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housing project in Canton, Ohio, which became later known as Jackson Park

REPORT Sist CONGRESS | HOUSE OF REPRESENTATIVES 1st Session

No. 492 GEORGE H. WHIKE CONSTRUCTION CO. APRIL 29, 1949.-Committed to the Committee of the Whole House and ordered

to be printed Mr. BYRNE of New York, from the Committee on the Judiciary

submitted the following

REPORT

(To accompany H. R. 4419) The Committee on the Judiciary, to whom was referred the bill (H. R. 4419) for the relief of George H. Whike Construction Co., baving considered the same, report favorably thereon without amendment and recommend that the bill do pass. An identical bill was favorably reported by the committee and passed the House in the Eightieth Congress, but no action was taken by the Senate before final adjournment. The facts will be found fully set forth in House Report No. 2064, Eightieth Congress, second session, which is appended hereto and made a part of this report.

(H. Rept. No. 2064, 80th Cong., 2d sess.) George H. Whike Construction Co., of Canton, Ohio, in full settlement of all

The purpose of the proposed legislation is to pay the sum of $14,483.45 to claims against the United States for losses sustained on Jackson Park homes project contract No. OH-33037, Canton, Ohio, as the result of Executive Order 9301 changing the workweek from 40 hours to 48 hours on the same date (FebTuary 11, 1943) that contract was signed. The Federal Public Housing Authority authorized the construction of a war war housing project, OH-33037, Canton, Ohio. February 11, 1943, the

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GENERAL STATEMENT

Homes,

8. Repts., 81-1, vol. 3—11

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George H. Whike Construction Co. submitted bids on this project based on a 40-hour workweek. On the same date of February 11, 1943, Executive Order No. 9301 was issued granting authority to the War Manpower Commission to place certain areas in a 48-hour workweek. Evidence before the committee disclosed that the principal contractor refused to enter into the contract to build this project until he was assured that in the event this area was placed in a 48hour workweek he would be reimbursed by the Government for the extra cost incident thereto. Evidence disclosed that the Federal Housing Authorities in Cleveland in order to assure the contractor that he would be reimbursed had typewritten at the bottom of page 3 of the bid form, which page sets out the cost of the labor and materials, the following language: “This bid is based on 40-hour week. If it becomes necessary to work more than 40 hours by Executive Order, we are to be reimbursed for the extra cost of such overtime, plus taxes and insurance."

Evidence further shows that Whike Construction Co.'s bid was $35,760 lower than the next nearest bidder, further indicating that said bid was based on the 40-hour workweek.

On August 9, 1943 the War Manpower Commission placed into effect an order for a 48-hour workweek in said Canton area, and said contractors were given until September 9, 1943, to comply with said order. This order necessarily entailed additional expenses for overtime, taxes, and insurance not only to the principal contractor but to numerous subcontractors. When the roject was complete claim was made in the amount of $14,483.45 to reimburse the construction company and the subcontractors for this overtime, taxes, and insurance, made necessary by the additional 8 hours per week.

The committee has taken thi matter under consideration for considerable time, waiting on the outcome and the court's decision on an action brought in behalf of one of the larger subcontractors against this construction company. This suit was tried before the court of common pleas of Stark County, Ohio, January 14, 1948, which resulted in a verdict against the construction company, and said company was compelled to pay subcontractor the original claim of $2,381.33, plus 6 percent interest from December 19, 1943 which amounted to ovir $600. This case clearly indicated that the original contractor was liable for the overtime of the subcontractors, and the court held that the contractor alone was liable for the reason that there was no contract between the Housing Authority and the subcontractors. This was a test case and the contractor is now faced with suits on behalf of all the subcontractors' claims.

