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sistent with the action of the bureau in converting the insurance. 1 Comp. Gen., 756. The action of the bureau in reducing the amount of insurance is equally inconsistent with the maturing of the policy as of a prior date by a retroactive bureau rating.
DESTITUTE AMERICAN SEAMEN.
Destitute American seamen who have been furnished transportation from a
foreign port to the United States but who desert the ship at some interme diate port voluntarily and without fault on the part of the vessel, are not entitled under the act of June 1, 1922, 42 Stat., 603, to further relief from the United States.
Comptroller General McCarl to the Secretary of State, January 31, 1923.
I have your letter of January 22, 1923, requesting decision" as to the availability of the appropriation for the relief of destitute American seamen, for such seamen who, while they are being returned to the United States at the Government's expense, may desert at an intermediate port."
The appropriation referred to is in the following terms:
For relief and protection of American seamen in foreign countries, and the Panama Canal Zone, and shipwrecked American seamen in the Territory of Alaska, in the Hawaiian Islands, Porto Rico, the Philippine Islands, and the Virgin Islands, $220,000. Act of June 1, 1922, 42 Stat., 603.
The question presented is whether a seaman to whom a consular officer has furnished passage from a foreign port to a port in the United States at the expense of this appropriation and who at an intermediate port deserts the ship on which he was being furnished transportation to the United States is entitled to be furnished at the intermediate port relief as a destitute seaman.
If the desertion at the intermediate port was voluntary on the part of the seaman and without fault on the part of the vessel he thereby forfeited his right to further relief. That is to say, a seaman can not, after being furnished at the expense of the Government all the relief provided for under the statutes, voluntarily refuse to avail himself of a part of said relief and thereby impose upon the Government an obligation to furnish additional relief to him. On the other hand, if the failure of the seaman to complete the voyage on which he had been furnished passage to a port in the United States was not due to fault, negligence, or voluntary action on his part and he is found destitute at the intermediate port and applies to the proper officer there for relief, the appropriation hereinbefore quoted is available for furnishing sufficient subsistence and passage to some port in the United States, in the most reasonable manner, as provided in section 4577, Revised Statutes. The question submitted is answered accordingly.
LIQUIDATED DAMAGES-COMPUTATION OF DELAYS. Where a contract provides for the payment of liquidated damages for each
and every day” during the continuance of delay beyond authorized ex. tensions the computation of such damages is based on the number of
calendar days in the delay period and not on the number of working days. Comptroller General McCarl to the Secretary of Commerce, January 31, 1923.
I have your letter of January 10, 1923, as follows:
Under date of September 21, 1922, the Bureau of Lighthouses of this department entered into a contract for docking, cleaning, painting, etc., of Light Vessel No. 80. The contractor in his proposal agreed to commence work within five calendar days after receipt of notice of approval of contract, and to complete the entire work within sixteen working days from and after the date of the expiration of that period. The contractor was notified of the approval of the contract October 12, 1922. The original contract period expired on November 4, 1922, but the contractor was granted an extension of five working days due to the ordering of optional items for the Government, thus making the date for the completion of the contract expire November 10, 1922. The work was actually completed on November 13, 1922, resulting in a delay of three days. Paragraph 4 of the conditions of the contract provides as follows:
“Time is to be considered as of the essence of the contract, and in case the completion of said work shall be delayed beyond the period stated therefor in the proposal the Secretary of Commerce shall, in view of the difficulty of estimating with exactness the damages which will result, deduct as liquidated damages, and not as a penalty, six dollars ($6.00) for each and every day during the continuance of such delay and until such work shall be completed, and such deduction shall be made from time to time from any payment due hereunder: Provided, however, That where the said Secretary 18 satisfied that such delay has been caused by the act of the United States, and through no fault of the contractor, or by circumstances, including fire, water, and strikes of employees, beyond the control of the contractor, then said deductions shall not be made; and such additional time may, in writing, be allowed the contractor for the completion of the work as, in the judgment of the said Secretary, shall be just, reasonable and proper;
In accordance with the above-quoted provision of the contract liquidated damages in the amount of $18.00 covering three days' delay were deducted from the amount of the contract price, the department in computing this amount construing the term “ each and every day” to mean calendar days. The contractor, however, has taken exception to this interpretation of the contract for the reason that he is under the impression that any deductions chargeable against him for delays should be based on working days rather than calendar days.
