B-136216, JUN. 10, 1958
Highlights
INC.: REFERENCE IS MADE TO YOUR LETTER OF MAY 7. WHICH WERE IN EXCESS OF THE QUANTITIES OF MATERIALS AUTHORIZED FOR USE THEREUNDER. THE BASIS FOR YOUR REQUEST IS THAT THE GOVERNMENT CHARGED YOU WITH THE VALUE OF EXCESSIVE QUANTITIES OF MATERIALS UTILIZED IN THE PERFORMANCE OF THE CONTRACT CITED WITHOUT ALLOWING YOU ANY CREDIT FOR THE MATERIALS SAVED AND TURNED BACK TO THE GOVERNMENT UNDER THREE CONCURRENT CONTRACTS ENTERED INTO WITH BUSINESS ENTERPRISES WHICH WERE DIRECTLY AFFILIATED WITH THE L. A REFERENCE TO THESE CONTRACTS DISCLOSES THAT THEY WERE ENTERED INTO INDIVIDUALLY WITH THE RESPECTIVE FIRMS OF RYDAL SPORTSWEAR. THE THREE FIRMS MENTIONED ARE AFFILIATED BY VIRTUE OF OWNERSHIP. THERE IS NOTHING ON THE FACE OF THE CONTRACTS INDICATIVE OF SUCH FACT.
B-136216, JUN. 10, 1958
TO L. W. FOSTER SPORTSWEAR COMPANY, INC.:
REFERENCE IS MADE TO YOUR LETTER OF MAY 7, 1958, REQUESTING RECONSIDERATION OF OUR SETTLEMENT DATED APRIL 8, 1958, WHICH DISALLOWED YOUR CLAIM FOR $13,782.55 REPRESENTING THE DETERMINED VALUE OF GOVERNMENT- FURNISHED MATERIALS UTILIZED IN THE PERFORMANCE OF CONTRACT NO. DA-30-280- QM-28865, DATED JUNE 27, 1952, WITH RYDAL SPORTSWEAR, INC., WHICH WERE IN EXCESS OF THE QUANTITIES OF MATERIALS AUTHORIZED FOR USE THEREUNDER.
THE BASIS FOR YOUR REQUEST IS THAT THE GOVERNMENT CHARGED YOU WITH THE VALUE OF EXCESSIVE QUANTITIES OF MATERIALS UTILIZED IN THE PERFORMANCE OF THE CONTRACT CITED WITHOUT ALLOWING YOU ANY CREDIT FOR THE MATERIALS SAVED AND TURNED BACK TO THE GOVERNMENT UNDER THREE CONCURRENT CONTRACTS ENTERED INTO WITH BUSINESS ENTERPRISES WHICH WERE DIRECTLY AFFILIATED WITH THE L. W. FOSTER SPORTSWEAR COMPANY, INC. --- ALLEGEDLY THE PARENT CORPORATION.
A REFERENCE TO THESE CONTRACTS DISCLOSES THAT THEY WERE ENTERED INTO INDIVIDUALLY WITH THE RESPECTIVE FIRMS OF RYDAL SPORTSWEAR, INC., HELD- FOSTER CORPORATION AND THE HOWARD MANUFACTURING COMPANY, AND NOT WITH THE L. W. FOSTER SPORTSWEAR COMPANY, INC., THE ALLEGED PARENT CORPORATION. THE THREE FIRMS MENTIONED ARE AFFILIATED BY VIRTUE OF OWNERSHIP, OR OTHERWISE, WITH THE LATTER COMPANY, THERE IS NOTHING ON THE FACE OF THE CONTRACTS INDICATIVE OF SUCH FACT, NOR IS THERE ANYTHING ELSEWHERE OF RECORD WHICH WOULD INDICATE THAT THEY WERE EXECUTED BY THOSE COMPANIES MERELY AS AFFILIATES OF THE PARENT ORGANIZATION. EVEN IF IT WERE ESTABLISHED THAT THE CONTRACTS WERE SO EXECUTED, EACH OF THE FOUR CONTRACTS REFERRED TO CONSTITUTES A SEPARATE AND DISTINCT AGREEMENT, WHOLLY INDEPENDENT OF THE OTHERS, WHICH FIXES AND ESTABLISHES THE INDIVIDUAL RIGHTS AND OBLIGATIONS OF THE PARTIES THERETO.
NOT ONLY DOES ARTICLE 29, SUBPARAGRAPH (H), OF THESE CONTRACTS PLACE UPON THE INDIVIDUAL CONTRACTORS THE AFFIRMATIVE DUTY OF RETURNING TO THE GOVERNMENT THE MATERIALS NOT UTILIZED IN ITS PERFORMANCE, BUT THE SAID ARTICLE 29, SUBPARAGRAPH (D), EXPRESSLY RESTRICTS THE USE OF GOVERNMENT- FURNISHED PROPERTY "ONLY FOR THE PERFORMANCE OF THIS CONTRACT.'
IT IS MANIFEST, THEREFORE, THAT THE CONTRACTS DID NOT AUTHORIZE, EITHER DIRECTLY OR BY IMPLICATION, THE CO-MINGLING OF THESE GOVERNMENT FURNISHED MATERIALS, AND IF THE INSTANT CONTRACTOR, OR ANY OF ITS AFFILIATES, ACTUALLY RESORTED TO SUCH PRACTICE, AS ALLEGED, IT DID SO ENTIRELY AT ITS OWN RISK AND WITHOUT REGARD TO THE MANIFEST TERMS OF ITS CONTRACT. THIS REGARD, IT APPEARS THAT ON DECEMBER 8, 1952, A LETTER WAS ADDRESSED TO THE HOWARD MANUFACTURING COMPANY REQUESTING THAT GOVERNMENT-FURNISHED MATERIALS BE SEPARATED BY CONTRACT AND ON FEBRUARY 23, 1953, THE COMPANY REPLIED THAT ALL MATERIALS HAD BEEN SEGREGATED.
ACCORDINGLY, YOU ARE ADVISED THAT OUR SETTLEMENT OF APRIL 8, 1958, MUST BE, AND IS, SUSTAINED.