Evidence was also introduced that at the same time this housing project was being constructed there was a similar project under construction immediately across the street, known as the Canton housing project, No. OH-33036; that the same situation arose with this contractor, who was the Melbourne Construction Co., of Canton, Ohio, in regard to the 48-hour workweek and the overtime, taxes, and insurance made necessary by said Executive Order 9301; and that the Melbourne Construction Co. was paid by the Housing Authority for these additional costs. It is difficult for the committee to understand the discrepancy between the two claims, as both contracts were signed at exactly the same time and the claims for the overtime were also presented in the same manner.

The committee is satisfied that this claim is just and reasonable; that there was a contract between the Federal Housing Authority and the construction company to pay for this additional cost; and they recommend that said bill do pass.

NATIONAL HOUSING AGENCY,

Washington, D. C., July 25, 1946. Hon. Dan R. McGEHEE,

House of Representatives, Washington, D. C. MY DEAR CONGRESSMAN McGEHEE: This will supplement my letter of April 8 acknowledging your letter of April 1, requesting a report on H. R. 5954, a bill for the relief of George H. Whike Construction Co. We are enclosing a copy of a decision dated November 8, 1945, to Mr. Henderson H. Carson, attorney for the Whike Construction Co., from Mr. Philip M. Klutznick, Commissioner of Federal

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Public Housing Authority, in which the position of FPHA denying the claim of the Whike Construction Co. is set forth in detail.

A substantial number of contractors have claimed extra costs in connection with overtime work as a result of compliance with Executive Order 9301. The position of FPHA has uniformly been that compliance with Executive Order 9301 does not give any contractor any remedy against the FPH A because the issuance of Executive Order 9301 was a sovereign act of the Government which imposed no legal liability on the FPHA, no matter what injury may have been done to the contractor,

The FPHA recognizes that there might be certain instances where payment of these claims would in equity be desirable. All claims arising under this Executive order may be placed in three broad categories. The first is the case where the contractor computed his bid on the basis of a 40-hour week and where the contractor, in fact, could have completed his work within the contract time, working on a 40-hour week. We were of the opinion that, under such circumstances, the Government should in equity pay the additional costs. The second category is where the contractor computed his bid upon a 40-hour-week basis, but for one reason or another, would have had to work 48 hours per week in order to complete his contract within the contract time, or would have had to pay liquidated damages. Such contractors are not in equity entitled to receive extra compensation. The third category is the case where the contractor expected to work 48 or more hours per week and, of course, in this case the contractor was in no manner injured by the issuance of Executive Order 9301.

This agency's policy was established in accordance with the above principle but in practice we found that contractors' claims fell into class 2 or 3 because, for one reason or another, there were substantial overruns in the contract completion time and the employment of men 48 hours a week was necessary to complete the contracts on time. This position has been challenged by contractors in class 2 on the theory that the contract was completed before the contract completion date as extended by extensions of time made mandatory by the contract, but the FPHA does not concur in this position. Accordingly, although it was recognized that in theory there was a remedy available to the contractors, in practice relief has not been extended to contractors. The one exception is a case where, because of exceptional circumstances, namely, a commitment in writing not properly a part of the contract document, it was just and equitable to reimburse the contractor. The exception is the case of the Mbourne Bros. Construction Co. (our project No. OH-33036), which incidentally was a claim handled by Mr. Carson, who is also attorney for this claimant.

For the above reasons, we do not believe it proper for the FPHA to extend any administrative relief to this contractor, but we do agree that if relief is to be extended, it is properly extendable by congressional action. However, we wish to direct your attention to the fact that the C. B. Ross Construction Co. has brought suit in the Court of Claims against WPHA and the National Capital Housing Authority (suit No. 46204) arising out of a denial by the FPHA and the NCHA of the contractor's claim arising out of Executive Order 9301. If it should be judicially determined that the claim of C. B. Ross Construction Co. is allowable, there would appear to be an adequate remedy available to the claimant apart from congressional action. We do not believe that the decision of the Court of Claims will be in favor of the claimant, but we are directing your attention to this matter in order that your committee may give consideration to the question of whether the bill for the relief of Whike Construction Co. is premature.

