B-141889, MAR. 28, 1960

B-141889, MAR. 28, 1960

TO PROTECTIVE COATING, INC:

REFERENCE IS MADE TO YOUR LETTER OF MARCH 3, 1960, RELATIVE TO YOUR INDEBTEDNESS TO THE UNITED STATES IN THE AMOUNT OF $458.80, PLUS INTEREST, REPRESENTING EXCESS COST INCURRED BY THE UNITED STATES AS A RESULT OF YOUR DEFAULT UNDER CONTRACT NO. N189-40999A DATED SEPTEMBER 26, 1958, FOR FURNISHING CERTAIN COAL TAR PRODUCTS TO THE NAVAL SUPPLY CENTER, NORFOLK, VIRGINIA. ALL SUBSTANTIAL QUESTIONS INVOLVED APPEAR TO HAVE BEEN QUITE THOROUGHLY COVERED IN THE VOLUMINOUS CORRESPONDENCE WHICH HAS PASSED BETWEEN YOUR CORPORATION AND VARIOUS OFFICERS AND AGENTS OF THE GOVERNMENT DURING THE PERIOD OF ALMOST 18 MONTHS WHICH HAS ELAPSED SINCE OCTOBER 6, 1958--- THE DATE OF YOUR TELEGRAM ALLEGING ERROR IN YOUR BID. HOWEVER, THIS LETTER IS WRITTEN FOR THE PURPOSE OF COVERING SUCH OF YOUR CONTENTIONS AS MAY NOT HAVE BEEN SPECIFICALLY ANSWERED HERETOFORE.

IT APPEARS THAT YOU NO LONGER QUESTION THE VALIDITY OF THE GOVERNMENT'S CLAIM FROM A STRICTLY LEGAL VIEWPOINT. YOU STATE, HOWEVER, THAT "HAD IT BEEN A LARGE COMPANY INVOLVED THE CONTRACTING OFFICER WOULD NOT HAVE TAKEN THE ORIGINAL ACTION OF DEMANDING PAYMENT.' AS STATED, IN SUBSTANCE, IN OUR LETTER TO YOU DATED FEBRUARY 15, 1960, THE CONTRACTING OFFICER WAS UNDER LEGAL OBLIGATION TO AWARD THE CONTRACT TO YOU. WHEN YOU DECLINED TO FURNISH THE PRODUCTS CALLED FOR IN THE CONTRACT, THOSE PRODUCTS WERE PROCURED FROM ANOTHER SOURCE. IT WAS LIKEWISE THE LEGAL DUTY OF THE CONTRACTING OFFICER, UNDER THE SPECIFIC PROVISIONS OF THE CONTRACT, TO CHARGE YOU WITH THE RESULTING EXCESS COST. IT IS THE POLICY AND PRACTICE OF THE GOVERNMENT TO AVOID DISCRIMINATION BETWEEN SMALL BUSINESS CONCERNS AND OTHER CONCERNS IN DETERMINING THE VALIDITY OF CONTRACTS AND CLAIMS, AND THERE IS NOT THE SLIGHTEST INDICATION IN THE FILE THAT ANY SUCH DISCRIMINATION WAS PRACTICED IN THE INSTANT MATTER. THE ACTION OF THE CONTRACTING OFFICER HAS BEEN APPROVED, AND THE VALIDITY OF THE GOVERNMENT'S CLAIM CONFIRMED, AT VARIOUS LEVELS IN THE DEPARTMENT OF THE NAVY AND IN THIS OFFICE. IT MAY BE ADDED THAT THIS OFFICE IS A PART OF THE LEGISLATIVE BRANCH OF THE GOVERNMENT, BEING ENTIRELY SEPARATE FROM THE EXECUTIVE DEPARTMENTS, AND CONSIDERS IMPARTIALLY ALL MATTERS PERTAINING TO THE GOVERNMENT SUBMITTED HERE BY GOVERNMENT AGENCIES OR PRIVATE PARTIES.

AS SUGGESTED IN YOUR LETTER OF MARCH 3, 1960, RELIEF FROM ERRORS IN BIDS IS FREQUENTLY GIVEN UNDER CERTAIN CIRCUMSTANCES. HOWEVER, THE PRACTICE OF GOVERNMENT DEPARTMENTS AND AGENCIES AND THE DECISIONS OF THE COURTS UNIFORMLY ARE TO THE EFFECT THAT SUCH RELIEF IS NOT GIVEN IN CASES SUCH AS THE INSTANT MATTER, INVOLVING A UNILATERAL MISTAKE BY THE BIDDER AND THE ABSENCE OF NOTICE, ACTUAL OR CONSTRUCTIVE, BEFORE AWARD, THAT THE BIDDER MADE AN ERROR IN HIS BID. THE FILE INDICATES THAT EACH OFFICER OR AGENT OF THE GOVERNMENT INVOLVED IN THE INSTANT MATTER HAS PERFORMED HIS DUTY IN GOOD FAITH AND PURSUANT TO THE AUTHORITY PROPERLY VESTED IN HIM AND THERE IS NOT FOUND ANY BASIS FOR A BELIEF OR SUSPICION THAT THERE HAS BEEN ANY DISCRIMINATION AGAINST YOUR CORPORATION AS A SMALL BUSINESS OR OTHERWISE.

