE PAZ Y SALVO,
REPUBLIC OF PANAMA; 1974 PANAMANIAN DRIVER'S LICENSE FOR HIS WIFE;
1975 CANAL ZONE DRIVER'S LICENSES FOR HIS WIFE AND HIMSELF; 1975 CANAL
ZONE LICENSE PLATES FOR TWO CARS; TAXI FARES PAID BY CLAIMANT'S WIFE
FOR TRAVEL WITHIN THE CANAL ZONE; CHARGES FOR CONNECTING AN ICE MAKER
AMOUNTING TO $23.80; AND COSTS INCIDENT TO AN UNSUCCESSFUL ATTEMPT TO
SELL CLAIMANT'S RESIDENCE IN ARIZONA.
AUTHORITY FOR REIMBURSEMENT OF RELOCATION EXPENSES IS FOUND IN 5
U.S.C. 5724A (1970). THE STATUTORY PROVISION HAS BEEN IMPLEMENTED BY
THE FEDERAL TRAVEL REGULATIONS. THESE HAVE THE FORCE AND EFFECT OF LAW
AND ARE NOT TO BE WAIVED, REGARDLESS OF THE CIRCUMSTANCES. 54 COMP.GEN.
638, 640 (1975). THEREFORE, ONLY THOSE EXPENSES WHICH ARE EXPRESSLY
AUTHORIZED BY THE STATUTE AND IMPLEMENTING REGULATIONS MAY BE
REIMBURSED.
WITH REFERENCE TO MR. SMITH'S CLAIM FOR TEMPORARY QUARTERS
SUBSISTENCE EXPENSES THE RECORD SHOWS THAT, DURING THE PERIOD OCTOBER 6
THROUGH 21, 1973, NEITHER MR. SMITH NOR HIS FAMILY HAD MOVED TO THE NEW
DUTY STATION IN THE CANAL ZONE. CONSEQUENTLY THEY DID NOT OCCUPY THE
QUARTERS FOR THE PERIOD FOR WHICH REIMBURSEMENT IS CLAIMED. FEDERAL
TRAVEL REGULATIONS (FTR) (FPMR 101-7) PARA. 2-5.2 (MAY 1973) PROVIDES
THAT SUBSISTENCE EXPENSES INCIDENT TO A PERMANENT CHANGE OF STATION
SHALL BE ALLOWED " * * * WHILE THE EMPLOYEE AND FAMILY NECESSARILY
OCCUPY TEMPORARY QUARTERS AND THE NEW OFFICIAL STATION IS LOCATED IN * *
* THE CANAL ZONE * * * ." SINCE THERE WAS NO OCCUPANCY FROM OCTOBER 6 TO
21, 1973, THE REGULATIONS DO NOT PERMIT REIMBURSEMENT OF RENT PAID FOR
THAT PERIOD. ALSO, MR. SMITH'S CLAIM FOR REIMBURSEMENT OF RENT FOR A
SECOND APARTMENT FOR THE PERIOD OF NOVEMBER 15 TO DECEMBER 2, 1973, MAY
NOT BE ALLOWED BECAUSE THE RECORD SHOWS THAT HE AND HIS FAMILY OCCUPIED
OTHER QUARTERS DURING THAT TIME AND HE HAS ALREADY BEEN REIMBURSED FOR
THE EXPENSES INCURRED IN CONNECTION WITH THE QUARTERS OCCUPIED.
THERE IS NO STATUTORY BASIS FOR ALLOWING REIMBURSEMENT OF THE $185
EXPENDITURE INCURRED IN CONNECTION WITH THE CANCELLATION OF MR. SMITH'S
LEASE IN CONNECTION WITH HIS MOVE FROM PRIVATELY OWNED QUARTERS TO
GOVERNMENT QUARTERS. ALSO, AS OUR CLAIMS DIVISION POINTED OUT, FTR
PARA. 2-6.2H COVERS ONLY CANCELLATION OF LEASES AT THE OLD DUTY STATION.
MR. SMITH CLAIMS REIMBURSEMENT OF $26 FOR PURCHASE OF 1974 PANAMA
LICENSE PLATES AND $10 FOR A PANAMANIAN DRIVER'S LICENSE FOR HIS WIFE.
FTR PARA. 2-3.1B(6) PROVIDES FOR REIMBURSEMENT OF THESE EXPENSES.
HOWEVER, AS OUR CLAIMS DIVISION POINTED OUT, MR. SMITH HAS ALREADY
RECEIVED $200 IN MISCELLANEOUS EXPENSES PURSUANT TO FTR PARA.
2-3.3B(A)(2). THAT PARAGRAPH PROVIDES THAT AN EMPLOYEE WITH A FAMILY
MAY BE PAID A MISCELLANEOUS EXPENSES ALLOWANCE OF $200 OR 2 WEEKS' BASIC
PAY, WHICHEVER IS THE LESSER AMOUNT, WITHOUT SUPPORT. AN ALLOWANCE FOR
A GREATER AMOUNT, NOT TO EXCEED 2 WEEKS' PAY OF AN EMPLOYEE WITH A
FAMILY, MAY BE ALLOWED UNDER FTR PARA. 2-3.3B IF THE EMPLOYEE SUBMITS
PAID BILLS OR OTHER SUITABLE EVIDENCE JUSTIFYING THE LARGER AMOUNT
CLAIMED. MR. SMITH HAS NOT DONE SO. ALSO, FTR PARA. 2-3.1B(6) PROVIDES
REIMBURSEMENT FOR "(C)COSTS OF AUTOMOBILE REGISTRATION, DRIVER'S
LICENSE, AND USE TAXES IMPOSED WHEN BRINING AUTOMOBILES INTO CERTAIN
JURISDICTIONS." THE REGULATION CONTEMPLATES REIMBURSEMENT OF ONLY THOSE
EXPENSES INCURRED IN CONNECTION WITH CHANGING AUTOMOBILE TAGS AND
DRIVER'S LICENSES UPON FIRST REPORTING FOR DUTY AT THE NEW PERMANENT
STATION. ONCE RESIDENCE HAS BEEN ESTABLISHED THE COSTS OF SUBSEQUENT
TAGS AND LICENSES BECOME PART OF AN EMPLOYEE'S EVERYDAY LIVING EXPENSES
AND ARE NOT CHARGEABLE TO THE GOVERNMENT. IN THIS CONNECTION THE RECORD
INDICATES THAT THE MISCELLANEOUS EXPENSE ALLOWANCE PAID TO MR. SMITH
INCLUDES AUTOMOBILE REGISTRATION FOR 1973.
THE CLAIM FOR REIMBURSEMENT FOR A TIP TO THE MOVERS IN PANAMA IS
CONSIDERED A PERSONAL EXPENSE AND IS NOT REIMBURSABLE. B-174098,
DECEMBER 8, 1971. THE REMAINING CLAIM OF $0.25 FOR A PANAMA CERTIFICADO
DE PAZ Y SALVO MAY NOT BE ALLOWED AS AN ITEM OF MISCELLANEOUS EXPENSES
NOW SINCE MR. SMITH HAS BEEN PAID THE FLAT ALLOWANCE OF $200 AND WE
CONSIDER IT INCLUDED THEREIN.
MR. SMITH STATES THAT HIS TRAVEL ORDERS REQUIRED HIM TO TRAVEL
THROUGH CHARLESTON, SOUTH CAROLINA. HOWEVER, HE SHIPPED HIS CAR FROM
AND TO LONG BEACH, CALIFORNIA. HE HAS CLAIMED MILEAGE AND RELATED
EXPENSES ON SEPTEMBER 20 THROUGH 21, 1973, INCIDENT TO DRIVING HIS
PRIVATE VEHICLE TO LONG BEACH FOR SHIPMENT TO THE CANAL ZONE. HE HAS
ALSO CLAIMED TRAVEL AND RELATED EXPENSES INCURRED SEPTEMBER 25 THROUGH
27, 1975, INCIDENT TO PICKING UP HIS CAR AT THE PORT UPON HIS RETURN
FROM THE CANAL ZONE. THE FTRS CONTAIN NO PROVISION FOR REIMBURSEMENT OF
SUCH COSTS. HOWEVER, AS THE CLAIMANT HIMSELF POINTS OUT, THE JOINT
TRAVEL REGULATIONS EXPRESSLY FORBID SUCH REIMBURSEMENT. 2 JOINT TRAVEL
REGULAT-ONS PARA. C7154-3 (CHANGE 88, FEBRUARY 1, 1973) PROVIDES:
"3. MOVEMENT TO AND FROM PORTS. NO TRANSPORTATION CHARGES WILL BE
ALLOWED FOR SHIPMENT OF A MOTOR VEHICLE TO AND FROM APPROPRIATE PORTS.