Your decision is therefore requested whether, in computing liquidated damages under the above-quoted provision of the contract, the term “ each and every day" should be construed to mean calendar days, or working days, Sundays and holidays being excluded.
There is noted the statement of the contractor, the Maryland Dry Dock Co., by its president, that all work on the vessel was actually completed at the close of working hours on November 10, with the exception of filling the fresh-water tanks and testing them out and the pipe connections, and that by reason of November 11 being a local holiday and November 12 being Sunday, the entire work was not completed until Monday forenoon, November 13. There was no extension of time granted the contractor beyond the five working days which expired November 10. In this connection there is noted the statement of the superintendent of lighthouses, fifth district, the contracting officer on the part of the United States, that even had the contractor requested a further extension of time on or before November 10 his office would have been unable to recommend such extension as being due on account of any causes beyond the control of the contractor.
In computing liquidated damages under the provisions of paragraph 4 of the conditions of the contract, the term “ each and every day during the continuance of such delay" should be construed to mean calendar days. 17 Comp. Dec., 728. Upon the facts shown by your submission the deduction of liquidated damages in the amount of $18 covering three days' delay was in accordance with the terms of the contract.
PREMIUMS ON BONDS OF CONTRACTORS COST-PLUS CON.
The giving of a bond for the performance of a cost-plus contract is more in the
nature of a requirement by the Government than of a personal qualification necessary to perform the contract, and the conclusion of the Supreme Court of the United States in the case of United States v. Mason and Hanger Company, decided December 4, 1922, that the premium on the bond is a cost item in the contract will be followed. 25 Comp. Dec., 300, and 26 id., 374,
in so far as in conflict, are overruled. Decision by Comptroller General McCarl, February 1, 1923:
The question of payment of premium on contractor's performance bond was involved in the decision by the Comptroller of the Treasury in the case of the North-Eastern Construction Co., and there determined as a requirement for the contractor to qualify as such. (26 Comp. Dec. 374.) The Supreme Court of the United States, in its decision of December 4, 1922, United States v. Mason and anger Company, has expressed the opinion that the determination of a contracting officer that the premium on the bond is a cost under the terms of the contract and the payment of such premium was a course of conduct or practice binding the parties, and also that such determination of the officer was within his authority and operated to preclude the Comptroller of the Treasury from determining any question thereon.
The conclusion of the court as to the premium paid being a proper cost under such contracts is believed to be proper, but the reasons therefor in the view of this office are that the giving of a bond is not a personal need of the contractor to qualify it as such; a qualification presumably existing, neither being added to nor restricted by the giving of a bond, and that in reality the giving of a bond is a demand of the United States for its own purposes, usually that of protection against defaults, etc. The work contracted for can probably be done by the contractor regardless of the giving of the bond, and if the United States for its own purposes believes such a bond should nevertheless be given, the premiums paid are clearly a cost arising out of the contract rather than any personal requirements of the contractor to enable it to perform.
Accordingly, the conclusion of the court will be followed in adjusting claims and accounts involving bond premiums on such contracts containing provisions for payment of premiums as come clearly within the decision,
Ordinarily the amount of the premium on a bond is determined by the amount of the bond, character and cost of the work, and the period involved, and sometimes other elements are taken into consideration. If the cost of the work is indefinite and the estimated amount is excessive, the excess premium should be returned. In proper cases, therefore, the sureties should be requested to state the amount of premium charged on the bond and any rebates made on account thereof.