IT MAY BE STATED THAT THIS OFFICE IS WITHOUT AUTHORITY TO DETERMINE CLAIMS BY OR AGAINST THE UNITED STATES SOLELY ON THE BASIS OF EQUITABLE OR MORAL CONSIDERATIONS. ITS JURISDICTION IS RESTRICTED TO THE CONSIDERATION AND DETERMINATION OF SUCH MATTERS IN ACCORDANCE WITH THE APPLICABLE LAW OR UNDER THE TERMS OF A VALID AGREEMENT EXECUTED PURSUANT TO LAW. MOREOVER, IN THE INSTANT MATTER, HAVING REGARD FOR THE COMPARATIVELY SMALL AMOUNT OF THE ALLEGED ERROR AND THE FACT THAT THE SECOND AND THIRD LOWEST BIDS WERE ONLY $143.75 AND $217.50 HIGHER THAN YOUR BID OF $4,062.50, IT APPEARS THAT IF YOU HAD FULFILLED THE CONTRACT PROMPTLY, AS YOU WERE LEGALLY BOUND TO DO, YOU WOULD HAVE SUFFERED LITTLE IF ANY FINANCIAL LOSS. IN ADDITION TO THE CONTRACT PROVISION FOR CHARGING ANY EXCESS COST TO A DEFAULTING CONTRACTOR, DEFINITE NOTICE WAS GIVEN YOU BY LETTERS DATED OCTOBER 21, 1958, AND JANUARY 30, 1959, THAT IN THE EVENT OF YOUR DEFAULT YOU WOULD BE CHARGED WITH ANY EXCESS COST RESULTING FROM PROCUREMENT FROM ANOTHER SOURCE; AND BY A LETTER DATED MARCH 11, 1959, YOU WERE ADVISED THAT THE CONTRACT WAS TERMINATED FOR DEFAULT AND THAT ANY RESULTING EXCESS COST WOULD BE CHARGED AGAINST YOU.

YOU REQUEST COMMENT ON "THE PROPOSED METHOD OF PAYMENT" HERETOFORE OFFERED BY YOU. IN YOUR LETTER OF AUGUST 7, 1959, TO THE DEPARTMENT OF THE NAVY, TRANSMITTING A PAYMENT OF $10, YOU PROPOSED TO PAY THE INDEBTEDNESS AT THE RATE OF $10 PER YEAR. IN A LETTER DATED AUGUST 26, 1959, FROM THE DEPARTMENT OF THE NAVY, YOUR PROPOSAL WAS REJECTED, IT BEING NOTED THAT YOUR PROPOSED PAYMENT OF $10 PER YEAR WOULD NOT EQUAL THE INTEREST OF $24.11 PER YEAR. UNDER DATE OF OCTOBER 16, 1959, YOU MADE ANOTHER PAYMENT IN THE AMOUNT OF $24.11 WHICH APPARENTLY WAS INTENDED GENERALLY TO PAY INTEREST FOR ONE YEAR, LEAVING THE ORIGINAL PAYMENT OF $10 TO APPLY ON THE PRINCIPAL AMOUNT. ALTHOUGH, AS SUGGESTED IN YOUR LETTER OF JANUARY 26, 1960, THE GOVERNMENT SOMETIMES AGREES TO PERMIT LIQUIDATION OF AN INDEBTEDNESS BY INSTALLMENT PAYMENTS, THE METHOD OF PAYMENT PROPOSED BY YOU OBVIOUSLY WAS WHOLLY INADEQUATE AND UNACCEPTABLE AND NO OFFICER OR AGENT OF THE GOVERNMENT WOULD HAVE BEEN JUSTIFIED, IN THE PROPER PERFORMANCE OF HIS DUTIES, IN ACCEPTING SUCH A PROPOSAL.

IN THE POSTSCRIPT TO YOUR LETTER OF MARCH 3, 1960, YOU QUESTION THE PROPRIETY OF INTEREST CHARGES IN THIS MATTER. WHILE SUCH CHARGES ARE LEGALLY PROPER, WE WILL, IN ORDER TO FACILITATE EARLY SETTLEMENT OF THIS CLAIM, WAIVE ANY CHARGE FOR INTEREST. ACCORDINGLY, THE AMOUNT OF $7.09 PREVIOUSLY APPLIED TO INTEREST WILL BE APPLIED TO THE PRINCIPAL AMOUNT LEAVING DUE A BALANCE OF $451.71.

FOR THE REASONS ABOVE SET OUT, IT IS AGAIN REQUESTED THAT YOU MAKE PROMPT PAYMENT IN THE AMOUNT OF $451.71, ANY CHECK, DRAFT OR MONEY ORDER TO BE MADE PAYABLE TO THE UNITED STATES GENERAL ACCOUNTING OFFICE AND ADDRESSED TO:

U.S. GENERAL ACCOUNTING OFFICE

P.O. BOX 2610

WASHINGTON 13, D.C.

IN THE INTEREST OF SIMPLIFICATION AND SATISFACTORY DISPOSITION OF THIS MATTER, IT IS SUGGESTED THAT THE ENTIRE AMOUNT DUE SHOULD BE PAID PROMPTLY IN ONE SUM. HOWEVER, IF YOU PREFER TO TAKE MORE TIME TO COMPLETE PAYMENT, OUR OFFICE WILL OFFER NO OBJECTION TO PAYMENT OF THE INDEBTEDNESS IN NOT MORE THAN FIVE APPROXIMATELY EQUAL MONTHLY INSTALLMENTS, PAYMENT TO BE COMPLETED WITHIN SIX MONTHS FROM THE DATE OF THIS LETTER.

UNLESS, WITHIN 10 DAYS FROM THE DATE OF THIS LETTER, THERE IS RECEIVED FULL PAYMENT OF THE AMOUNT DUE OR DEFINITE ACCEPTANCE OF THE PLAN FOR INSTALLMENT PAYMENTS HEREINABOVE SUGGESTED TOGETHER WITH PAYMENT OF THE FIRST INSTALLMENT, THIS MATTER WILL BE REFERRED TO THE ATTORNEY ..END :