HOWEVER, WHEN THE EMPLOYEE DRIVES THE MOTOR VEHICLE TO OR FROM THE PORTS
WHILE HE IS PERFORMING PERMANENT DUTY TRAVEL (INCLUDING RENEWAL
AGREEMENT TRAVEL), PER DIEM AND MILEAGE ALLOWANCES MAY BE AUTHORIZED.
NO PER DIEM, TRANSPORTATION EXPENSES, OR MILEAGE WILL BE ALLOWED THE
EMPLOYEE WHEN HE MAKES A SEPARATE TRIP TO THE PORT TO DELIVER OR PICK UP
THE MOTOR VEHICLE."
ALSO, 2 JOINT TRAVEL REGULATIONS PARA. C7154-3 (CHANGE 117), JULY 1,
1975) PROVIDES:
"3. MOVEMENT TO AND FROM PORTS. AN EMPLOYEE IS NOT ENTITLED TO SHIP
HIS PRIVATELY OWNED MOTOR VEHICLE BETWEEN HIS OLD AND NEW PERMANENT DUTY
STATION AND THE VEHICLE PORT FACILITY SERVING SUCH STATIONS. TRAVEL
ALLOWANCES ARE NOT AUTHORIZED WHEN AN EMPLOYEE MAKES A SEPARATE TRIP
FROM HIS OLD OR NEW DUTY STATION TO A VEHICLE PORT FACILITY TO DELIVER
OR PICK UP HIS VEHICLE."
THE ABOVE PROVISIONS PRECLUDE ANY REIMBURSEMENT TO MR. SMITH FOR
COSTS INCURRED IN DELIVERING HIS PRIVATE AUTOMOBILE TO LONG BEACH AND IN
PICKING IT UP THERE. ACCORDINGLY, HIS CLAIMS FOR RECOVERY OF SUCH
EXPENSES ARE DISALLOWED.
MR. SMITH HAS ASKED ADVICE CONCERNING REIMBURSEMENT FOR THE COST OF
MEALS WHICH HE INCURRED DURING HIS LAST DAYS AT HIS CANAL ZONE RESIDENCE
AND THE FIRST DAYS AFTER HE TRANSFERRED BACK TO HIS NEW PERMANENT DUTY
STATION IN ARIZONE. IT IS WELL ESTABLISHED THAT ONE MAY NOT RECEIVE
TEMPORARY QUARTERS SUBSISTENCE ALLOWANCE WHILE OCCUPYING PERMANENT
QUARTERS. 46 COMP.GEN. 709 (1967). SINCE MR. SMITH PURCHASED THESE
MEALS WHILE OCCUPYING PERMANENT QUARTERS, IT APPEARS SUCH EXPENSES ARE
NOT ALLOWABLE.
AS POINTED OUT ABOVE, IN SUSTAINING THE DISALLOWANCE OF THE CLAIM FOR
REIMBURSEMENT OF THE COST OF 1974 PANAMA LICENSE PLATES AND A 1974
DRIVER'S LICENSE FOR MRS. SMITH, THE FTR LIMITS REIMBURSEMENT TO THE
INITIAL FEES UPON RELOCATION. THEREFORE, MR. SMITH WOULD NOT APPEAR TO
BE ENTITLED TO SIMILAR EXPENSES IN 1974-1975.
MR. SMITH ALSO INQUIRES ABOUT REIMBURSEMENT FOR TAXI FARES FOR HIS
WIFE, WHO PREFERRED NOT TO DRIVE IN PANAMA CITY WHILE THE FAMILY RESIDED
THERE. THE USE OF A TAXI IN PANAMA CITY BY MR. SMITH'S WIFE WAS A
MATTER OF PERSONAL PREFERENCE, AND WE ARE UNAWARE OF ANY AUTHORITY FOR
REIMBURSEMENT OF SUCH EXPENDITURES.
IT WOULD APPEAR THAT HOOK UP OF AN ICE MAKER WOULD INVOLVE A
STRUCTURAL CHANGE. IF SO, THE COST THEREOF IS NOT REIMBURSABLE UNDER
FTR PARA. 2-3.1C(13). ALSO, IF THE EXPENSE WERE ALLOWABLE UNDER FTR
PARA. 2-3.1B(1), IT WOULD ONLY BE PAID IF MR. SMITH SUBMITTED EVIDENCE
OF MISCELLANEOUS EXPENSES IN EXCESS OF THE $200 ALREADY PAID.
FINALLY, MR. SMITH STATES THAT HE INCURRED EXPENSES FOR NEWSPAPER
ADVERTISEMENTS AND ATTORNEY'S FEES INCIDENT TO PLACING HIS ARIZONA
RESIDENCE UP FOR SALE. HOWEVER, THE RESIDENCE WAS NEVER SOLD. OUR
OFFICE HAS CONSISTENTLY HELD THAT IN ORDER FOR EXPENSES OF THIS NATURE
TO BE REIMBURSABLE, THERE MUST BE A SALE. SEE MATTER OF GEORGE W. LAY,
B-186976, APRIL 27, 1977, 56 COMP.GEN. --; MATTER OF ROBERT A. BENSON,
B-184869, SEPTEMBER 21, 1976. THE RATIONALE FOR SUCH DECISIONS IS THE
FACT THAT THE REGULATIONS FORBID REIMBURSEMENT OF LOSSES INCURRED
INCIDENT TO POOR MARKET CONDITIONS. SEE FTR PARA. 2-6.2E. THEREFORE,
MR. SMITH WOULD NOT BE ENTITLED TO REIMBURSEMENT FOR THE ATTORNEY'S FEES
AND OTHER COSTS WHICH HE INCURRED IN A FUTILE EFFORT TO SELL HIS ARIZONA
RESIDENCE.
IN VIEW OF THE ABOVE THE DISALLOWANCE OF MR. SMITH'S CLAIM BY OUR
CLAIMS DIVISION IS SUSTAINED AND HIS ADDITIONAL CLAIMS ARE DISALLOWED.
THE CLAIMANT HAS MADE VARIOUS OBSERVATIONS AND COMMENTS ON THE
REGULATIONS. SHOULD HE WISH TO RECOMMEND CHANGES, HE SHOULD ADDRESS HIS
SUGGESTIONS TO THE FEDERAL TRAVEL MANAGEMENT DIVISION OF THE GENERAL
SERVICES ADMINISTRATION.
B-187692, OCTOBER 13, 1977
HEADNOTES - UNAVAILABLE
LEAVE RECORD AUDIT REQUESTED BY EMPLOYEE REVEALED ANNUAL LEAVE
CHARGES WHICH EXCEEDED LEAVE ACCRUALS FOR TWO PRIOR YEARS. EMPLOYEE MAY
ELECT METHOD OF REPAYMENT UNDER 5 U.S.C. 6302(F) EVEN THOUGH SHE MAY
HAVE BEEN AWARE OF OVERCHARGE AT THE TIME IT OCCURRED. EMPLOYEE'S
ACTUAL OR CONSTRUCTIVE KNOWLEDGE OF ERROR IS RELEVANT ONLY WHEN WAIVER
OF THE OVERPAYMENT IS CONSIDERED UNDER 5 U.S.C. 5584.
DELORES J. COPELAND -- REPAYMENT OF EXCESS LEASE CHARGES:
THIS ACTION IS IN RESPONSE TO A REQUEST FOR AN ADVANCE DECISION FROM
ALFRED M. ZUCK, COMPTROLLER, U.S. DEPARTMENT OF LABOR, REGARDING THE
REPAYMENT OF EXCESS LEAVE CHARGES TAKEN BY MRS. DELORES J. COPELAND, A
LABOR EMPLOYEE.
THE ADMINISTRATIVE REPORT STATES THAT, AS A RESULT OF A LEAVE RECORD
AUDIT REQUESTED BY THE EMPLOYEE, THE AGENCY DISCOVERED IN NOVEMBER 1976,
THAT MRS. COPELAND HAD TAKEN 16 HOURS OF ANNUAL LEAVE IN 1974 AND 15
HOURS OF ANNUAL LEAVE IN 1975 IN EXCESS OF THAT AVAILABLE FOR HER USE IN
THOSE YEARS. THE AGENCY REQUESTED CASE REIMBURSEMENT FOR THE OVERDRAWN
LEAVE, BUT MRS. COPELAND ASKED THAT EXCESS LEAVE BE REPAID THROUGH A
REDUCTION OF HER CURRENT ANNUAL LEAVE BALANCE PURSUANT TO 5 U.S.C.