In dealing with the contractor the amount refunded on account of excess premium should be deducted from any amount otherwise due, or, if payment has been made, a charge should be raised and proper steps taken to recover the overpayment. This action need not interfere with the allowance of credit to disbursing officers for amounts paid as premiums on proper vouchers, if otherwise correct.
TRANSPORTATION OF HOUSEHOLD GOODS OF EMPLOYEES OF
RIVERS AND HARBORS ORGANIZATION OF ARMY.
As the rivers and harbors organization while under the supervision of officers
of the Engineer Corps of the Army forms no part of the Military Establishment, the current appropriation “Maintenance and improvement of existing harbor works" is applicable to the cost of the transportation, on permanent change of station, of the household goods of an employee of the Engineer Department of the Army engaged on river and harbor work, and the appropriation “Transportation of the Army and its sup
plies, 1923,” may not be used therefor. Transportation of the household effects of an employee of the rivers and har.
bors organization of the Engineer Corps of the Army on permanent change of station may be effected by motor van, provided such mode of transportation be administratively authorized and the cost thereof exceeds neither the maximum allowance on change of station nor the cost to the
Government of shipping such goods by rail.
C. B. Deigan was allowed $111 in settlement W-153813, dated October 25, 1922, payable from the appropriation “Maintenance and improvement of existing harbor works," as the cost of packing, crating, and transporting, September 27, 1922, the household effects of Robert W. Chaffee, assistant engineer, from Providence, R. I., to New York, N. Y., incidental to his permanent change of station under orders dated August 14, 1922, and the question has been raised whether the amount should not have been charged to the appropriation “Transportation of the Army and its supplies, 1923."
Chaffee was an employee of the Engineer Department of the Army engaged on river and harbor work as assistant engineer in the office of the district engineer at Providence, R. I., on August 14, 1922, when he was permanently transferred in the same capacity to the office of the district engineer at New York, N. Y. Application was made to the quartermaster of the First Corps Area for permission to have his household effects transported by motor van from his old to his new station under the provisions of paragraph 1136, Army Regulations, as amended by Changes 117, dated July 1, 1921. Permission was granted, provided the total cost of the transportation by motor van did not exceed what it would cost to effect the transportation by rail and with the further provision that the total cost should not exceed the maximum allowance of $111. Deigan effected the transportation at a cost of $111, and his claim for payment was allowed in the settlement in question and has been paid from the appropriation for the “Maintenance and improvement of existing harbor works," which currently, 42 Stat., 760, provided funds:
For the preservation and maintenance of existing river and harbor works, and for the prosecution of such projects heretofore authorized as may be most desirable in the interests of commerce and navigation, but the suggestion has been made that the amount should have been paid from funds appropriated, currently, 42 Stat., 729:
For transportation of the Army and its supplies, including transportation of the troops when moving either by land or water, and of their baggage, including warrant officers, members of the Officers' Reserve Corps, enlisted men of the Enlisted Reserve Corps, and retired enlisted men when ordered to active duty, including the cost of packing and crating
While the maintenance and improvement of rivers and harbors is under the supervision of officers of the Engineer Corps of the Army, the rivers and harbors organization under the acts of April 22, 1898, 30 Stat., 361, and June 3, 1916, 39 Stat., 173, forms no part of the Military Establishment. 26 Comp. Dec., 321. Section 2 of the act of March 2, 1919, 40 Stat., 1287, provided, in effect, that where separate items or works are consolidated and an aggregate amount is appropriated for rivers and harbors, the amount so appropriated shall, unless otherwise expressed, be expended in securing the maintenance and improvement of rivers and harbors according to the respective projects adopted, and section 6 of the act of March 3, 1905, 33 Stat., 1148, provided :
That expenses incurred by the Engineer Department in all investigations, inspections, bearings, reports, service of notice, or other action incidental to examination of plans or sites of bridges or other structures built or proposed to be built in or over navigable waters, or to examinations into alleged violations of laws for the protection and preservation of navigable waters, or to the