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 FPHA 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 Mabourne 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. be 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, STATE OF OHIO, Stark County, ss: AFFIDAVIT George H. Whike, Jr., being first duly sworn, deposes and says that he is president 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 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 page 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 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 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 a 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 1945. day of September Notary Puble, AFFIDAVIT STATE OF OHIO, Stark County, ss: Fred 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 company in February 1943 prepared bids on the Federal Housing project No. OH33037 known as the Jackson Park Homes. Affiant states that at about the same time their bids were being prepared Executive Order 9301 went into effect, said order granting to the Chairman of the 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 40-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, Jr., requesting his presence in their office at 2 p. m. to sign the contract; that he accompanied 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 egal 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 workweek 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 workweek basis was the fact that their bid was $35,760 lower than the next nearest 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. Sworn to before me and subscribed in my presence this 1945. FRED WHIKE. day of September, Notary Public. COPY OF EXECUTIVE ORDER FROM THE FEDERAL REGISTER EXECUTIVE ORDER 9301 ESTABLISHING A MINIMUM WARTIME WORK-WEEK OF FORTY-EIGHT HOURS 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 of our armed forces and our expanding war production program by a fuller utilization of our available manpower, it is hereby ordered: 1. For the duration of the war, no plant, factory or other place of employment shall be deemed to be making the most effective utilization of its manpower if the minimum workweek therein is less than 48 hours per week. 2. All departments and agencies of the Federal Government shall require their contractors to comply with the minimum workweek prescribed in this order and with policies, directives, and regulations prescribed hereunder, and shall promptly take such action as may be necessary for that purpose. 3. The Chairman of the War Manpower Commission shall determine all questions of interpretation and application arising under this order and shall formulate and issue such policies, directives, and regulations as he determines to be necessary to carry out this order and to effectuate its purposes. The Chairman of the War Manpower Commission is authorized to establish a minimum workweek greater or less than that established in section 1 of this order or take other action with respect to any case or type of case in which he determines that such different minimum workweek or other action would more effectively contribute to the war effort and promote the purposes of this order. 4. All departments and agencies of the Federal Government shall comply with such policies, directives, and regulations as the Chairman of the War Manpower Commission shall prescribe pursuant to this order, and shall so utilize their facilities, services, and personnel, and take such action under authority vested in them by law, as the Chairman determines to be necessary to effectuate the purposes of this order and promote compliance with its provisions. 5. Nothing in this order shall be construed as superseding or in conflict with any Federal, State or local law limiting hours of work or with the provisions of any individual or collective bargaining agreement with respect to rates of pay for hours worked in excess of the agreed or customary workweek, nor shall this order be construed as suspending or modifying any provision of the Fair Labor Standards Act (Act of June 25, 1938; 52 Stat. 1060; 29 U. S. C. 201 et seq.) or any other Federal, State or local law relating to the payment of wages or overtime. FRANKLIN D ROOSEVELT THE WHITE HOUSE February 9, 1943. F. R. Doc. 43-2162; Filed, February 10, 1943; 11:20 a. m.] CONGRESS OF THE UNITED STATES, In re: H. R. 1902, Whike Construction Co. House of Representatives, Washington, D. C. DEAR COLLEAGUE: Complying with your request in our recent conversation; 1 desire to give you a résumé of the suit which has been filed by the Spohn Heating & Ventilating Co. against the Whike Construction Co., being case No. 86068 in the court of common pleas of Stark County, Ohio. You will recall that the Spohn Co. was one of the subcontractors and brought this suit against the Whike Construction Co. to collect the overtime, taxes and insurance incurred by reason of this area being placed in a 48-hour workweek under the authority of Executive Order 9301. There were several bidders on this project, which was known as the Jackson Park Homes, Canton, Ohio, project No. OH-33037. The bids were made through