6302(F) (SUPP. V, 1975). THE ADMINISTRATIVE REPORT STATES FURTHER:
"THE RESULTS OF OUR AUDIT DID NOT CONFLICT ADVERSELY WITH THE RECORDS
MAINTAINED BY MRS. COPELAND; IN FACT, ACCORDING TO HER, THE LEAVE USAGE
REFLECTED IN THE OFFICIAL PAYROLL RECORDS WAS UNDERSTATED BY FOUR HOURS.
IT IS FELT, THEREFORE, THAT MRS. COPELAND HAD BEEN AWARE OF HER LEAVE
STATUS DURING 1974 AND 1975."
SINCE SUBSECTION 6302(F) REFERS TO "ADMINISTRATIVE ERROR" AND SINCE
THE AGENCY CONSIDERS THE EXCESS LEAVE CHARGES WERE NOT DUE TO
"ADMINISTRATIVE ERROR," THE AGENCY QUESTIONS WHETHER IT MAY PERMIT THE
EMPLOYEE TO REPAY THE EXCESS LEAVE CHARGES THROUGH A REDUCTION OF HER
CURRENT ANNUAL LEAVE BALANCE.
SUBSECTION F OF SECTION 6302 OF TITLE 5, UNITED STATES CODE, PROVIDES
AS FOLLOWS:
"AN EMPLOYEE WHO USES EXCESS ANNUAL LEAVE CREDITED BECAUSE OF
ADMINISTRATIVE ERROR MAY ELECT TO REFUND THE AMOUNT RECEIVED FOR THE
DAYS OF EXCESS LEAVE BY LUMP-SUM OR INSTALLMENT PAYMENTS OR TO HAVE THE
EXCESS LEAVE CARRIED FORWARD AS A CHARGE AGAINST LATER-ACCRUING ANNUAL
LEAVE, UNLESS REPAYMENT IS WAIVED UNDER SECTION 5584 OF THIS TITLE."
THIS PROVISION WAS ADDED AS A NEW SUBSECTION TO SECTION 6302 UNDER
THE 1973 AMENDMENTS TO THE ANNUAL AND SICK LEAVE ACT, PUB. L. 93-181,
SEC. 4, 87 STAT. 706 (1973). OUR REVIEW OF THE LEGISLATIVE HISTORY
INDICATES THAT THE PURPOSE OF THIS PROVISION WAS TO PERMIT AN EMPLOYEE
THE OPTION OF REPAYING AN OVERCHARGE OF LEAVE BY LUMP-SUM OR INSTALLMENT
CASH PAYMENTS OR BY A CHARGE AGAINST CURRENT OR LATER ACCRUING ANNUAL
LEAVE WHERE FORMERLY THERE WAS NO AUTHORITY FOR REPLAYING BY CHARGING
FUTURE LEAVE EARNINGS. SEE S. REP. NO. 93-491, 93D CONG., 1ST SESS. 2,
4 (1973); AND H.R. REP. NO. 93-456, 93D CONG., 1ST SESS. 3, 7, 9
(1973). SEE ALSO FEDERAL PERSONNEL MANUAL LETTER NO. 630-22, JANUARY
11, 1974, 13-14 (ATTACHMENT). WE CONSTRUE THE TERM "ADMINISTRATIVE
ERROR" IN THIS PROVISION TO MEAN THE ERROR ON THE PART OF THE AGENCY IN
FAILING TO MAINTAIN ACCURATE RECORDS OF LEAVE ACCRUALS AND CHARGES WHICH
WOULD HAVE REVEALED THE OVERCHARGE AT THE TIME IT OCCURRED.
THE AGENCY CONSIDERS THE APPARENT KNOWLEDGE BY MRS. COPELAND AS
PRECLUDING HER FROM CHOOSING THE METHOD TO REPAY THE EXCESS LEAVE
CHARGES UNDER 5 U.S.C. 6302(F). HOWEVER, IT IS OUR VIEW THAT, ABSENT
ANY INDICATION OF FRAUD OR OTHER WRONGDOING, AN EMPLOYEE MAY ELECT THE
METHOD OF REPAYMENT UNDER SUBSECTION 6302(F) EVEN THOUGH THAT EMPLOYEE
IS AWARE OR HAS REASON TO KNOW THAT LEAVE CHARGES EXCEED CURRENT LEAVE
BALANCES. THE EMPLOYEE'S ACTUAL OR CONSTRUCTIVE KNOWLEDGE OF THE
OVERCHARGE AT THE TIME IT TAKES PLACE IS QUESTIONED ONLY WHERE WAIVER OF
THE REPAYMENT IS CONSIDERED UNDER THE PROVISIONS OF 5 U.S.C. 5584 (SUPP.
V, 1975) AND 4 C.F.R.PART 91 (1977). IN THAT REGARD OUR DECISIONS HAVE
HELD THAT IF THE EMPLOYEE HAD ACTUAL OR CONSTRUCTIVE NOTICE OF THE ERROR
AT THE TIME OF ACCEPTING THE OVERPAYMENT, COLLECTION ACTION WOULD NOT BE
VIEWED AS BEING AGAINST EQUITY AND GOOD CONSCIENCE OR AGAINST THE BEST
INTERESTS OF THE UNITED STATES.
ACCORDINGLY, WE CONCLUDE THAT THE OVERCHARGES OF LEAVE WERE THE
RESULT OF ADMINISTRATIVE ERROR AND THAT THE EMPLOYEE MAY ELECT TO REPAY
BY THE METHODS SET FORTH IN 5 U.S.C. 6302(F).
B-188344, OCT 13, 1977
HEADNOTES - UNAVAILABLE
1. THE CIRCUMSTANCE OF PLACEMENT OF A MEMBER'S NAME ON THE TEMPORARY
DISABILITY RETIRED LIST (TDRL) IS NOT ONE WHICH CAN BE CHOSEN BY THE
MEMBER NOR IS SUCH A STATUS FINAL SINCE UNDER THE PROVISIONS OF 10
U.S.C. 1210 THE SECRETARY CONCERNED IS REQUIRED TO TAKE ADDITIONAL
ACTION TO FINALIZE THE AFFECTED INDIVIDUAL'S STATUS AS A MEMBER OF THE
SERVICE. AS SUCH, CONSIDERING THE LEGISLATIVE PURPOSE OF 10 U.S.C.
1401A(F) RETIRED PAY RECEIVED BY A MEMBER BY VIRTUE OF THE PLACEMENT IN
A TDRL STATUS IS NOT RETIRED PAY AS CONTEMPLATED BY 10 U.S.C. 1401A(F).
2. THE PROVISIONS OF 10 U.S.C. 1401A(F), AUTHORIZE A RETIRED MEMBER
TO RECOMPUTE HIS RETIRED PAY ON A HYPOTEHTICAL BASIS AT THE PAY RATE AND
YEARS OF SERVICE APPLICABLE TO HIM AT AN EARLIER DATE WHEN HE COULD HAVE
OTHERWISE RETIRED, AS THOUGH HE HAD RETIRED THEN. IN VIEW OF THE
PURPOSE OF THAT STATUTE AND THE HYPOTEHTICAL NATURE OF COMPUTATIONS
UNDER IT, A MEMBER MAY USE A DATE WHEN HE WAS ON THE TEMPORARY
DISABILITY RETIRED LIST AS A HYPOTHETICAL RETIREMENT DATE IN COMPUTING
HIS RETIRED PAY UNDER THAT PROVISION.
DEPARTMENT OF DEFENSE MILITARY PAY AND ALLOWANCE COMMITTEE ACTION NO.
534:
THIS ACTION IS IN RESPONSE TO A LETTER DATED FEBRUARY 2, 1977, FROM
THE ASSISTANT SECRETARY OF DEFENSE (COMPTROLLER) REQUESTING AN ADVANCE
DECISION CONCERNING THE APPLICATION OF THE PROVISIONS OF 10 U.S.C.
1401A(F) TO MEMBERS RETURNED TO ACTIVE DUTY FROM THE TEMPORARY
DISABILITY RETIRED LIST (TDRL) AND SUBSEQUENTLY RETIRED FOR YEARS OF
SERVICE OR TRANSFERRED TO THE FLEET RESERVE IN THE CIRCUMSTANCES
DISCUSSED IN DEPARTMENT OF DEFENSE MILITARY PAY AND ALLOWANCE COMMITTEE
ACTION NO. 534, ENCLOSED WITH THE REQUEST.
