Texlex, Inc., St. Paul, Minn...
Waste King Corp., Los Angeles,
Calif.

E. I. du Pont de Nemours & Co.,
Inc., prime contractor; Alumin-
um Co. of America, subcon-
tractor.

Union Carbide Nuclear Co., Oak
Ridge, Tenn., prime contractor;
Fairbanks Morse & Co., sub-
contractor.

E. I. du Pont de Nemours & Co.,
Inc., prime contractor; Alum-
inum Co. of America, subcon-
tractor.

Bendix Corp., Kansas City, Mo.,
Land ACF Industries, Inc., Albu-
querque, N. Mex., prime con-
tractors; Aluminum Co. of
America, subcontractor.

Total Atomic Energy Com-
mission contractors.
National Aeronautics and Space Ad-
ministration: None, except as listed
under defense contractors.

1 Amounts (rounded to the nearest thousand dollars) do not agree in every case with findings shown in GAO reports due to adjustments made to reflect the result of the agencies' actions such as (1) expansion of recommended action to other contracts (2) adJustments found necessary when negotiations were reopened, and (3) recoveries made by

1,428,000

347,000

1,081,000

Request for voluntary refund did not result in any recovery.

Agency took no action in view of negative results in prior efforts to obtain a voluntary refund.

he agencies in situations where the original negotiation files lacked sufficient data to make possible the inclusion of a measure of the extent of overpricing of contracts in the audit report.

Not determined.

SCHEDULE II

Listing of reports to the Congress disclosing the award of illegal contracts, period July 1, 1958, through Dec. 31, 1964

Eventual results

The Comptroller General held that the contract in question violated
existing statutes (section 4(b) Armed Services Procurement Act,
62 Stat. 23) prohibiting the cost-plus-a-percentage of cost system
of contracting and that contracts executed in contravention of the
statutory prohibition do not impose an obligation upon the
Government to make payments in accordance with the terms of
such illegal contracts. It was recommended that a fair and
reasonable rate of profit be determined, commensurate with the
risks involved, the capital investment of Curtiss-Wright Europa,
N.V. and other considerations outlined in the report.
On Jan. 19, 1959, Curtiss-Wright Europa, N.V., filed a petition in
the court of claims for judgment in the amount of $951,682 arising
from withholding action taken by the Air Force by reason of the
Comptroller General's decision. An out-of-court settlement
offer of $890,865 was accepted by the Department of Justice.
The Comptroller General held that the work contemplated at time
of award differed so substantially in kind and quantity from that
advertised that the contract must be considered as having been
illegally awarded. It was recommended that quantum meruit
or quantum valebant settlement be made. The Department of
Defense, although disagreeing that the contract was illegally
awarded, advised on Jan. 11, 1965, that the Army will perform a
quantum meruit study.

SCHEDULE III

Listing of cases reported to the Congress in which formal exceptions to the disbursing officers accounts were taken with respect to contract payments, period July 1, 1958, through Dec. 31, 1964

$200, 126 Department of the Navy advised that $212,548 had
been withheld from payment for costs claimed.
Contractor is seeking relief under the emergency
powers granted to defense agencies under 50
U.S.C. 1431-1435. Case pending.

246, 923 By letter dated Nov. 25, 1964, the Deputy Assistant
Secretary of the Army advised that the charges
in question were appropriate and reasonable and
that the Army has ratified the actions of the con-
tracting officers and confirmed the determination
of reasonableness and allowability of the specific
cost. In view of the position taken by the Army
and the fact that the allowability of costs for re-
imbursement under Government cost-type con-
tracts as determined by the designated official
agreed upon therein is final and conclusive on the
Government, as well as the contractor, absent
fraud or a showing that the determination is
arbitrary or capricious, or is so grossly erroneous
as to imply bad faith, or is contrary to law, and
that a finding by GAO that an item of cost duly
approved under the contract is unreasonable
affords no legal or equitable grounds for denying
reimbursement to the contractor, GAO plans to
withdraw the Notice of Exception.
Amount in question was $1,010,000 of which $655,000
had been reimbursed to the contractor. Notice
of Exception also directed the Department of the
Navy to withhold payment of $355,000. In Jan-
uary 1964 the Navy deducted $655,000 from the
payment of other amounts due under the con-
tract and advised that payment of a claim for
$355,000 had been denied. Westinghouse, through
its attorneys, has requested reconsideration of the
case on Jan. 28, 1965.