the regional office of the FPHA at Cleveland, Ohio. The Whike Co. bid was based upon the 40-hour workweek and was approximately $37,000 lower than the next nearest bidder. About the time the bid was accepted Executive Order 9301 became effective which granted to the War Manpower Commission the authority to place any area in a 48-hour workweek. Mr. Whike objected to signing the contract with the FPHA until he was assured that he would be protected in the event the War Manpower Commission exercised the authority granted them in said Executive order. Before the contract was signed in the regional office of the FPHA in Cleveland, there was typewritten the following language, on page 3 of the bid of this project, which was the page which set out the various amounts for labor and material: "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." Mr. Whike and his brother who were present at the time the contract was signed were assured by the Housing Authorities that there would be no question about his reimbursement in the event the area went into a 48-hour week. The Melbourne Construction Co. had also bid at approximately the same time on another project directly across the street from the Jackson Park homes, it being known as the Sherrick Road project, No. OH-33036. Mr. Melbourne at the time he signed his contract with the Housing Authority in Cleveland was also guaranteed reimbursement in the event the area was placed under a 48-hour workweek. After the projects were completed claims for this overtime, and taxes and insurance, were made by both the Whike Co. and the Melbourne Co. The Melbourne claim was paid and it is most difficult to understand why the Whike Co.'s claim was not paid. The Spohn Co. was the low bidder on the plumbing and fixtures. They and the other subcontractors began work on March 1, 1943. On August 9, 1943, the War Manpower Commissioner by reason of his authority placed this area in a 48-hour workweek, to become effective on or about September 9, 1943. I do not believe there was any question at all among any of the subcontractors but what they all would be allowed this overtime by reason of this order, and the project engineer in charge of Government inspections, I believe, felt the same way as he assisted these companies in making out their claims for this overtime. These claims were both presented and, as I stated above, the Melbourne claim was paid but for some reason the Whike claim was not. They made several trips to Cleveland, meeting with the counsel of the Housing Authority who informed them that he was helpless to do anything because of a decision in Washington. The matter was then taken up in Washington with both Mr. Klutznick, Commissioner of FPHA, and Mr. Seavers one of the Commissioners, and the claim was again declined. There was no alternative except to file a claim in Congress for reimbursement of this overtime not only for the general contractor but also for the subcontractors. It was contended in the suit by the Spohn Co. against the Whike Co. that the Spohn Co. had no contract whatsoever with the Government but solely with the Whike Construction Co. Our defense in the case was that we had made a bid in good faith, based on a 40-hour workweek. It was contended that the Whike Co. had nothing whatever to do with placing the area in a 48-hour workweek, this being solely by an order of the Government. They further contended that each subcontractor continued to work after this order became effective, looking to the Government for this payment of overtime. The judge in charging the jury placed only the one issue before them and that was whether or not they could find by the evidence that the Government had ever agreed to pay this overtime to the Spohn Co. The jury found for the Spohn Co., 11 members signing the verdict, and the Whike Co. was compelled to pay the entire claim of the Spohn Co., which amounted to $2,381.33, with interest at 6 percent from December 19, 1943. This was really the test case for all the other subcontractors and as the situation now stands the Whike Co. will be compelled to pay all of the subcontractors' claims, in addition to losing approximately $9,000 on their own contract. Mr. Whike in this case made an offer to the FPHA to construct the Jackson Park project at a stipulated price which was based on a 40-hour week; the contract being further amended to read that in the event the area was placed on a 48-hour workweek he would be reimbursed for these extra expenses. From purely a legal standpoint, in my opinion, Mr. Whike never agreed to work a 48-hour workweek and therefore there was never a contract entered into except on the basis of 40 hours per week. Meeting of minds is a cardinal principle of contracts and there was certainly no contract with the Government except for a 40-hour week. I cannot bring myself to believe that it is the intention of any Government agency for contractors to lose money doing work for the Government. I sincerely hope you will bring this matter before your fine committee soon and I want to assure you that if I can at any time be of assistance to you you have but to command me. Sincerely yours. HENDERSON H. CARSON, M. C. |