BY LETTER DATED AUGUST 5, 1977, THAT COMMITTEE ACTION WAS REVISED TO
ASK THE FOLLOWING QUESTIONS:
"1. DOES THE FACT THAT THE MEMBERS, IN THE SITUATIONS DESCRIBED
BELOW, WERE ON THE TEMPORARY DISABILITY RETIRED LIST (TDRL) PRECLUDE
SUCH MEMBERS FROM HAVING THEIR PAY COMPUTED IN ACCORDANCE WITH THE
PROVISIONS OF 10 U.S.C. 1401A(F)?
"2. IF THE ANSWER TO QUESTION 1 IS NEGATIVE, MAY THE MEMBERS IN
SITUATIONS 1.A AND B. HAVE THEIR PAY COMPUTED IN ACCORDANCE WITH THE
PROVISIONS OF 10 U.S.C. 1401A(F) AS IF 30 SEPTEMBER 1974 WAS THE ACTUAL
DATE OF TRANSFER TO THE FLEET RESERVE OR THE DATE OR RETIREMENT AS THE
CASE MAY BE?"
THE SITUATION IN 1.A, WHICH IS NOT QUOTED, INVOLVES A REGULAR
ENLISTED MEMBER OF THE NAVY WHO WAS TRANSFERRED TO THE TDRL ON APRIL 28,
1970, WITH A 100 PERCENT DISABILITY RATING. ON APRIL 27, 1975, HE
COMPLETED 5 HEARS ON THAT LIST AND ON JUNE 8, 1975, WAS FOUND FIT FOR
DUTY AND DISCHARGED FROM THAT LIST. ON JULY 3, 1975, HE WAS TRANSFERRED
TO THE FLEET RESERVE WITH 31 YEARS, 8 MONTHS, AND 14 DAYS SERVICE FOR
BASIC PAY PURPOSES AND 26 YEARS, 8 MONTHS AND 7 DAYS SERVICE FOR
PERCENTAGE MULTIPLE PURPOSES.
THE SITUATION IN 1.B., ALSO NOT QUOTED, INVOLVES A REGULAR ENLISTED
MEMBER OF THE NAVY WHO WAS TRANSFERRED TO THE TDRL ON SEPTEMBER 14,
1972, WITH 30 PERCENT DISABILITY RATING WITH OVER 30 YEARS OF ACTIVE
SERVICE. ON OCTOBER 24, 1976, HE WAS FOUND FIT FOR DUTY AND DISCHARGED
FROM THAT LIST. ON OCTOBER 25, 1976, HE WAS REENLISTED AND RETURNED TO
ACTIVE DUTY AND ON NOVEMBER 1, 1976, WAS RETIRED FOR YEARS OF SERVICE
UNDER THE PROVISIONS OF 10 U.S.C. 6326, WITH 30 YEARS, 2 MONTHS AND 22
DAYS FOR PERCENTAGE MULTIPLE PURPOSES.
IN THE DISCUSSION RELATING TO THE FIRST SITUATION, THE COMMITTEE
ACTION QUESTIONS WHETHER THE PHRASE "INITIALLY BECAME ENTITLED" TO
RETIRED OR RETAINER PAY ON OR AFTER JANUARY 1, 1971, AS USED IN 10
U.S.C. 1401A(F), WOULD PRECLUDE SUCH MEMBER, WHO WAS ON THE TDRL PRIOR
TO THAT DATE, FROM SUCH RECOMPUTATION UPON TRANSFER TO THE FLEET RESERVE
IN 1975.
IN THE SECOND SITUATION, THE COMMITTEE ACTION EXPRESSES THE VIEW THAT
SINCE THE MEMBER WAS NTO PLACED ON THE TDRL UNTIL AFTER JANUARY 1, 1971,
HE WOULD CLEARLY BE ELIGIBLE TO RECEIVE THE ADVANTAGE OF 10 U.S.C.
1401A(F) RECOMPUTATION. THE QUESTION THEN RAISED IS WHETHER SUCH MEMBER
WOULD BE LIMITED TO RECOMPUTATIONS BASED ON PERIODS OF ACTIVE DUTY, OR
WHETHER HE COULD ALSO USE DATES DURING THE PERIOD OF TIME SPEND ON THE
TDRL FOR THE PURPOSES OF SELECTING A HYPOTHETICAL RETIREMENT DATE FOR
SUCH RECOMPUTATION. IN THIS CONNECTION, WE UNDERSTAND THAT THE
SIGNIFICANCE OF SELECTING THE DATE SEPTEMBER 30, 1974, FOR 10 U.S.C.
1401A(F) RECOMPUTATION PURPOSES, IS THAT, IF THE MEMBERS DESCRIBED IN
SITUATIONS 1.A. AND 1.B. ARE PERMITTED TO USE SUCH DATE, THEY WOULD
RECEIVE THE GREATEST AMOUNT OF RETIRED OR RETAINER PAY DUE TO THE FACT
THAT THERE WERE TWO CONSUMER PRICE INDEX ADJUSTMENTS IN RETIRED OR
RETAINER PAY IN THE 12-MONTH PERIOD IMMEDIATELY PRIOR TO THE ACTIVE DUTY
PAY RATE CHANGE ON OCTOBER 1, 1974.
SUBSECTION 1401A(F) OF TITLE 10, UNITED STATES CODE, PROVIDES:
"(F) NOTWITHSTANDING ANY OTHER PROVISION OF LAW, THE MONTHLY RETIRED
OR RETAINER PAY OF A MEMBER OR A FORMER MEMBER OF AN ARMED FORCE WHO
INITIALLY BECAME ENTITLED TO THAT PAY ON OR AFTER JANUARY 1, 1971, MAY
NOT BE LESS THAN THE MONTHLY RETIRED OR RETAINER PAY TO WHICH HE WOULD
BE ENTITLED IF HE HAD BECOME ENTITLED TO RETIRED OR RETAINER PAY AT AN
EARLIER DATE, ADJUSTED TO REFLECT ANY APPLICABLE INCREASES IN SUCH PAY
UNDER THIS SECTION. IN COMPUTING THE AMOUNT OF RETIRED OR RETAINER PAY
TO WHICH SUCH A ME8ER WOULD HAVE BEEN ENTITLED ON THAT EARLIER DATE, THE
COMPUTATION SHALL, SUBJECT TO SUBSECTION (E) OF THIS SECTION, BE BASED
ON HIS GRADE, LENGTH OF SERVICE, AND THE RATE OF BASIC PAY APPLICABLE TO
HIM AT THAT TIME. THIS SUBSECTION DOES NOT AUTHORIZE ANY INCREASE IN
THE MONTHLY RETIRED OR RETAINER PAY TO WHICH A MEMBER WAS ENTITLED FOR
ANY PERIOD PRIOR TO THE EFFECTIVE DATE OF THIS SUBSECTION."
THAT PROVISION WAS INTRODUCED IN THE 94TH CONGRESS, 1ST SESSION, BY
SENATOR JOHN TOWER ON JUNE 4, 1975, AS AMENDMENT NO. 534, TO THE
DEPARTMENT OF DEFENSE AUTHORIZATION ACT (S. 920), AND INCORPORATED IN
HOUSE OF REPRESENTATIVES BILL, H.R. 6674, AND BECAME SECTION 806 OF
PUBLIC LAW 94-106, APPROVED OCTOBER 7, 1975, 88 STAT. 531, 538.
