B-150760, APR. 12, 1963

B-150760, APR. 12, 1963

TO PHOTRON INSTRUMENT COMPANY:

WE HAVE RECEIVED YOUR LETTER OF JANUARY 24, 1963, REQUESTING RELIEF FROM CERTAIN ACTIONS TAKEN BY THE DEPARTMENT OF THE ARMY IN CONNECTION WITH A TERMINATION OF YOUR CONTRACT NO. DA-29-040-ORD-1627. YOU CLAIM THAT YOU WERE NOT ALLOWED SUFFICIENT TIME AFTER BEING ASSESSED EXCESS COSTS OF $6.692.70 ON APRIL 21, 1961, TO ARRANGE FOR PAYMENT OR SETTLEMENT, AND THAT YOU WERE UNJUSTLY PLACED ON THE "GOVERNMENT BANKRUPTCY LIST.'

THE RECORD ESTABLISHES THAT AFTER LOSING AN APPEAL BEFORE THE ARMED SERVICES BOARD OF CONTRACT APPEALS (ASBCA NO. 6231) FROM THE CONTRACTING OFFICER'S DETERMINATION THAT YOU HAD DEFAULTED ON THE CONTRACT, AND AFTER RECEIVING A DEMAND FOR IMMEDIATE PAYMENT OF THE EXCESS COSTS, YOU FILED A NOTICE OF APPEAL WITH THE ASBCA WHICH WAS DENIED UNDER ASBCA NO. 7523 ON APRIL 20, 1962. ON AUGUST 27, 1962, YOU WERE AGAIN REQUESTED TO MAKE IMMEDIATE PAYMENT. THE ADMINISTRATIVE AGENCY STATES THAT YOU REQUESTED THE CONTRACTING OFFICER TO RECONSIDER THE CASE. THIS REQUEST WAS DENIED IN VIEW OF THE FACT THAT YOUR CASE HAD ALREADY BEEN TWICE CONSIDERED AND DENIED BY THE ASBCA.

ON OCTOBER 16, 1962, THE COMPTROLLER OF THE ARMY AGAIN DEMANDED PAYMENT OF THE DEBT, AND ADVISED YOU THAT IF YOU COULD NOT PAY IN ONE LUMP SUM, A PROPOSAL OF MONTHLY INSTALLMENT PAYMENTS WOULD BE CONSIDERED. ON NOVEMBER 5, 1962, YOU AGAIN REQUESTED RECONSIDERATION OF YOUR CASE, AND STATED THAT YOU COULD NOT PAY THE DEBT. YOU MADE NO RESPONSE TO THE SUGGESTION THAT THE DEBT BE PAID IN MONTHLY INSTALLMENTS. ON NOVEMBER 8, 1962, THE DEPARTMENT OF THE ARMY SENT THE CASE TO OUR OFFICE AS ADMINISTRATIVELY UNCOLLECTIBLE, AND REQUESTED THE FINANCE AND ACCOUNTS OFFICE, WASHINGTON, D.C., TO PLACE YOUR NAME ON THE LIST OF "CONTRACTORS INDEBTED TO THE UNITED STATES.' ON NOVEMBER 30, 1962, YOUR NAME APPEARED ON THIS LIST. THIS WOULD APPEAR TO BE THE LIST WHICH YOU REFER TO AS THE "GOVERNMENT BANKRUPTCY LIST.'

ON DECEMBER 27, 1962, OUR OFFICE NOTIFIED YOU OF A POSSIBLE SETOFF IF IMMEDIATE SETTLEMENT OF THE DEBT WAS NOT MADE. A SETOFF TO COVER YOUR DEBT WAS MADE AGAINST PAYMENTS DUE YOU UNDER CONTRACT NO. AF 36/600-12902 ON JANUARY 4, 1963. ON JANUARY 25, 1963, THE FINANCE AND ACCOUNTS OFFICE WAS ADVISED TO REMOVE YOUR NAME FROM THE LIST OF "CONTRACTORS INDEBTED TO THE UNITED TES.'

FROM THE FOREGOING, IT APPEARS THAT YOU WERE GIVEN MORE THAN ADEQUATE TIME TO PAY A DEBT OWED TO THE GOVERNMENT. THE FACT THAT A SETOFF WAS MADE ONLY A FEW DAYS AFTER YOU WERE NOTIFIED OF THIS POSSIBILITY DOES NOT DIMINISH THE IMPORTANCE OF THE FACT THAT YOU WERE GIVEN SEVERAL MONTHS TO MAKE PAYMENT OR OFFER A SCHEME OF SETTLEMENT.

YOU ALSO ALLEGE THAT THE SPECIFICATIONS REQUIREMENT OF THE CONTRACT ON WHICH YOU WERE DECLARED IN DEFAULT WAS UNREASONABLE. THE ADMINISTRATIVE AGENCY REPORTS THAT THESE SPECIFICATIONS HAVE BEEN MET BY OTHER COMPANIES BOTH BEFORE AND AFTER THE SUBJECT AWARD. IT IS ALSO REPORTED THAT ABSOLUTELY NO CHANGES WERE MADE IN THE SPECIFICATION FOR THE REPURCHASE CONTRACT, AND THAT THE SUCCESSFUL BIDDER FOR THE REPURCHASE CONTRACT ALSO MET THIS SPECIFICATION. UNDER THESE CIRCUMSTANCES, WE SEE NO BASIS UPON WHICH TO OBJECT TO THE DETERMINATION BY THE ASBCA IN NO. 6231 THAT THE SPECIFICATIONS WERE NOT UNREASONABLE.

FINALLY, YOU ALLEGE THAT THE REPURCHASE WAS NOT MADE ON AN OPEN MARKET BUT PURCHASED FROM THE HIGHEST BIDDER UNDER THE ORIGINAL INVITATION FOR BIDS OVER ONE YEAR LATER, AND THEREFORE, YOU QUESTION THE REASONABLENESS OF THE PRICE PAID ON THE REPROCUREMENT. HOWEVER, THE ADMINISTRATIVE AGENCY REPORTS THAT THE REPURCHASE WAS MADE BY FORMAL ADVERTISING FOR COMPETITIVE BIDS. SIX BIDS WERE RECEIVED IN RESPONSE TO THE INVITATION FOR BIDS, AND AWARD WAS MADE TO THE LOWEST RESPONSIVE, RESPONSIBLE BIDDER.

FOR THE FOREGOING REASONS, WE SEE NO BASIS UPON WHICH TO OBJECT TO THE ACTIONS TAKEN BY THE DEPARTMENT OF THE ARMY.