[Decision Concerning Claim by DLA Against SBA for Reprocurement Costs for Defective Goods]

The Defense Logistics Agency (DLA) claimed reimbursement for reprocurement costs from the Small Business Administration (SBA) for a small-business subcontractor's defective goods, contending that SBA was liable for the costs under a warranty clause in the contract. SBA contended that the warranty clause was a general provision which applied only to the subcontractor. GAO held that there was no legal basis to hold SBA liable for reprocurement costs because, as a prime contractor, SBA was only a conduit between DLA and the subcontractor and was not responsible for a subcontractor's unsatisfactory performance. Accordingly, the claim was denied.