THERE WERE NO HEARINGS AND NO COMMITTEE REPORTS ON THE PROPOSAL OTHER
THAN BRIEF STATEMENTS IN THE CONFERENCE REPORTS ON H.R. 6674 WHICH
INDICATE THAT ITS ADOPTION WAS TO CORRECT THE SO-CALLED "RETIRED PAY
INVERSION." A MORE DETAILED STATEMENT OF THE PURPOSE OF THE PROVISION IS
INCLUDED IN THE REMARKS OF SENATOR TOWER AND OTHERS DURING FLOOR
DISCUSSION OF THE AMENDMENT SHORTLY BEFORE IT WAS APPROVED BY THE
SENATE. SENATOR TOWER STATED AT THAT TIME THAT INTRODUCTION OF THE
AMENDMENT WAS TO CORRECT THE WASTEFUL EARLY RETIREMENT OF MILITARY
PERSONNEL AND TO ENCOURAGE SERVICE MEMBERS "TO STAY ON (ACTIVE DUTY)
THROUGH THE MOST PRODUCTIVE PART OF THEIR CAREERS." IN EXPLANATION, IT
WAS STATED THAT A RETIRED PAY INVERSION HAD DEVELOPED BECAUSE RETIRED
PAY INCREASES-- WHICH ARE TIED TO THE CONSUMER PRICE INDEX-- HAD
EXCEEDED ACTIVE DUTY PAY RAISES IN RECENT YEARS, PARTICULARLY AMONG
HIGHER RANKING PERSONNEL. AS A RESULT, MANY MEMBERS WHO RETIRE AFTER
ACTIVE DUTY PAY RAISES, WOULD RECEIVE LESS RETIRED PAY THAN IF THEY
RETIRED BEFORE THE RAISES. THEREFORE, THE STATED PURPOSE WAS TO INSURE
THAT CAREER MEMBERS, BY REMAINING IN THE SERVICE, WOULD NOT SUFFER
PERMANENT AND POSSIBLY INCREASING LOSSES OF RETIRED PAY. SEE 121
CONG.REC.S. 9928 - S. 9933 (DAILY ED., JUNE 6, 1975) (REMARKS OF
SENATOR TOWER). IT IS NOTED THAT IN ADDITION TO THIS PROSPECTIVE EFFECT
THE AMENDMENT PROVIDED FOR INCREASED RETIRED PAY FOR MEMBERS ALREADY
RETIRED IF THEY HAD BEEN ADVERSELY AFFECTED BY THE "RETIRED PAY
INVERSION." FOR THAT PURPOSE THE MEMBERS COVERED WERE THOSE WHO WERE
"INITIALLY ENTITLED TO THAT PAY (RETIRED PAY) ON OR AFTER JANUARY 1,
1971."
WHEN THE LANGUAGE OF 10 U.S.C. 1401A(F) IS CONSIDERED IN TERMS OF
THAT EXPLANATION OF PURPOSE, IT IS EVIDENT THAT THE LEGISLATION IS FOR A
BENEFICIAL PURPOSE AND THAT THE MEMBERS TO WHOM THE BENEFIT IS DIRECTED
ARE THOSE WHO ARE ELIGIBLE TO RETIRE VOLUNTARILY AT ANY TIME, AND WISH
TO CONTINUE ON ACTIVE DUTY, BUT BECAUSE OF PROBABLE FINANCIAL LOSSES IN
RETIRED PAY WHICH THEY WOULD SUFFER SHOULD THEY REMAIN ON ACTIVE DUTY
AND RETIRE LATER, TERMINATE THEIR ACTIVE MILITARY CAREERS BY EXERCISING
THEIR RETIREMENT OPTION AT THE EARLIER DATE. THE BENEFITS OF THE
AMENDMENT ARE ALSO PROVIDED FOR RETIRED MEMBERS WHO RETIRED AFTER
JANUARY 1, 1971, AND WERE ADVERSELY AFFECTED BY THE "RETIRED PAY
INVERSION." IN VIEW OF THE BENEFICIAL NATURE OF THE AMENDMENT IT IS OUR
VIEW THAT THE PHRASE "INITIALLY BECOME ENTITLED TO THAT PAY" AS IT
RELATES TO THE PHRASE "MONTHLY RETIRED OR RETAINER PAY" AS USED IN 10
U.S.C. 1401A(F) SHOULD BE NARROWLY CONSTRUED TO RELATE ONLY TO RETIRED
PAY ENTITLEMENTS ACCRUING ON FINAL-TYPE RETIREMENTS.
THE PURPOSE FOR ESTABLISHING THE TDRL (10 U.S.C. 1202 AND 1205) WAS
TO AUTHORIZE A LIMITED RETIREMENT STATUS FOR MEMBERS OF THE ARMED FORCES
CALLED OR ORDERED TO ACTIVE DUTY AND WHO WHILE SERVING ON THAT DUTY ARE
DETERMINED TO HAVE BECOME UNFIT TO PERFORM SUCH DUTY BECAUSE OF PHYSICAL
DISABILITY WHICH MAY BE PERMANENT, BUT WHERE IT CANNOT BE DETERMINED
THAT DISABILITY IS IN FACT OF A PERMANENT NATURE. UNDER THE PROVISIONS
OF 10 U.S.C. 1210, AS IT RELATES TO THE COMMITTEE ACTION QUESTIONS, UPON
THE COMPLETION OF 5 YEARS ON THAT LIST, THE SECRETARY OF THE SERVICE
CONCERNED IS REQUIRED TO MAKE A FINAL DETERMINATION IN THE MEMBER'S CASE
(SUBSECTION (B)), AND UNDER SUBSECTIONS (C), (D) AND (F), IS REQUIRED TO
PLACE THE MEMBER ON THE PERMANENT DISABILITY RETIRED LIST, OR RETURN HIM
TO ACTIVE DUTY. FURTHER, UNDER SUBSECTION (H), UNLESS A MEMBER'S NAME
IS SOONER REMOVED FROM THE TDRL, SUCH RETIRED PAY TO WHICH HE IS
ENTITLED BY VIRTUE OF PLACEMENT ON THAT LIST IS TERMINATED.
FROM THE FOREGOING, IT IS CLEARLY EVIDENT THAT A TDRL STATUS IS ONE
WHICH CAN NEITHER BE CHOSEN BY THE MEMBER NOR IS IT FINAL. ADDITIONAL
ACTION MUST BE TAKEN BY THE SECRETARY CONCERNED TO FINALIZE THE AFFECTED
INDIVIDUAL'S STATUS AS A MEMBER OF THE SERVICE. THE GENERAL TERM
"RETIRED PAY" USED IN 10 U.S.C. 1401A(F), STANDING ALONE, WOULD APPEAR
TO INCLUDE RETIRED PAY RECEIVED WHILE ON THE TDRL. COMPARE 31 COMP.GEN.
213, 215 (1951) AND 38 COMP.GEN. 268, 276 (1958). HOWEVER, TO SO
INCLUDE TDRL RETIRED PAY WOULD CAUSE INEQUITIEIS TO THE LIMITED CLASS OF
MEMBERS INVOLVED, WHICH DO NOT APPEAR TO HAVE BEEN CONTEMPLATED BY THE
CONGRESS, AND APPEAR CONTRARY TO THE BENEFICIAL PURPOSE OF SECTION
1401A(F). THEREFORE, IT IS OUR VIEW THAT ENTITLEMENT TO RETIRED PAY BY
VIRTUE OF A MEMBER'S PLACEMENT ON THE TDRL IS NOT THE RETIRED PAY
ENTITLEMENT CONTEMPLATED IN 10 U.S.C. 1401A(F), AND THE FIRST QUESTION
IS ANSWERED IN THE NEGATIVE.
WITH REGARD TO THE SECOND QUESTION, IT IS TO BE NOTED THAT
COMPUTATION OF RETIRED PAY UNDER 10 U.S.C. 1401A(F) IS BASED ON DATES
WHICH ARE HYPOTHETICAL AND ARE COUCHED IN TERMS OF THAT "TO WHICH HE
WOULD BE ENTITLED IF HE HAD BECOME ENTITLED TO RETIRED OR RETAINER PAY
AT AN EARLIER DATE." THE PHRASEOLOGY, WHEN CONSIDERED IN CONTEXT OF THE
BEFORE-STATED PURPOSE OF THESE PROVISIONS, AUTHORIZES A RETIRED MEMBER
TO RECOMPUTE HIS RETIRED PAY AT THE PAY RATES AND YEARS OF SERVICE
APPLICABLE TO HIM AT AN EARLIER DATE WHEN HE COULD HAVE RETIRED, AS
THOUGH HE HAD RETIRED THEN. THEREFORE, AND IN VIEW OF THE ANSWER TO
QUESTION 1, IN THE SITUATIONS DESCRIBED IN THE COMMITTEE ACTION, THE
DATE, SEPTEMBER 30, 1974, MAY BE USED IN COMPUTING THE MEMBERS' RETIRED
PAY UNDER 10 U.S.C. 1401A(F), ALTHOUGH THEY WERE ON THE TDRL ON THAT
DATE. QUESTION 2 IS ANSWERED IN THE AFFIRMATIVE.
B-188534, OCTOBER 13, 1977
HEADNOTES - UNAVAILABLE
EMPLOYEE RETIRED FROM POSITION IN HAWAII IN 1973, PLACED HIS
HOUSEHOLD GOODS IN STORAGE IN 1974, BUT DID NOT SHIP HIS GOODS TO
CALIFORNIA UNTIL 1976. EMPLOYEE IS NOT ENTITLED TO REIMBURSEMENT FOR
TRANSPORTATION OF HOUSEHOLD GOODS SINCE TRANSPORTATION DID NOT BEGIN
WITHIN 2-YEAR TIME LIMITATION IN FEDERAL TRAVEL REGULATIONS, PARA.
