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the Government of the United States for the construction of an extension to the power-plant building No. 41, at the Navy Yard, New York, N. Y., together with certain incidental work in connection therewith.

The contract mentioned in the bill was entered into under date of January 20, 1919, by the Franco-American Construction Co., Inc., with the United States through the Bureau of Yards and Docks for the construction of an extension to a boiler plant building and the performance of incidental work in accordance with the Government's drawings and specifications for the sum of $88,881, all work to be completed within the 150-day period ending July 16, 1919. The work was substantially completed May 31, 1920, the period of delay being 320 days.

During performance a number of changes in the work were made, some increasing, others reducing, the price. The total increases amounted to $13,787.17, and the decreases to $12,867.21 resulting in a net increase of $919.96, and a final total price of $89,800.96.

By reason of the changes in the work and all other causes that by the terms of the contract excused delay in performance, the contracting bureau granted an extension of 180 days in the time prescribed for the completion of the work. For the remaining delay of 140 days the contractor was held responsible and liquidated damages therefor, amounting to $14,000, at the agreed rate of $100 a day, were assessed and deducted from the contract price.

Of the total amount of the contract, $89,800.96, the contractor has received $75,799.83, the difference being $14,001.13. The deduction from this remainder of liquidated damages in amount $14,000 leaves a balance of $1.13, payment of which the contractor has omitted to accept.

In 1926 the contractor brought suit in the Court of Claims, alleging that it had earned under the contract $94,361.05, and had been damaged to the extent of $3,085.60 by the Government's failure to provide a suitable site, and sufficient storage space for the performance of the work, and sought to recover the difference between the total of these sums ($97,446.65) and the amount that it had been paid ($75,799.83), or $21,646.82.

The court, after a trial of the case on the merits, dismissed the petition (76 Ct. Cls. 132). In its decision the court, after referring to the claims of the FrancoAmerican Construction Co. that the decisions of the boards on changes were erroneous, said that “we can find no error in them."

The court denied relief on the claim for the remission of liquidated damages for delays stating that such relief could not be granted "without the establishment by clear and convincing proof of fraud or indirect action," and "the evidence in this case is singularly free from any taint of wrongful action.”

Upon the failure to secure relief in the Court of Claims, the company had bills S. 1750 and H. R. 5219 introduced in the Seventy-fifth Congress, first session, providing for the payment to it of the sum of $21,645.69. This represented the amount sought in the suit in the Court of Claims less the $1.13 item, mentioned above.

The present bill, S. 3437, provides for the payment of the sum of $14,492.27 in full settlement of the claims for which the larger sum was sought in the bills introduced in the preceding Congress. Although the claims for which relief is contemplated by the pending bill are not described therein, they apparently were included among those covered by the decision of the Court of Claims, above cited.

All claims by the Franco-American Construction Co. affecting compensation and time for performance under the contract involved had careful and painstaking consideration, both in the field and in the contracting bureau, and the allowances administratively made were in all cases fair and equitable to the contractor. The decisions thus made were, as above noted, upheld by the Court of Claims. The Navy Department believes that if there was error in these allowances, it was on the side of liberality.

The work under the contract was carried on in a dilatory and unsatisfactory manner, and the Government suffered great inconvenience and damage because of the long delay in its completion. The contractor has no legal, and, in the Navy Department's opinion, no equitable claim for the relief sought.

The cost of the proposed legislation is $14,492.27.

In view of the foregoing, the Navy Department recommends against the enactment of the bill S. 3437. Sincerely yours,

Louis COMPTON, Acting Secretary of the Navy.

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JUNE 5 (legislative day, May 28), 1940.-Ordered to be printed

Mr. ADAMS, from the Committee on Appropriations, submitted the

following

REPORT

[To accompany H. J. Res. 544]

The Committee on Appropriations, to whom was referred the joint resolution (H. J. Res. 544) entitled "Joint resolution making appropriations for work relief and relief for the fiscal year ending June 30, 1941” report the same to the Senate with various amendments and present herewith information relative to the changes made. Amount of resolution as passed the House - $1, 111, 754, 916 Amount of resolution as reported to Senate..

1,073, 584,916

Reduction under House resolution (net) --- 38, 170, 000 The changes in the amounts of the House resolution are as follows:

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Comparative statement showing the appropriations for work relief and relief for the fiscal year 1940, the Budget estimates for the fiscal year 1941, N

and the amounts recommended for 1941 in H. J. Res. 544 as reported to the Senate

Amount of ap-
propriations for

Amount of 1941
fiscal year 1940 Budget estimates

Amounts recom

mended in the
joint resolution
for 1941 as re-
port to the

Senate

Increase (+)
or decrease (-),

joint resolu-
tion compared
with 1940 ap-
propriations

Increase (+)
or decrease
(-), joint

resolution
compared with
1941 Budget
estimates

Work Projects Administration..

