CONSIDERATION OF H. R. 2277

FEBRUARY 27, 1945.-Referred to the House Calendar and ordered to be printed

Mr. Cox, from the Committee on Rules, submitted the following

REPORT

[To accompany H. Res. 153]

The Committee on Rules, having had under consideration House Resolution 153, reports the same to the House with the recommendation that the resolution do pass.

FEBRUARY 27, 1945.-Committed to the Committee of the Whole House and ordered to be printed

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

following

REPORT

[To accompany H. R. 1842]

The Committee on Claims, to whom was referred the bill (H. R. 1842) for the relief of Mauger Construction Co., having considered the same, report favorably thereon without amendment and recommend that the bill do pass.

A similar bill was favorably reported by this committee in the Seventy-eighth Congress.

The facts will be found fully set forth in House Report No. 1102, Seventy-eighth Congress, which is appended hereto and made a part of this report.

[H. Rept. No. 1102, 78th Cong., 2d sess.]

The purpose of the proposed legislation is to appropriate the sum of $7,323.83 to the Mauger Construction Co., Columbus, Ohio, in full settlement of all claims against the United States for reimbursement for the amount of gross sales tax paid by such company to the State of West Virginia in connection with work performed under a Government contract dated May 14, 1941, in the construction of the Cumberland, Md., Municipal Airport near Wiley Ford, W. Va.

STATEMENT OF FACTS

It appears that this claim grew out of bids on April 23, 1941. The State procurement office of the Procurement Division, Treasury Department, at Baltimore, Md., issued an invitation for bids to be opened on May 7, 1941, for the construction of the Cumberland Municipal Airport near Wiley Ford, W. Va. Mr. Mauger, president of this company, secured the assistance of several men there, one whom was Mr. H. R. Anderson, president of the West Virginia Tractor & Equipment Co. Present at the hotel at the time this bid was being considered were H. O. Grimes, procurement officer; C. F. Bornefeld, director of operations; E. F. Hovermill, area manager; and J. H. Seibert, assistant area manager.

The Treasury Department had issued, and they admit that they had issued, an addendum to all bids of this type, which reads as follows:

"Tax: Bidder is not to include any sales or other tax in his bid. However, the statement may be made that if any tax is levied, the price bid will be increased by such an amount."

To show the sincerity of Mr. Mauger at the time this bid was made, it was necessary that he bring in and furnish a bond for the construction of this airport, so he brought in a Mr. Kuhns, who was a representative of the United States Fidelity & Guaranty Co. In order to satisfy himself that this bid did not include any sales tax, he went to the Work Projects Administration office at Baltimore and made further inquiry, and was told there that it was not to be included. Evidence in the case shows photostatic copy of the bid which was submitted to the Government and accepted, the last item of which shows a deduction of sales tax of $8,000 in the bid.

After the bid was made and the work completed, the State of West Virginia charged him, and he paid it under date of October 31, 1941, in the amount of $3,577.04, sales tax. On December 29, 1942, the amount of $3,746.79 was paid. In the adverse report from the Comptroller General he bases his opinion solely on one fact, which your committee thinks is very unfair, fundamentally, that no agent, or officer or representative of the Government is authorized to alter, modify, add to or subtract from a contract. He also states further in his report that the contractor was negligent inasmuch as he did not write in with pen or some other way that part of this at the bottom of the contract.

No better evidence could a court want than a photostatic copy of his original bid, which included the $8,000 estimated sales tax, and then to show that at the bottom of this, the last item, he deducted the same amount, $8,000, under the advice of one of the Office of Procurement men.

This was a customary bid, as had always been used heretofore. It was changed on May 2, and sent to his Columbus office. He was then in Baltimore and had no knowledge of the change at all. He makes an affidavit to that effect and tells why he did not have any knowledge of it, because he left Columbus on May 4 for Charleston, W. Va.; left Charleston on May 5 and arrived in Baltimore late on the night of the 6th. He states: "The whole entire day was spent in estimating the job in a room at the Lord Baltimore Hotel." Then is when the Office of Procurement, through Mr. Grimes, the procurement officer, and all these other men, who were directly in charge, informed him that under a new rule of the Treasury Department which had theretofore not been in effect, and which was in his Columbus office, received by his Columbus office on May 4, sales tax should not be included, so there was no negligence on his part so far as he is concerned.

The Treasury Department deducted the $8,000 also. He was led to believe by the four men, the only men in charge of this work in Baltimore, that if there was a sales tax he would be either reimbursed or he could increase his bid to that amount.

It is the opinion of your committee that the Mauger Construction Co. should be reimbursed in the amount of $7,323.83, and favorable consideration to the proposed legislation is recommended.

Appended hereto is the report from the Comptroller General of the United States, together with other pertinent evidence.