2-1.5A(2). FURTHERMORE, GOVERNMENT IS NOT BOUND BY UNAUTHORIZED OR
INCORRECT STATEMENTS OF ITS AGENTS.
WILLIAM J. BUCKINGHAM - REIMBURSEMENT FOR SHIPMENT OF HOUSEHOLD
GOODS:
THIS ACTION IS IN RESPONSE TO THE APPEAL OF THE SETTLEMENT ISSUED
JANUARY 21, 1977, BY OUR CLAIMS DIVISION CONCERNING THE CLAIM OF MR.
WILLIAM J. BUCKINHAM FOR REIMBURSEMENT OF CHARGES INCIDENT TO THE
SHIPMENT OF HIS HOUSEHOLD GOODS.
BRIEFLY STATED, THE RECORD INDICATES THAT MR. BUCKINGHAM RETIRED ON
MEDICAL DISABILITY EFFECTIVE APRIL 23, 1973, FROM A POSITION WITH THE
FEDERAL AVIATION ADMINISTRATION (FAA) IN HONOLULU, HAWAII. MR.
BUCKINGHAM REQUESTED AND RECEIVED AN EXTENSION ON THE TIME LIMITATION
FOR TRAVEL AND SHIPMENT OF HIS PRIVATELY OWNED VEHICLE, AND AT THAT TIME
HE INDICATED THAT HIS HOUSEHOLD GOODS WOULD BE SHIPPED BY APRIL 30,
1974. THE RECORD INDICATES FURTHER THAT MR. BUCKINGHAM'S HOUSEHOLD
GOODS WERE PICKED UP BY THE COMMON CARRIER ON APRIL 8, 1974, BUT WERE
NOT DELIVERED TO THE DESTINATION POINT IN CALIFORNIA UNTIL JANUARY 20,
1976. OUR CLAIMS DIVISION SETTLEMENT DENIED MR. BUCKINGHAM'S CLAIM
SINCE, UNDER THE APPLICABLE PROVISIONS OF THE FEDERAL TRAVEL
REGULATIONS, THE CARRIER HAD NOT RECEIVED THE GOODS WITH AN ORDER TO
FORWARD THEM TO A PARTICULAR DESTINATION WITHIN THE 2-YEAR TIME
LIMITATION.
ON APPEAL MR. BUCKINGHAM STATES THAT HE DOES NOT ASK THAT THE
REGULATIONS BE MODIFIED OR WAIVED IN HIS CASE, BUT HE REQUESTS
RECONSIDERATION ON THE BASIS THAT HE WAS MISINFORMED BY A FAA OFFICIAL
THAT HE HAD UNTIL APRIL 1, 1976, IN WHICH TO SHIP HIS HOUSEHOLD GOODS.
UNDER THE APPLICABLE PROVISIONS OF THE FEDERAL TRAVEL REGULATIONS
(FTR), PARA. 2-1.5A(2) ( MAY 1973), THE TRANSPORTATION OF AN EMPLOYEE'S
HOUSEHOLD GOODS MUST BEGIN WITHIN 2 YEARS FROM THE EFFECTIVE DATE OF THE
EMPLOYEE'S TRANSFER WHICH IN THIS CASE WAS APRIL 23, 1973; THAT IS, THE
CARRIER MUST RECEIVE THE GOODS WITH AN ORDER TO FORWARD THEM TO A
PARTICULAR DESTINATION. PETER E. DONNELLY, B-188292, JULY 8, 1977; AND
VIRGIL G. TRICE, B-181360, JANUARY 22, 1975. THESE REGULATIONS HAVE THE
FORCE AND EFFECT OF LAW AND MAY NOT BE WAIVED OR MODIFIED BY EITHER OUR
OFFICE OR BY THE AGENCY. DONNELLY, SUPRA; AND DALE R. MOORE, B-184676,
NOVEMBER 17, 1975.
MR. BUCKINGHAM'S APPEAL IS BASED UPON THE ERRONEOUS INFORMATION
SUPPLIED BY AN OFFICIAL OF THE FAA WHO, THINKING THAT MR. BUCKINGHAM'S
RETIREMENT DATE WAS THE SAME AS THE DATE OF HIS TRAVEL ORDER, APRIL 1,
1974, ADVISED MR. BUCKINGHAM ON FEBRUARY 7, 1975, THAT HIS HOUSEHOLD
GOODS MUST BE SHIPPED PRIOR TO APRIL 1, 1976. IT IS UNFORTUNATE THAT
MR. BUCKINGHAM WAS MISINFORMED AS TO THE TIME LIMITATION FOR SHIPPING
HIS HOUSEHOLD GOODS, BUT IT IS A WELL-SETTLED RULE OF LAW THAT THE
GOVERNMENT CANNOT BE BOUND BY THE UNAUTHORIZED OR INCORRECT STATEMENTS
OF ITS AGENTS. SEE ELTON L. SMALLEY, B-181311, AUGUST 21, 1974, AND
COURT CASES CITED THEREIN.
ACCORDINGLY, WE SUSTAIN THE ACTION OF OUR CLAIMS DIVISION IN
DISALLOWING MR. BUCKINGHAM'S CLAIM.
B-188970, OCTOBER 13, 1977
HEADNOTES - UNAVAILABLE
INCIDENT TO TRANSFER EMPLOYEE SOLD HOME AT OLD STATION WITHOUT USE OF
REALTOR. EMPLOYEE SUBSEQUENTLY RETAINED ATTORNEY TO PREPARE DOCUMENTS
AND HANDLE SETTLEMENT OF TRANSACTION. SINCE ATTORNEY CONDUCTED
SETTLEMENT, AS DISTINGUISHED FROM MERE ATTENDANCE IN ADVISORY CAPACITY,
ATTORNEY'S FEE FOR CONDUCTING SETTLEMENT MAY BE REIMBURSED.
PATRICK J. KELLY - ATTORNEY'S FEE:
BY A LETTER DATED JUNE 6, 1977, MR. D. E. COX, AN AUTHORIZED
CERTIFYING OFFICER OF THE DEPARTMENT OF JUSTICE, FEDERAL BUREAU OF
INVESTIGATION (FBI), REQUESTED OUR DECISION CONCERNING A VOUCHER
SUBMITTED BY MR. PATRICK J. KELLY, AN FBI EMPLOYEE. MR. KELLY HAS
REQUESTED REIMBURSEMENT OF AN ATTORNEY'S FEE INCURRED IN CONNECTION WITH
THE SALE OF HIS FORMER RESIDENCE INCIDENT TO HIS TRANSFER FROM
PHILADELPHIA, PENNSYLVANIA, TO HARRISBURG, PENNSYLVANIA.
THE RECORD SHOWS THAT MR. KELLY ACCOMPLISHED THE SALE OF THE
RESIDENCE WITHOUT THE USE OF A REAL ESTATE AGENCY, AND SUBSEQUENTLY
RETAINED AN ATTORNEY, HERSH KOZLOV, ESQ., TO DRAFT THE DOCUMENTS AND
PERFORM THE FUNCTIONS NECESSARY TO A CONSUMMATION OF THE TRANSACTION.
THE ATTORNEY SUBMITTED A STATEMENT DATED SEPTEMBER 20, 1976, TO MR.
KELLY FOR THE FOLLOWING CHARGES:
PREPARATION OF DEED . . . . . . . . . . . . . .$ 35.00
PREPARATION OF AGREEMENT OF SALE. . . . . . . . 65.00
ATTENDANCE AT SETTLEMENT. . . . . . . . . . . . 100.00
TOTAL . . . . . . . . . . . . . . . . . . . . .$200.00
MR. KELLY WAS REIMBURSED $100 FOR THE PREPARATION OF DOCUMENTS, BUT
THE $100 CHARGE FOR ATTENDANCE AT SETTLEMENT WAS ADMINISTRATIVELY DENIED
AS BEING AN ADVISORY SERVICE. HE RECLAIMED THE SUSPENDED $100 CHARGE
AND THE MATTER WAS REFERRED BY THE CERTIFYING OFFICER TO THIS OFFICE FOR
A DECISION.
STATUTORY AUTHORITY FOR REIMBURSEMENT OF THE LEGAL EXPENSES OF
RESIDENCE TRANSACTIONS OF TRANSFERRED EMPLOYEES IS FOUND AT 5 U.S.C.