In conclusion, for the reasons stated in the enclosed letter of November 8, 1945, we are unable to recommend that the claim of Whike Construction Co. bé approved. If, however, you determine the claim of the Whike Construction Co. to be meritorious, we direct your attention to the fact that there are other claims arising under Executive Order 9301 which appear to be equally meritorious, and in order that all in the same circumstances may receive equal relief, you may desire to give consideration to taking appropriate action to relieve 'other contractors who were required, by Executive Order 9301, to work 48 hours per week but who received no extra compensation to reimburse them for the extra premium wages expended by them.

For your information, there is also enclosed a copy of a letter of the Comptroller General bearing on this matter.

The Bureau of the Budget has advised that there is no objection to the submission of this report. Sincerely yours,

Wilson W. WYATT,

Administrator.

AFFIDAVIT

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STATE OF OHIO,

Stark County, ss: George H. Whike, Jr., being first duly sworn, deposes and says that he is presi- ist dul dent of the George H. Whike Construction Co. with principal office located in the site com George D. Harter Bank Building in the city of Canton, Ohio; that on or about the 20th day of February 1943 his said company bid on Federal Housing project No. OH-33037 which was also known as the Jackson Park Homes; that the total amount of their bid was $589,240 and that said bid was based upon a 40-hour workweek as evidenced by the language on påge three of the bid form which is as follows:

“This bid is based on 40-hour week. If it becomes necessary to work more than 40 hours, by Executive order, we are to be reimbursed for the extra cost of such overtime, plus taxes and insurance.”

Affiant states further that he was familiar with Executive Order 9301 granting authority to the War Manpower Commission to place certain areas under a 48 hour work week; that Canton and the area surrounding Canton was still in the 40 hour workweek and the best information he could obtain was that this workweek would not be changed to the 48 hour workweek; that at approximately the same time the Melbourne Construction Co. was preparing bids on project No. OH-33036 being the Sherrick Road home construction which was immediately across the street from the Jackson Park home site; that the Melbourne Construction Co. was bidding on said contract under the 40 hour workweek and that his company, The Whike Construction Co., also made their bid on the 40 hour workweek.

Affiant further says that around 10 a. m. on the 26th day of February he was called by phone from the Federal Housing Office in Cleveland by Mr. Currie and advised that he should be in Cleveland at 2 p. m. the same date to sign the contract; that he and his brother Fred Whike left for Cleveland as soon as they could and arrived there around 2:30 p. m.; that they were met by Mr. Fullmer and Mr. Currie and they spent practically the entire afternoon going over and signing the the drawings and specifications.

Affiant states further that around 5:30 p. m. they were taken to the legal department where the contract was being drawn; that he does not recall the name * of the man in charge of the legal department but that there was one man and his secretary present. Affiant states further that he immediately noticed that in said contract it was stipulated that said contract was subject to Executive Order No. 9301 establishing a minimum 48-hour wartime workweek and called the same ye to the attention of the counsel who informed him that the Department knew that his bid was based only on a 40-hour workweek and assured him that if it became necessary to work a 48-hour week that he would be reimbursed for the extra cost of such overtime, plus taxes and insurance; and that the contract was then taken to Mr. Sharpe's office where it was signed around 6 p. m.

Affiant further states that a day or so before he was called to Cleveland, Mr. Melbourne had signed his contract in Cleveland; that he had a conversation with Mr. Melbourne after his return and who advised him that the contract stipulated & 48-hour workweek but that he advised Mr. Melbourne that it was written in his bid that he was only to work 40 hours per week and that if it became necessary to work 48 hours per week that he was to be reimbursed for the extra cost of such overtime, plus taxes and insurance.