The Department of the Navy advised that it considered the subcontract prices in question to be reasonable, that the prime contractor did not breach its contract and that no legal or equitable basis exists for recovery either from the subcontractor or the prime contractor. In view of the position taken by the Navy and finality of contracting officers' decisions as indicated in the Stanford Research Institute case above, GAO plans to withdraw the Notice of Exception.

APPENDIX 10-LEGAL MEMORANDUM ON 18 U.S. CODE, SECTION 1905

The legislative history of section 1905, title 18, United States Code, is to be found principally in House Report No. 304, dated April 24, 1947, on the bill H.R. 3190, which became title 18 as enacted, and in the hearings of March 7, 1947, before Subcommittee No. 1 of the House Judiciary Committee. The Committee on Revision of the Laws (House) undertook codification and revision of the criminal statutes in 1943 and the work continued for several years with the assistance of the West Publishing Co. and the Edward Thompson Co. and staff members of the Committee on Revision and an advisory committee of Judge Thomson (formerly Illinois Supreme Court), Judge Miller (former U.S. circuit court), and Mr. Cahill (former U.S. attorney, southern district of New York). The hearings give ample evidence that it was not intended to change greatly the substance of existing law. For example, Congressman Keogh, who was chairman of the Committee on Revision, testified (p. 11, hearings):

"The motivation for our seeking to avoid as far as possible controversial substantive changes was due to the basic potential conflict of the jurisdiction of the Committee on Revision of the Laws and the House Judiciary Committee. I think to a large extent, by the merger of our functions into you, that that conflict is somewhat removed.

"But, further, we proceeded upon the hypothesis that since that was primarily a restatement of existing law, we should not endanger its accomplishment by the inclusion in the work of any highly controversial changes in law."

Mr. Barron, chief reviser, West Publishing Co., said (p. 24, hearings): “*** All of the judges and lawyers who worked on this revision had but the one idea in mind, to present to your body the best possible restatement of the statutory law; one which would clarify ambiguities, eliminate overlapping and conflicting provisions of law and simplify existing law, so as to promote the administration of justice in the Federal courts."

Judge Thomson, a member of the advisory committee, stated (p. 30, hearings): "*** Our committee did not attempt a revision of the Federal criminal law and procedure because we had no such authority. * All of the changes which were made by us are noted in the footnotes for the convenience of the Members of the Congress."

Mr. Klepinger, an attorney who was on the West Publishing Co. revision staff, testified (p. 38, hearings):

"I recall an inquiry that was made this morning about whether the Ramseyer rule had been complied with and I can say that it has been to the letter, in the reports accompanying these two bills."

In an accompanying statement, Mr. Klepinger said:

"5. The original intent of Congress is preserved. This is because Federal decisions were followed which settled any doubt and, in addition, a uniform style of statutory expression was adopted.

"6. All offenses are defined simply, thus avoiding repetitions. The only changes of any substance in the criminal statutes are those which harmonize and make uniform the punishments for felonies and misdemeanors in the interest of justice. **

Finally, Mr. Charles J. Zinn, law revision counsel, House Committee on the Judiciary, whom Congressman Keogh said was, in his opinion, the one most familiar with work of the Committee on Revision, stated (p. 40, hearings) :

"In the work of revision, principally codification, as we have done here, keeping revision to a minimum, I believe the rule of statutory construction is that a mere change of wording will not effect a change in meaning unless a clear intent to change the meaning is evidenced.

"To find out the intent, I think the courts would go to the report of the committee on the bills and these reports are most comprehensive. We have incorporated in them Mr. Barron's notes to each section of the billls, both the criminal code and the judicial code.