5724A (1970). REGULATIONS IMPLEMENTING THAT AUTHORITY AT THE TIME OF
MR. KELLY'S TRANSFER WERE CONTAINED IN PARAGRAPH 2-6.2C OF THE FEDERAL
TRAVEL REGULATIONS (FPMR 101-7, MAY 1973). IN OUR RECENT DECISION IN
THE MATTER OF GEORGE W. LAY, B-185976, APRIL 27, 1977, 56 COMP.GEN. 561,
WE REVIEWED THE POLICY CONCERNING THE EXTENT TO WHICH LEGAL FEES MAY BE
REIMBURSED. IN THAT DECISION WE HELD THAT NECESSARY AND REASONABLE
LEGAL FEES AND COSTS, EXCEPT FOR THE FEES AND COSTS OF LITIGATION,
INCURRED BY REASON OF THE PURCHASE OR SALE OF A RESIDENCE INCIDENT TO A
PERMANENT CHANGE OF STATION MAY BE REIMBURSED PROVIDED THAT THE COSTS
ARE WITHIN THE CUSTOMARY RANGE OF CHARGES FOR SUCH SERVICES WITHIN THE
LOCALITY OF THE RESIDENCE TRANSACTION. SINCE, HOWEVER, OUR DECISION IN
LAY WILL BE APPLIED PROSPECTIVELY ONLY TO CASES IN WHICH SETTLEMENT OF
THE TRANSACTION OCCURS ON OR AFTER APRIL 27, 1977, THE PRESENT MATTER
MUST BE DETERMINED IN ACCORDANCE WITH THE PREVIOUSLY APPLICABLE LAWS AND
DECISIONS.
OUR PREVIOUS DECISIONS CONCERNING THE REIMBURSEMENT OF LEGAL FEES
CONSISTENTLY HELD THAT ONLY LEGAL SERVICES OF THE TYPE ENUMERATED IN FTR
PARA. 2-6.2C COULD BE REIMBURSED, AND THAT NO REIMBURSEMENT COULD BE
MADE FOR LEGAL SERVICES WHICH ARE ADVISORY IN NATURE. THOSE DECISIONS
HELD THAT AN ATTORNEY'S FEE CHARGED FOR MERELY ATTENDING A SETTLEMENT TO
REPRESENT AN EMPLOYEE IN AN ADVISORY CAPACITY MAY NOT BE REIMBURSED.
HOWEVER, A FEE CHARGED FOR ACTUALLY CONDUCTING THE SETTLEMENT MAY BE
REIMBURSED. JOHN O. BORDER, B-184599, SEPTEMBER 16, 1975. WE HAVE BEEN
INFORMALLY ADVISED THAT IN THE PRESENT CASE, THE ATTORNEY CONDUCTED THE
SETTLEMENT AT THIS OFFICE, EFFECTING THE PROPER EXCHANGE OF DOCUMENTS
AND ENSURING THE PROPER DISTRIBUTION OF MONEY. IN THESE CIRCUMSTANCES,
WE HOLD THAT THE ATTORNEY IN FACT CONDUCTED THE CLOSING, AS
DISTINGUISHED FROM A PASSIVE ATTENDANCE IN AN ADVISORY CAPACITY.
THEREFORE, PURSUANT TO OUR DECISION IN BORDER, THE LEGAL FEE CHARGED FOR
THAT SERVICE MAY BE REIMBURSED.
ACCORDINGLY, THE VOUCHER MAY, IF OTHERWISE PROPER, BE CERTIFIED FOR
PAYMENT.
B-189093, OCTOBER 13, 1977
HEADNOTES - UNAVAILABLE
TRANSFERRED EMPLOYEE BOUGHT HOUSE AT NEW STATION, PAYING FOR OWNER'S
TITLE INSURANCE POLICY, TERMITE INSPECTION, AND ESCROW COSTS. ACCORDING
TO LOCAL CUSTOM, HOWEVER, SELLER SHOULD HAVE PAID FOR OWNER'S TITLE
POLICY, TERMITE INSPECTION, AND ONE-HALF OF THE ESCROW CHARGES. SINCE
UNDER 5 U.S.C. 5724A(A)(4) REIMBURSEMENT OF RESIDENCE TRANSACTION
EXPENSES MAY NOT EXCEED THE FEES CUSTOMARILY CHARGED IN THE LOCALITY OF
THE RESIDENCE, EMPLOYEE MAY BE REIMBURSED ONLY FOR ONE-HALF OF ESCROW
FEES, AND NOTHING FOR THE TITLE POLICY OR TERMITE INSPECTION.
DONALD J. SHARP - RESIDENCE PURCHASE EXPENSES:
BY A LETTER DATED MAY 13, 1977, MR. H. FRANK HANN, DIRECTOR OF
FINANCIAL MANAGEMENT, NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
(NASA), REQUESTED OUR DECISION CONCERNING THE VOUCHER OF MR. DONALD J.
SHARP, A NASA EMPLOYEE FOR ADDITIONAL RESIDENCE TRANSACTION EXPENSES.
THE RECORD INDICATES THAT ON JULY 18, 1976, MR. SHARP WAS TRANSFERRED
FROM THE KENNEDY SPACE CENTER, FLORIDA, TO THE DRYDEN FLIGHT RESEARCH
CENTER AT EDWARDS, CALIFORNIA. IN CONNECTION WITH THE PURCHASE OF A
RESIDENCE AT HIS NEW HEADQUARTERS, MR. SHARP CLAIMED, AMONG OTHER
EXPENSES, THE FOLLOWING ITEMS:
MORTGAGE TITLE INSURANCE POLICY . . . . . .$316.50
ESCROW FEE . . . . . . . . . . . . . . . . . 224.00
TERMITE INSPECTION . . . . . . . . . . . . . 35.00
TOTAL. . . . . . . . . . . . . . . . . . . .$575.50
OF THAT SUM $463.50, REPRESENTING THE TITLE POLICY, TERMITE
INSPECTION, AND ONE-HALF OF THE ESCROW FEE, WAS ADMINISTRATIVELY
DISALLOWED AS NOT BEING CUSTOMARILY PAID BY THE BUYER IN THE LOCALITY
WHERE THE PROPERTY IS LOCATED. THIS ACTION WAS BASED UPON THE ADVISE OF
THE FEDERAL HOUSING ADMINISTRATION CONCERNING THE CUSTOMARY PRACTICES
REGARDING REAL ESTATE EXPENSES IN THE LOCALITY. IN RECLAIMING THE
SUSPENDED AMOUNT, MR. SHARP CONTENDS THAT HE WAS GIVEN ERRONEOUS,
MISLEADING ADVICE CONCERNING THE EXTENT TO WHICH REAL ESTATE EXPENSES
WOULD BE REIMBURSED. IN PARTICULAR, MR. SHARP STATES THAT THE ONLY
ADVICE WHICH HE RECEIVED CONCERNING REAL ESTATE COSTS WAS A WRITTEN
DISCUSSION PAPER WHICH PROVIDED THAT REIMBURSEMENT UPON PURCHASE OF A
RESIDENCE WOULD BE AS FOLLOWS:
"NOT TO EXCEED 5% OF PURCHASE PRICE OF $2500 WHICHEVER IS SMALLER.
(INCLUDES LEGAL FEES, CREDIT REPORTS, TITLE POLICY, ESCROW AGENT'S FEE,
REVENUE STAMPS, AND OTHER INCIDENTAL EXPENSES)."
MR. SHARP THUS CONTENDS THAT HE WAS NEVER ADVISED THAT REIMBURSEMENT
OF CERTAIN COSTS WOULD BE LIMITED TO THE AMOUNTS CUSTOMARILY INCURRED
AND PAID IN THE LOCALITY OF HIS NEW RESIDENCE. HE THEREFORE CONCLUDES
THAT HE SHOULD BE REIMBURSED FOR;IS ACTUAL EXPENSES.
STATUTORY AUTHORITY FOR REIMBURSEMENT OF THE RESIDENCE TRANSACTION
EXPENSES OF TRANSFERRED EMPLOYEES IF FOUND AT 5 U.S.C. 5724A(A)(4)
(1970), WHICH PROVIDES IN PERTINENT PART AS FOLLOWS:
"EXPENSES OF THE SALE OF THE RESIDENCE (OR THE SETTLEMENT OF AN
UNEXPIRED LEASE) OF THE EMPLOYEE AT THE OLD STATION AND PURCHASE OF A
HOME AT THE NEW OFFICIAL STATION REQUIRED TO BE PAID BY HIM WHEN THE OLD
AND NEW OFFICIAL STATIONS ARE LOCATED WITHIN THE UNITED STATES, ITS
TERRITORITIES OR POSSESSIONS, THE COMMONWEATH OF PUERTO RICO, OR THE
CANAL ZONE. HOWEVER, REIMBURSEMENT FOR BROKERAGE FEES ON THE SALE OF
THE RESIDENCE AND OTHER EXPENSES UNDER THIS PARAGRAPH MAY NOT EXCEED
THOSE CUSTOMARILY CHARGE IN THE LOCALITY WHERE THE RESIDENCE IS LOCATED,
AND REIMBURSEMENT MAY NOT BE MADE FOR LOSSES ON THE SALE OF THE
RESIDENCE."
