MAY 23 (legislative day, APRIL 24), 1940.-Ordered to be printed

Mr. ELLENDER, from the Committee on Claims, submitted the

following

REPORT

[To accompany S. 3903]

The Committee on Claims, to whom was referred the bill (S. 3903) for the relief of Maj. L. P. Worrall, and for other purposes, having considered the same, report favorably thereon with the recommendation that the bill do pass with the following amendment:

Strike out all after the enacting clause and insert in lieu thereof the following:

That the Comptroller General of the United States be, and he is hereby' authorized and directed to credit in the accounts of Major L. P. Worrall, Finance Department, the sum of $3,066.03, public funds for which he is accountable, which sum was paid by him to King & Booser, Anniston, Alabama, pursuant to change order "B", dated August 23, 1938, modifying contract numbered W-58QM-CIV-59, dated June 29, 1939, and which sum has been disallowed by the Comptroller General of the United States: Provided, That the Secretary of the Treasury be, and he is hereby, authorized and directed to pay, out of any money in the Treasury not otherwise appropriated, to the said King & Booser a sum equal to any amount withheld or deducted from any amounts otherwise due to the said King & Booser on account of the payment which is herein validated, upon presentation of a claim therefor to the Comptroller General of the United States, who is authorized and directed to certify same to the Secretary of the Treasury for payment: Provided, That no part of the amount appropriated in this Act in excess of 10 per centum thereof shall be paid or delivered to or received by any agent or attorney on account of services rendered in connection with this claim, and the same shall be unlawful, any contract to the contrary notwithstanding. Any person violating the provisions of this Act shall be deemed guilty of a misdemeanor and upon conviction thereof shall be fined in any sum not exceeding $1,000.

The facts are fully set forth in House Report No. 2130, Seventysixth Congress, third session, which is appended hereto and made a part of this report.

[H. Rept. No. 2130, 76th Cong., 3d sess.)

The Committee on Claims, to whom was referred the bill (H. R. 8429) for the relief of Maj. L. P. Worrall, and for other purposes, having considered the same, report favorably thereon with an amendment and recommend that the bill, as amended, do pass.

The amendment is as follows:

Strike out all after the enacting clause and insert in lieu thereof the following: "That the Comptroller General of the United States be, and he is hereby, authorized and directed to credit in the accounts of Major L. P. Worrall, Finance Department, the sum of $3,066.03, public funds for which he is accountable, which sum was paid by him to King & Booser, Anniston, Alabama, pursuant to change order "B", dated August 23, 1938, modifying contract numbered W-58QM-CIV-59, dated June 29, 1939, and which sum has been disallowed by the Comptroller General of the United States: Provided, That the Secretary of the Treasury be, and he is hereby, authorized and directed to pay, out of any money in the Treasury not otherwise appropriated, to the said King & Booser a sum equal to any amount withheld or deducted from any amounts otherwise due to the said King & Booser on account of the payment which is herein validated, upon presentation of a claim therefor to the Comptroller General of the United States, who is authorized and directed to certify same to the Secretary of the Treasury for payment: Provided, That no part of the amount appropriated in this Act in excess of 10 per centum thereof shall be paid or delivered to or received by any agent or attorney on account of services rendered in connection with this claim, and the same shall be unlawful, any contract to the contrary notwithstanding. Any person violating the provisions of this Act shall be deemed guilty of a misdemeanor and upon conviction thereof shall be fined in any sum not exceeding $1,000." This bill would correct an injustice that has been done Maj. L. P. Worrall, who was the former finance officer of the Quartermaster Corps of the United States Army, at Fort Sam Houston, Tex., during 1938.

Maj. W. L. Bartley, of the Quartermaster Corps, at Fort Sam Houston, Tex.. was the duly designated purchasing and contracting officer. He held that under contract numbered W-58-QM-CÏV-59, the true intent and meaning of the plans and specifications were that the vestibules and skirting were included in the contract. The contractors, King & Boozer, protested this decision by a letter addressed to Major Bartley, and requested that the matter be referred to the Quartermaster General. This was done; the office of the Quartermaster General held that the vestibules and skirtings were not included in the contract, and instructed the contracting officer, Major Bartley, that if the vestibules were required, a change order should be placed on the contract covering such vestibules as are required. Accordingly, Major Bartley issued change order "B' under date of August 23, 1938, providing for the furnishing of vestibules and skirtings at an increase of $3,097 in the contract price, in accordance with unit prices in the contractor's bid. A letter written by the Secretary of War to the Comptroller General, under date of July 5, 1939, requested that credit be allowed for payments made under the change order. Copy of such letter is hereto attached.

