B-162526, OCT. 9, 1967

B-162526, OCT. 9, 1967

CONTRACTS - PAYMENTS - SET OFF DECISION TO AIR FORCE ACCOUNTING AND FINANCE OFFICER, KEESLER AIR FORCE BASE AS TO WHETHER AMOUNTS DUE UNDER ASBCA DETERMINTATION MAY BE APPLIED TO TAX INDEBTEDNESS OF GULF COAST AVIATION, INC. ALTHOUGH DETERMINATION BY BOARD OF CONTRACT APPEALS THAT CHANGES RESULTED IN INCREASED COSTS, ITS DETERMINATION THAT ADDITIONAL MONEY IS DUE UNDER CONTRACT IS NOT ANALOGOUS TO JUDGMENT RENDERED BY COURT, AMOUNT DUE LIKE ANY OTHER CONTRACT PAYMENT MAY BE SET OFF AGAINST CONTRACTOR'S TAX INDEBTEDNESS IN VIEW OF RELEASE BY ASSIGNEE UNDER THE CONTRACT.

TO FIRST LIEUTENANT ROY MARKLE, USAF:

WE HEREBY ACKNOWLEDGE YOUR LETTER (AAF-MS) DATED SEPTEMBER 15, 1967, REQUESTING AN ADVANCE DECISION WHETHER YOU MAY PROPERLY WITHHOLD PAYMENT TO THE CONTRACTOR UNDER A SUPPLEMENTAL AGREEMENT TO CONTRACT AF 22/601/- 1146 AND APPLY THE AMOUNT DUE AGAINST THE CONTRACTOR'S INDEBTEDNESS TO THE INTERNAL REVENUE SERVICE.

THE SUPPLEMENTAL AGREEMENT WAS ENTERED INTO IN SATISFACTION OF ARMED SERVICES BOARD OF CONTRACT APPEALS DECISION NO. 10654, 66-1 BCA 5332, AWARDING AN ADJUSTMENT OF $4,443.48 TO THE CONTRACTOR, GULF COAST AVIATION, INCORPORATED. LIST NO. 78, CONTRACTORS INDEBTED TO THE UNITED STATES, REPORTED THAT GULF COAST AVIATION COMPANY WAS INDEBTED TO THE INTERNAL REVENUE SERVICE IN THE AMOUNT OF $26,365.88, PLUS INTEREST. YOUR EXAMINATION OF THE CONTRACT FILE REVEALED THAT AN ASSIGNMENT OF ALL MONIES DUE OR TO BECOME DUE UNDER THE CONTRACT HAD BEEN MADE BY THE CONTRACTOR IN FAVOR OF THE FIRST NATIONAL BANK OF GREENVILLE, MISSISSIPPI. THE RECORD SUBMITTED TO THIS OFFICE ALSO CONTAINED A RELEASE OF THE ASSIGNMENT BY THE FIRST NATIONAL BANK OF GREENVILLE SINCE THE INDEBTEDNESS SECURED BY THE ASSIGNMENT HAD BEEN LIQUIDATED. YOU REQUEST A DECISION WHETHER PAYMENT UNDER THE SUPPLEMENTAL AGREEMENT RESULTING FROM A DECISION BY THE ARMED SERVICES BOARD OF CONTRACT APPEALS MAY BE WITHHELD AND APPLIED AGAINST THE CONTRACTOR'S INDEBTEDNESS TO THE INTERNAL REVENUE SERVICE.

A REVIEW OF THE DECISION BY THE ARMED SERVICES BOARD OF CONTRACT APPEALS REVEALS THAT THE BOARD AUTHORIZED ADDITIONAL PAYMENTS UNDER THE CHANGES CLAUSE OF THE CONTRACT HOLDING THAT THE REVISED TECHNICAL ORDER UNDER CLAUSE 39 OF THE CONTRACT RESULTED IN INCREASED COSTS TO THE CONTRACTOR AND CONSTITUTED A CHANGE. ALTHOUGH THE BOARD IN SOME INSTANCES MAY ACT IN A QUASI-JUDICIAL CAPACITY, ITS DETERMINATION THAT ADDITIONAL MONEY IS DUE UNDER THE CONTRACT IS NOT ANALOGOUS TO A JUDGMENT RENDERED BY A COURT OF LAW.

ACCORDINGLY, IN VIEW OF THE RELEASE EXECUTED BY THE ASSIGNEE, WE FIND NO REASON WHY THE ADDITIONAL AMOUNT PAYABLE UNDER THE BOARD DECISION MAY NOT PROPERLY BE SET OFF THE SAME AS ANY OTHER AMOUNT DUE UNDER THE CONTRACT.