THIS LIMITATION HAS BEEN CARRIED FORWARD INTO THE IMPLEMENTING
PROVISIONS OF THE FEDERAL TRAVEL REGULATIONS (FPMR 101-7, MAY 1973)
WHICH PROVIDE IN PERTINENT PART AT PARAGRAPH 2-6.2D AS FOLLOWS:
" * * * THE COST OF A MORTGAGE TITLE POLICY PAID FOR BY THE EMPLOYEE
ON A RESIDENCE PURCHASED BY HIM IS REIMBURSABLE BUT COSTS OF OTHER TYPES
OF INSURANCE PAID FOR BY HIM SUCH AS AN OWNER'S TITLE POLICY, A 'RECORD
TITLE' POLICY, MORTGAGE INSURANCE, AND INSURANCE AGAINST DAMAGE OR LOSS
OF PROPERTY, ARE NOT REIMBURSABLE ITEMS OF EXPENSE. * * * "
BASED UPON THE STATUTORY LIMITATION, OUR DECISIONS CONCERNING
REIMBURSEMENT OF TITLE INSURANCE PREMIUM HAVE BURNED ON WHETHER SUCH
PAYMENTS ARE CUSTOMARY IN THE LOCALITY OF THE RESIDENCE. THUS, WE HAVE
HELD THAT WHERE AN OWNER'S TITLE INSURANCE POLICY IS NOT GENERALLY
REQUIRED FOR LOAN ASSUMPTIONS IN THE LOCALITY OF THE TRANSACTION,
REIMBURSEMENT OF SUCH AN EXPENSE WOULD NOT BE PROPER WHERE AN EMPLOYEE
ASSUMED AN OUTSTANDING LOAN UPON PURCHASE OF A RESIDENCE. B-174011,
NOVEMBER 15, 1971. HOWEVER, WHERE A PURCHASER MUST OBTAIN AN OWNER'S
TITLE POLICY AS A LEGAL PREREQUISITE TO THE TRANSFER OF PROPERTY OR TO
OBTAINING FINANCING INCIDENT TO SUCH A TRANSFER, REIMBURSEMENT MAY BE
MADE IF THE PREMIUM IS CUSTOMARILY PAID BY THE PURCHASER IN THE LOCALITY
INVOLVED. MATTER OF CARL F. WILSON, B-186579, OCTOBER 28, 1976.
FINALLY, PURSUANT TO FTR PARAGRAPH 2-6.3C (MAY 1973), TECHNICAL
ASSISTANCE IN DETERMINING THE REASONABLENESS OF AN EXPENSE MAY BE
OBTAINED FROM THE LOCAL OR AREA OFFICE OF THE DEPARTMENT OF HOUSING AND
URGAN DEVELOPMENT, (HUD) SERVING THE AREA IN WHICH THE EXPENSE OCCURRED.
IN THE PRESENT CASE, MR. SHARP OBTAINED A CALIFORNIA LAND TITLE
ASSOCIATION (CLTA) POLICY, WHICH IS COMMONLY REGARDED IN THE STATE AS AN
OWNER'S TITLE POLICY. PURSUANT TO FTR PARA. 2-6.3C, THE AGENCY WAS
INFORMED BY HUD, AND WE HAVE CONFIRMED, THAT IN THE LOCALITY OF EDWARDS,
CALIFORNIA, THE PREMIUM FOR THE CLTA POLICY IS PAID BY THE SELLER.
FURTHER, A LENDER'S OR MORTGAGE TITLE POLICY IS NOT REQUIRED WHERE THE
BUYER ASSUMES AN EXISTING MORTGAGE. IN VIEW OF THE CUSTOM WHICH
REQUIRES SELLERS TO PAY FOR AN OWNER'S TITLE POLICY IN THE LOCALITY OF
THE TRANSACTION, THE $316.50 PAID BY MR. SHARP FOR AN OWNER'S TITLE
POLICY MAY NOT BE REIMBURSED.
AUTHORITY FOR REIMBURSEMENT OF FEES FOR ESCROW SERVICES AND TERMITE
INSPECTIONS IS GENERALLY PROVIDED IN FTR PARA. 2-6.2F WHICH STATES:
"F. OTHER EXPENSES OF SALE AND PURCHASE OF RESIDENCES. INCIDENTAL
CHARGES MADE FOR REQUIRED SERVICES IN SELLING AND PURCHASING RESIDENCES
MAY BE REIMBURSABLE IF THEY ARE CUSTOMARILY PAID BY THE SELLER OF A
RESIDENCE AT THE OLD OFFICIAL STATION, OR IF CUSTOMARILY PAID BY THE
PURCHASER OF A RESIDENCE AT THE NEW OFFICIAL STATION, TO THE EXTENT THEY
DO NOT EXCEED AMOUNTS CUSTOMARILY CHARGED IN THE LOCALITY OF THE
RESIDENCE."
THE AGENCY WAS ADVISED BY HUD, AND WE HAVE CONFIRMED, THAT IN THE
RELEVANT LOCALITY, THE SELLER PAYS FOR THE TERMITE INSPECTION AND THE
BUYER AND SELLER EVENLY DIVIDE THE COST OF ESCROW SERVICES. SINCE MR.
SHARP HAS ALREADY BEEN ALLOWED THE MAXIMUM CUSTOMARY REIMBURSEMENT FOR
THESE SERVICES, HIS CLAIM FOR FURTHER PAYMENT IS DENIED.
FINALLY, MR. SHARP CLAIMS THAT HE WAS NOT INFORMED THAT REIMBURSEMENT
FOR RESIDENCE TRANSACTION EXPENSES IS LIMITED TO WHAT IS CUSTOMARY IN
THE LOCALITY OF THE RESIDENCE. THE AGENCY, HOWEVER, STATES THAT THE
DISCUSSION PAPER PROVIDED TO THE EMPLOYEES WAS INTENDED ONLY FOR GENERAL
GUIDANCE. WHILE IT IS UNFORTUNATE THAT MR. SHARP MAY NOT HAVE BEEN
FULLY APPRAISED OF THE STATUTORY LIMITATION ALL GOVERNMENT OFFICERS AND
EMPLOYEES ARE SPECIAL AGENTS OF LIMITED AUTHORITY AND ALL PERSONS
DEALING WITH SUCH AGENTS AND EMPLOYEES ARE CHARGED WITH NOTICE THEREOF
AND OF THE LIMITATIONS UPON THE AUTHORITY OF THE AGENTS WITH WHICH THEY
DEAL. B-179635, MARCH 20, 1974. IT IS WELL SETTLED THAT IN THE ABSENCE
OF SPECIFIC STATUTORY AUTHORITY, THE GOVERNMENT IS NOT LIABLE FOR THE
NEGLIGENT ACTS OR OMISSIONS OF ITS OFFICERS AND EMPLOYEES, NOR IS IT
BOUND BY OR RESPONSIBLE FOR THEIR UNAUTHORIZED OR INCORRECT STATEMENTS.
ROBERTSON V. SICHEL, 127 U.S. 507, 515 (1888); GERMAN BANK OF MEMPHIS
V. UNITED STATES, 148 U.S. 573, 579 (1893); 22 COMP.GEN. 221 (1942);
44 ID. 337 (1964); 56 ID. 85 (1976).
ACCORDINGLY, THE VOUCHER MAY NOT BE CERTIFIED FOR PAYMENT.
B-189102, OCTOBER 13, 1977
HEADNOTES - UNAVAILABLE
1. IRREVOCABLE LETTER OF CREDIT CONSTITUTES ACCEPTABLE FORM OF BID
GUARANTEE UNDER PARAGRAPH 4 OF STANDARD FORM 22.
2. BID OFFERED ON UNIT BASIS OTHER THAN THAT SPECIFIED BY IFB DOES
NOT RENDER BID NONRESPONSIVE SINCE CONTRACTING OFFICER COULD CONVERT
UNIT BY APPLYING STANDARD MATHEMATICAL COMPUTATION AND EVALUATE BID ON
BASIS SOUGHT IN IFB.
3. CORRECTION OF APPARENT CLERICAL AND OTHER MINOR ERRORS IN BID IS
PERMISSIBLE WHEN INTENDED BID IS CLEAR FROM FACE OF BID AND BIDDER
VERIFIED INTENDED BID.