B-127961, NOV. 2, 1956

B-127961, NOV. 2, 1956

TO AERO ELECTRONICS COMPANY:

REFERENCE IS MADE TO A LETTER OF SEPTEMBER 5, 1956, IN YOUR BEHALF, FROM MR. BERT C. BENTLEY, IN FURTHER REGARD TO OUR SETTLEMENT DATED APRIL 16, 1956, WHEREIN THERE WAS DISALLOWED YOUR CLAIM FOR $7,792.45 AS A SUBCONTRACTOR UNDER CONTRACT NO. AF 33/604/7508, WHICH WAS ENTERED INTO BY THE DEPARTMENT OF THE AIR FORCE WITH MORGAN-RHEIN, INCORPORATED, ON JUNE 29, 1953.

MORGAN-RHEIN, INCORPORATED, WHO IT APPEARS WAS LATER ADJUDGED A BANKRUPT AND FOR WHOM THE TRUSTEE IN BANKRUPTCY ALSO HAS FILED A CLAIM UNDER THE CONTRACT FOR THE SAME AMOUNT OF $7,792.45 ENTERED INTO A FIXED-PRICE SUPPLY CONTRACT WITH THE DEPARTMENT OF THE AIR FORCE ON JUNE 29, 1953. YOU WERE A SUBCONTRACTOR OF MORGAN-RHEIN, INCORPORATED, UNDER THAT CONTRACT WHICH WAS TERMINATED EFFECTIVE JUNE 1, 1954. BY SUPPLEMENTAL AGREEMENT NO. 1, DATED JANUARY 28, 1955, THE TERMINATION CLAIM OF MORGAN- RHEIN, INCORPORATED, WAS SETTLED EXCEPT FOR THE SUBJECT CLAIM WHICH APPEARS TO HAVE INVOLVED SOME SUPPLIES FURNISHED BY YOU AND WHICH WAS EXCLUDED FROM THE SAID SUPPLEMENTAL AGREEMENT. SUBSEQUENTLY, THE GOVERNMENT AND MORGAN-RHEIN, INCORPORATED, AGREED ON NOVEMBER 8, 1955--- SUPPLEMENTAL AGREEMENT NO. 3--- TO A SETTLEMENT OF THE EXCLUDED CLAIM IN THE AMOUNT OF $7,792.45.

MR. BENTLEY'S LETTER OF SEPTEMBER 5, 1956, WHICH IS ACCEPTED AS A REQUEST FOR REVIEW OF THE SETTLEMENT DATED APRIL 16, 1956, IS IN CONSIDERABLE DETAIL BUT PRIMARILY HIS CONTENTIONS, IN SUPPORT OF FAVORABLE CONSIDERATION OF THE CLAIM, APPEAR TO BE THAT CERTAIN NEGOTIATIONS WERE CONDUCTED BETWEEN YOU AND THE TERMINATION CONTRACTING OFFICER WITH RESPECT TO SUCH CLAIMS AS YOU MIGHT HAVE AND THAT SUCH NEGOTIATIONS INVOLVED AUTHORIZATIONS AND DIRECTIONS FOR YOU TO TRANSFER TITLE TO, AND SHIP, CERTAIN "CONTRACTOR-OWNED PROPERTY" TO THE GOVERNMENT WITH THE UNDERSTANDING THAT PAYMENT WAS TO BE MADE TO YOU. MR. BENTLEY ALSO ADVANCES SOME ARGUMENTS AS TO THE GOVERNMENT'S FAILURE TO AFFORD YOU THE RIGHT OF APPEAL TO THE ARMED SERVICES BOARD OF CONTRACT APPEALS OF THE CONCLUSION OF THE TERMINATION CONTRACTING OFFICER AND TO THE MATTER OF PRIVITY OF CONTRACT BETWEEN YOU AND THE GOVERNMENT.

THE POSITION TAKEN BY MR. BENTLEY HAS BEEN THOROUGHLY CONSIDERED AND, WHILE SOME OF THE CONTENTIONS MAY HAVE CONSIDERABLE MERIT, THE MATTER OF PAYMENT OF THE AMOUNT CLAIMED BY YOU MUST BE DETERMINED BY OUR OFFICE ON THE BASIS OF A STRICT LEGAL APPLICATION OF THE TERMS OF THE CONTRACT AND THE AMENDMENTS THERETO. IN THIS CONNECTION, THE RECORD SHOWS THAT SUPPLEMENTAL AGREEMENT NO. 3 DATED NOVEMBER 8, 1955, WAS ENTERED INTO SOLELY FOR THE SETTLEMENT OF THE SPECIFIC CLAIM IN THE AMOUNT OF $7,792.45 HERE AT ISSUE. IN THAT AGREEMENT IT WAS PROVIDED, AMONG OTHER THINGS, THAT "THE GOVERNMENT AGREES TO PAY TO THE CONTRACTOR THE SUM OF $7,792.45.' THE PARTY DESIGNATED IN THE AGREEMENT AS THE "CONTRACTOR" WAS MORGAN-RHEIN, INCORPORATED, THE PRIME CONTRACTOR. IN VIEW OF THE EXPRESS STIPULATION IN THE SAID SUPPLEMENTAL AGREEMENT AS TO THE DESIGNATED PAYEE, OUR OFFICE IS, ON THE PRESENT RECORD, WITHOUT AUTHORITY TO MAKE PAYMENT OF THE AMOUNT CLAIMED TO YOU.