Affiant further states that as evidence that his bid was based upon a 40 hour per week basis is the fact that their bid was $35,760 lower than the next nearest bidder and that said contract was signed by him only after the representation and assurance that he would be reimbursed for all overtime if it became necessary to place the area in the 48-hour workweek.

Affiant states that the area was placed in the 48-hourwork week on the 9th day of August 1943 and that he immediately complied with the order of the War Manpower Commission which necessitated an expenditure of himself and subcontractors of $14,483.45 for overtime, taxes, and insurance for which amount he has presented claim. Further affiant sayeth not.

GEORGE H. WHIKE, Jr. Sworn to before me and subscribed in my presence this day of September 1945.

Notary Publa

AFFIDAVIT

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STATE OF Ohio,

Stark County, 88: Pred Whike, being first duly sworn, deposes and says that he is the secretary of the George H. Whike Construction Co. with principal office located in the George D. Harter Bank Building in the city of Canton, Ohio; that his said compary in February 1943 prepared bids on the Federal Housing project No. OH35037 known as the Jackson Park Homes. Affiant states that at about the same time their bids were being prepared Esecutive Order 9301 went into effect, said order granting to the Chairman of che War Manpower Commission the authority to place certain areas in a 48-hour workweek; that the Canton area was working a 40-hour workweek and no definite information could be secured regarding the enforcement of this Executive Order 9301 with the result that his company placed their bid on this project under the 4-hour workweek, their bid being for $598,240 and that in order to eliminate any misunderstanding regarding their bid on this project on the third page of said bid form was placed the following language:

"This bid is based on 40-hour week. If it becomes necessary to work more than 40 hours, by Executive order, we are to be reimbursed for the extra cost of such overtime, plus taxes and insurance."

Affiant states further that on a project immediately across the street from the Jackson Park Homes the Melbourne Construction Co. of Canton was also making a bid and said bid was also based upon a 40-hour workweek.

Affiant further says that the morning of February 26, 1945, there was a phone call from the Federal Housing office in Cleveland to his brother, George H. Whike, de, requesting his presence in their office at 2 p. m. to sign the contract; that he scompanied his brother to Cleveland where they were met by Mr. Fullmer and Mr. Currie

, and practically the entire afternoon was spent in signing the drawings and specifications. Affiant states further that around 5:30 p. m. on said date they were taken to the legal department where the contract was being drawn; that he and his brother went over said contract and immediately noticed that there had been included a paragraph in said contract subjecting the contract to a 48-hour workweek; that be and his brother immediately called the attention of the man in charge of the legal department to the fact that their bid had been based on a 40-hour workweek; that the man in charge of the legal department stated to both himself and his brother that the department knew

that their bid had been based only on a 40-hour Fork week and assured them that if it became necessary to work a 48-hour week that they would be reimbursed for the extra cost of such overtime plus taxes and Insurance; and that the contract was then taken to the office of Mr. Sharpe. regional director, where it was signed around 6 p. m. on said date. Affiant states further that as evidence that their bid was based on a 40-hour Fors week basis was the fact

that their bid was $35,760 lower than the next Dearest bidder and that said contract was signed only after the representation and assurance that they would be reimbursed for all overtime if it became necessary to place the area in the 48-hour workweek.

Affiant further states that the Canton area was placed in the 48-hour workweek on the 9th day of August 1943; that his said company immediately complied with the order of the War Manpower Commission which

necessitated an expenditure over and beyond the regular expenditures of $14,483.45 for overtime, taxes and insurance for which the said company has presented claim. Further affiant sayeth not.

FRED WHIKU. Sworn to before me and subscribed in my presence this day of September,

1945.

Notary Public

COPY OF EXECUTIVE ORDER FROM THE FEDERAL REGISTER
LIECUTIVE ORDER 8301 ESTABLISHING

A MINIMUM WARTIME WORK-WEEK
FORTY-EIGHT HOURS

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By virtue of the authority vested in me by the Constitution and statutes, as President of the United States, and in order to meet the manpower requirements

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