The Comptroller General disallowed credit for the payment made under change order "B", assigning as ground that the decision of the contracting officer was irrevocable and not subject to review by his superior officer, the quartermaster general.

The amount of $3,066.03 was paid the contractors, King & Boozer, under change order "B" on September 8, 1938, but under the Comptroller General's ruling refund of this sum has been demanded of the contractors, and may be deducted from any moneys due them from any other contract with the Government.

The dual purpose of this bill is therefore to expunge this technical charge against both Major Worrall and the contractors, King & Boozer.

Appended hereto are the reports of the War Department and the Comptroller General.

Hon. AMBROSE J. KENNEDY,

WAR DEPARTMENT, Washington, April 3, 1940.

Chairman, Committee on Claims, House of Representatives,

Washington, D. C.

DEAR MR. KENNEDY: Careful consideration has been given to the bill H. R. 8429, Seventy-sixth Congress, third session, for the relief of Maj. L. P. Worrall, and for other purposes, which you transmitted to the War Department under date of February 19, 1940, with request for information and the views of the Department relative thereto.

The purpose of the proposed legislation is to credit in the accounts of Maj. L. P. Worrall, Finance Department, the sum of $3,066.03, public funds for which he is accountable and which sum was disallowed by the Comptroller General of

the United States on account of a payment made by him to King & Boozer, of Anniston, Ala., and to direct the Treasurer of the United States to pay to the said King & Boozer a sum equal to any amount withheld or deducted from amounts otherwise due on account of this payment.

The facts in this case, as adduced from the evidence of record, establish that on June 18, 1938, Maj. W. L. Bartley, Quartermaster Corps, United States Army, as the duly designated purchasing and contracting officer for the Eighth Corps Area, representing the Quartermaster General of the Army in matters pertaining to certain functions of his office, entered into contract No. W-58-QM-CIV-59 with the firm of King & Boozer, Anniston, Ala., for the fabrication, and delivery to designated places, of 19 units of portable and demountable buildings. By the terms of the contract it was provided that—

“Unless otherwise specifically set forth, the contractor shall furnish all materials, labor, etc., necessary to complete the work fully according to the true intent and meaning of the drawings and specifications, of which intent and meaning the contracting officer shall be the interpreter.' [Italics supplied.]

By letter of July 12, 1938, the contractors requested Major Bartley's decision as to whether under the terms of the contract they were required to furnish vestibules and skirting for certain buildings in each of the units. Acting under the authority of the above-quoted provision of the contract, Major Bartley in a letter to King & Booser, dated July 14, 1938, ruled that the true meaning and intent of the plans and specifications were that the vestibules and skirtings were included within the terms of the contract.

On July 19, 1938, King & Booser wrote to Major Bartley, protesting his interpretation as set forth above, and requested that the matter be referred to the Quartermaster General for a ruling. In compliance with their request, Major Bartley referred the letter to the Quartermaster General on August 6, 1938, with the recommendation that the protest be disallowed, since it was the intent of his office that the vestibules and skirtings, the cost of which amounted to $3,097, were to be included within the terms of the contract. Upon review, the Quartermaster General advised King & Booser by wire on August 15, 1938, that the quartermaster, Eighth Corps Area, was being instructed that there was no requirement under the terms of the bid to furnish the vestibules (and skirting) and that any such vestibules furnished would be paid for as provided in the contractor's bid. On the same date the Assistant Quartermaster General advised the quartermaster, Eighth Corps Area, that his (Major Bartley's) interpretation did not agree with that of the Office of the Quartermaster General and that if the vestibules were required a change order should be placed on the contract covering such vestibules as were required. This action was taken by Major Bartley by change order "B" and a properly certified voucher was presented to Maj. L. P. Worrall, Finance Department, for payment in the amount of $3,097, in accordance with unit prices included in the contract. Accordingly, payment in the amount of $3,066.03 ($3,097, less 1 percent cash discount) was made to the contractor by Major Worrall on September 8, 1938.

Upon review in the General Accounting Office, Audit Division, exception to the payment made under change order "B" was noted by that office on the ground that the Quartermaster General was without authority to modify the decision of the contracting officer. On July 5, 1939, the War Department addressed a letter to the Comptroller General requesting a review of the disallowance by his office, since the decision was entirely inconsistent with established principles governing the action of contracting officers. The letter stated that it was "the opinion of the War Department that the Quartermaster General properly found that the contract did not contemplate that skirting and vestibules were included as an integral part of the buildings and that the contractor was not required to furnish such skirting and vestibules without additional compensation. The Comptroller General's attention was called to the fact that since the specifications were prepared in the office of the Quartermaster General it was incumbent upon that office to clarify any questions of interpretation which might be brought to his attention.