1 $1, 477, 000, 000 19 $975, 650, 000 1 : $975, 650, 000-$501, 350, 000 Department of Agriculture, rural rehabilitation.- i 143, 000, 000 | 123, 000, 000 16 75, 000, 000 -68, 000, 000 $48, 000, 000 Department of the Interior:

Puerto Rico Reconstruction Administration. 17,000,000 17, 000, 000 15, 000, 000 - 2, 000, 000 - 2, 000, 000 Indian Service, relief and rural rehabilitation.

1, 350, 000

1, 700, 000 1, 700, 000 +350, 000 Administrative expenses: General Accounting Office..

5, 225, 000 3 4, 600, 000 : 5, 600, 000 +375, 000 +1, 000, 000 Treasury Department

14, 598, 825 : 9, 575, 000 3 9, 429, 916 -5, 168, 909 - 145, 084 Federal Security Agency, Public Health Service

300, 000
* 200, 000

$ 200, 000 – 100, 000
Civil Aeronautics Board...

250, 000
3 175, 000

3 175, 000 -75, 000 Employees Compensation Commission. 5, 250, 000 : 3, 100, 000

-5, 250, 000 -3, 100, 000
Bureau of the Budget-
26, 175

-26, 175
Executive Office of the President, Office of Gov-
ernment Reports--

830, 000
1,055, 000
830, 000

- 225, 000
Total...

1, 654, 830, 000 1, 126, 055, 000 1, 073, 584, 916 581, 245, 084 -52, 470, 084
1 Plus unexpended balances from previous years.
? Subject to apportionment and expenditure in 8 months if the President so determines.

3 Subject to apportionment and expenditure in a lesser period of the fiscal year than 12 months if the W. P. A. appropriation is appor-
tioned on an 8-month basis.

4 $3,100,000 made available from existing funds on the same basis as in footnote 3.

In's. Doc. 199, it was recommended that the direct appropriation of $115,000,000 approved by the House be reduced to $59,000,000, and that in addition authority be granted to borrow not to exceed in the aggregate $125,000,000 from the Reconstruction Finance Corporation for the purpose of making rural rehabilitation loans.

EMERGENCY RELIEF APPROPRIATION ACT, FISCAL YEAR, 1941

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Section 1 (a): It is recommended by the committee that the following restriction on employment contained in section 1 (a) be stricken from the joint resolution: and in such case shall be so administered that the average monthly employment of relief workers paid from such funds will not exceed the number set forth in the following schedule for the months therein specified:

July 1940, 1,700,000;
August 1940, 1,700,000;
September 1940, 1,700,000;
October 1940, 1,800,000;
November 1940, 2,000,000.

It was represened to the committee that it is impossible to predict the exact conditions that will prevail over any considerable period of time and that the limits referred to above might make it impossible to meet an emergency arising during the period stated.

TYPES OF PROJECTS

Section 1 (b): It is recommended by the committee that relief funds shall be available for projects for training in manual occupations in industries engaged in production for national-defense purposes.

EXPENDITURES FOR OTHER THAN LABOR COSTS

Section 1 (c): It is recommended by the committee that the following proviso be added to the resolution: : Provided, That not to exceed $25,000,000 of funds herein appropriated to the Work Projects Administration may be used by the Commissioner to supplement the amounts 80 authorized for other than labor costs in any State, Territory, possession, or the District of Columbia in connection with the prosecution of projects which have been certified by the Secretary of War or by the Secretary of the Navy as being important to the national defense.

This proviso will enable public agencies situated in strategic areas to sponsor projects which are necessary for national defense. Because of limited funds available for such purposes, it has been found that many sponsors are financially unable to assume the necessary nonlabor costs in excess of the $6 per man-month, for the construction of airports and other undertakings of military importance.

SPONSOR'S CONTRIBUTIONS

Section 1 (d): It is recommended by the committee that the following proviso be added to the resolution: : Provided, That provisions of this subsection shall not apply to projects which have been certified by the Secretary of War or by the Secretary of the Navy as being important to the national defense and in addition shall not apply to projects which authorize necessary temporary measures to avert danger to life, property, or health in the event of disaster or grave emergency caused by flood, storm, fire, earthquake, drought, or similar cause.

The effect of this proviso is to exempt such projects from the 25percent sponsor's contribution requirements.

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