"It is clearly indicated in each of those revisers' notes whether any change was intended so that merely because we have changed the language we have changed the language to get a uniform style, to avoid awkward expression, to state a thing more concisely and succinctly-but a mere change in language will not be interpreted as an intent to change the law unless there is some other clear evidence of an intent to change the law.

"So on that basis, I believe many fears may be allayed. People who are afraid that we are changing the law to a great extent need not worry particularly about it."

House Report No. 304 itself states (p. 9) that:

"The reviser's notes are keyed to sections of this bill and explain in detail every change made in text. In many instances they are supported by references

to court decisions and State statutes." [Emphasis supplied.]

The reviser's notes themselves (p. A127-128, H. Rept. 304) state:

"Section consolidates section 176b of title 15, U.S.C., 1940 ed., Commerce and Trade; section 216 of title 18, U.S.C., 1940 ed., and section 1335 of title 19, U.S.C., 1940 ed., Customs Duties.

*

"Minor changes were made in translations and phraseology."

It seems clear from the foregoing excerpts from the legislative history of section 1905 that there was no intent to work any substantial change in existing law. However, as will be shown, two very drastic changes were made, perhaps inadvertently.

Since the section is said to be a consolidation of three existing laws, it is pertinent to discuss these. Section 1335, title 19, United States Code, 1940 edition, derived from the Act of June 17, 1930 (ch. 497, title III, sec. 335, 46 Stat. 701), which established the Tariff Commission. It read:

"It shall be unlawful for any member of the commission, or for any employee, agent, or clerk of the commission, or any other officer or employee of the United States, to divulge, or to make known in any manner whatever not provided for by law, to any person, the trade secrets or processes of any person, firm, copartnership, corporation, or association embraced in any examination or investigation conducted by the commission, or by order of the commission, or by order of any member thereof."

It is to be noted that the data protected against disclosure consisted only of "trade secrets or processes" of business entities and the prohibition applied only when such data were learned through Tariff Commission activity.

Section 176b, title 15, United States Code, 1940 edition, derived from the Act of January 27, 1938 (ch. 11, sec. 2, 52 Stat. 8), and read:

"Any statistical information furnished in confidence to the Bureau of Foreign and Domestic Commerce by individuals, corporations, and firms shall be held to be confidential, and shall be used only for the statistical purposes for which it is supplied. * * * nor shall he permit any statistics of domestic commerce to be published in such manner as to reveal the identity of the individual, corporation, or firm furnishing such data."

It will be noted that the statute applied only to data furnished to the Bureau of Foreign and Domestic Commerce, which was statistical data. It should be further noted that the prohibition against revelation of the identity of any firm applied only in connection with the publication of statistical data on domestic commerce. In other words, the statute implicitly permitted publication of statistical data on domestic commerce provided only no particular firm was identified with the statistics.

Section 216, title 18, United States Code, 1940, edition, is the primary source of section 1905. It had its origins in section 3167 of the Reversed Statutes, which in turn derived from the act of June 30, 1864, section 38 of which (13 Stat. 238) prohibited Internal Revenue employees from disclosing the "operations, style of work, or apparatus of any manufacturer or producer visited by him in the discharge of official duties." Section 3167, Revised Statutes remained pretty much unchanged until the 16th amendment to the Constitution permitted the levy of graduated income taxes. The same year, by the act of October 3, 1913 (ch. 16, 38 Stat. 177), section 3167, Revised Statutes was amended to include a prohibition against disclosure of "the amount or source of income, profits, losses, expenditures, or any particular thereof." However, even then such disclosure was prohibited only if such data came from an income-tax return. Section 216 read as follows:

"It shall be unlawful for any *** officer or employee of the United States to divulge or to make known in any manner whatever not provided by law to any person the operations, style of work, or apparatus of any manufacturer or producer visited by him in the discharge of his official duties, or the amount or source of income, profits, losses, expenditures, or any particular thereof, set forth or disclosed in any income return, or to permit any income return or copy thereof or any book containing any abstract or particulars thereof to be seen or examined by any person except as provided by law; and it shall be unlawful for any person to print or publish in any manner whatever not provided by law