On September 15, 1939, the Comptroller General replied to the Department's letter of July 5 in which he reaffirmed the previous findings and declined to allow credit for the payment on the ground that the decision of the contracting officer was irrevocable and not subject to review by his superior officer, the Quartermaster General.

In view of the decision of the Comptroller General above referred to there now stands suspended in the accounts of Major Worrall the amount of $3,066.03, which amount was paid by him in good faith. It is the opinion of the War Department that the material in question was required, that the contract was properly changed,

S. Repts., 76-3, vol. 3—4

and that the Government received full value for the funds expended on change order "B."

In view of the circumstances appearing in this case and in simple justice to a public servant, the War Department recommends the enactment of the proposed legislation. However, it is suggested that the bill be amended as recommended in the attached draft.

Sincerely yours,

The COMPTROLLER GENERAL OF THE UNITED STATES,

LOUIS JOHNSON, Acting Secretary of War.

Washington, D. C.

JULY 5, 1939.

DEAR MR. COMPTROLLER GENERAL: Attention is invited to the enclosed copy of letter dated May 23, 1939, from the General Accounting Office, Audit Division, to the Quartermaster General, in which it is stated that credit may not be allowed, on the present record, for payments made under change order "B" to contract No. W-58-Qm-CIV-59, with King & Boozer, Anniston, Ala. The statement made therein that the Quartermaster General was without authority to modify the decision of the contracting officer appears to be so inconsistent with established principles governing the actions of contracting officers as to warrant the careful consideration of your office.

The enclosures, consisting of certain correspondence between the contracting officer, the Quartermaster General, and the General Accounting Office, Audit Division, obviate the necessity for here detailing the differences of opinion which existed between the various officials concerned. While several issues have been raised, it appears that the only one which is material is that concerning the authority of the Quartermaster General to overrule the contracting officer's interpretation of the drawings and specifications in respect of the furnishing of skirtings and vestibules.

The act of June 3, 1916 (39 Stat. 170), as amended by the act of June 4, 1920 (41 Stat. 766), charges the Quartermaster General with the procurement of certain classes of supplies, such as prefabricated portable buildings. In carrying out this statutory duty, the Quartermaster General acts through contracting officers duly appointed by him, and purchases of Quartermaster Corps supplies may only be made by officers so appointed. See paragraph 50 (4), Army Regulations 5-100, and paragraph 4a, circular 1-3, OQMG. Moreover, each contracting officer so appointed performs the duties assigned to him in conformity with both general and special instructions issued by the Quartermaster General.

From the above, it seems apparent that the relationship between the Quartermaster General and each contracting officer of the Quartermaster Corps is that of principal and agent, and that such relationship necessarily presumes a degree of subordination on the part of the contracting officer to the Quartermaster General. Any other conclusion appears to be untenable, since the Quartermaster General, with a statutory duty to perform, must necessarily be in a position at all times to guide and direct his subordinates in the performance of said duty.

In the subject controversy, the Audit Division contends that the Quartermaster General was without authority to rule that contract No. W-58-QM-CIV-59 did not require the furnishing of skirtings and vestibules, since paragraph GC 9 of the specifications specifies that the C. O. (contracting officer) shall be the interpreter of the true intent and meaning of the drawings and specifications. In reaching such a conclusion, the Audit Division apparently failed to consider the principal and agent relationship referred to above and the fact that the contracting officer, in interpreting the drawings and specifications, was acting as the representative of the Quartermaster General and subject to the instructions of the latter official. The Audit Division has also based its conclusion on the proposition that the question concerning the interpretation of the specifications was decided as an appeal under article 12 of the contract and that the Quartermaster General was without authority to decide questions of fact coming up under said article 12. Notwithstanding all previous assumptions and statements to the contrary, the question was decided by the Quartermaster General not as an appeal but as a matter of routine instruction to a subordinate official. In this connection it should be noted that the specifications were prepared in the office of the Quartermaster General, and thus it was incumbent upon that office to clarify any questions of interpretation which might be brought to its attention.

Summarizing the foregoing, it is the opinion of the War Department that the Quartermaster General properly found that the contract did not contemplate that