B-124089, OCT. 9, 1956

B-124089, OCT. 9, 1956

TO MR. DON B. REAGAN:

REFERENCE IS MADE TO YOUR LETTERS DATED SEPTEMBER 7 AND 8, 1956, RELATIVE TO THE CLAIM OF THE GREAT LAKES MANUFACTURING CORPORATION, WHEREIN YOU AGAIN PROTEST THE ACTION TAKEN BY US IN APPLYING THE BALANCE OTHERWISE DUE UNDER CONTRACTS NOS. AF33/600/-24370 AND AF33/600/-23725, IN PARTIAL LIQUIDATION OF THE CORPORATION'S INDEBTEDNESS TO THE UNITED STATES. MOST OF THE CONTENTIONS MADE IN YOUR PRESENT CORRESPONDENCE PREVIOUSLY HAVE BEEN RAISED BY YOU AND HAVE BEEN THE SUBJECT OF PRIOR DECISIONS. FOR EXAMPLE, YOU AGAIN DENY THE LEGALITY OF THE GOVERNMENT'S CLAIM, WHEREAS IN YOUR LETTER OF JULY 2, 1953, TO THE ADMINISTRATIVE OFFICE YOU ACKNOWLEDGED THE CORRECTNESS THEREOF, BASED ON PRICE REDETERMINATION AGREEMENTS, AND SUGGESTED A METHOD OF LIQUIDATION. YOU AGAIN DENY ANY RELATIONSHIP BETWEEN THE GREAT LAKES MANUFACTURING CORPORATION AND THE GREAT LAKES MANUFACTURING COMPANY. NEVERTHELESS, IN YOUR LETTER DATED MAY 20, 1954, ALSO TO THE ADMINISTRATIVE OFFICE, YOU ACKNOWLEDGED ONE TO BE A SUCCESSOR TO THE OTHER WITH ALL RIGHTS AND LIABILITIES BEING ASSUMED BY THE LATER CONCERN. AS PREVIOUSLY STATED, A REFUTATION OF THOSE SAME CONTENTIONS WAS SET FORTH IN DETAIL IN OUR DECISIONS OF JULY 27, 1955, AND MARCH 28, 1956, CITING AMPLE FACTS AND AUTHORITY FOR DISREGARDING THE SEPARATE ENTITY THEORY UPON WHICH YOU RELY, AND THE MATTERS SET FORTH IN THESE DECISIONS WILL NOT BE REPEATED.

YOU AGAIN URGE THAT OUR OFFICE HAD NO AUTHORITY TO SET OFF THE AMOUNT DUE UNDER THE CITED CONTRACTS IN VIEW OF THE PROVISIONS OF THE ASSIGNMENT OF CLAIMS ACT OF 1940, AS AMENDED, 31 U.S.C. 203. IN REPLY WE CAN ONLY REPEAT THAT THE ENTIRE AMOUNT DUE UNDER THE CONTRACTS WOULD HAVE BEEN APPLIED TO THE INDEBTEDNESS HAD THERE NOT EXISTED A BALANCE DUE THE CALUMET NATIONAL BANK OF HAMMOND UNDER ONE OF THE ASSIGNMENTS. THE "NO SETOFF" PROVISION OF THE ACT WAS DESIGNED TO PROTECT THE INTERESTS OF LENDING INSTITUTIONS IN FINANCING CONTRACTORS WORKING ON GOVERNMENT CONTRACTS, BUT DOES NOT CREATE ANY RIGHTS IN THOSE CONTRACTORS. THE STATUTE REQUIRES THAT A PROPERLY EXECUTED ASSIGNMENT BE RECOGNIZED, THEREBY ESTABLISHING IN THE ASSIGNEE A LEGAL RIGHT TO DEMAND PAYMENT OF THE PROCEEDS OF A CONTRACT TO THE EXTENT OF THE UNPAID ADVANCES MADE. BUT, THERE IS NOTHING IN THE ACT AUTHORIZING THE USE OF AN ASSIGNMENT AS A DEVICE MERELY FOR COLLECTION, PARTICULARLY WHERE THE GOVERNMENT'S RIGHTS MAY BE JEOPARDIZED. THE SETOFF HERE WAS MADE PURSUANT TO A COMMON LAW RIGHT UNIVERSALLY RECOGNIZED, AND TO AVOID THE CIRCUITY OF ACTION WHICH WAS REFERRED TO BY THE COURT AT PAGE 537 IN THE CASE OF STONE V. WHITE, 301 U.S. 532. THAT PHASE OF YOUR ARGUMENT ALSO WAS FULLY COVERED PREVIOUSLY BY OUR LETTER OF AUGUST 28, 1956.

IN REALITY YOUR LATEST CORRESPONDENCE CONTAIN ARGUMENTS OF A GENERALLY REPETITIOUS NATURE AND BRINGS NOTHING TO OUR ATTENTION WHICH WAS NOT FULLY CONSIDERED BY US IN THE DISPOSITION OF YOUR PREVIOUS PROTESTS. SINCE ALL THE FACTS NECESSARY FOR A COMPLETE DELIBERATION OF THE CASE ARE CONTAINED IN THE FILES SUBMITTED BY YOU AND BY THE DEPARTMENT OF THE AIR FORCE, NO USEFUL PURPOSE WOULD BE SERVED IN UNDERTAKING AN INVESTIGATION OF YOUR RECORDS. ALSO, THERE IS REJECTED YOUR SUGGESTION THAT A HEARING BE HELD IN THE MATTER SINCE DECISIONS OF THE GENERAL ACCOUNTING OFFICE UNDER ITS STATUTORY AUTHORITY MAY BE RENDERED ONLY ON THE WRITTEN RECORD, AND THEREFORE ORAL ARGUMENT SO PRESENTED WOULD BE USELESS UNLESS THE SUBSTANCE OF SUCH ARGUMENT BE REDUCED TO WRITING.

IN VIEW OF THE EXTENT AND NATURE OF THE NUMEROUS LETTERS RECEIVED FROM YOU IN REGARD TO THIS CASE WE HAVE NO ALTERNATIVE BUT TO ADVISE YOU THAT UNLESS NEW AND MATERIAL EVIDENCE IS RECEIVED, OR LEGAL CONTENTIONS ADVANCED, WHICH WERE NOT HERETOFORE CONSIDERED, FURTHER CORRESPONDENCE IN THE MATTER WILL SERVE NO USEFUL PURPOSE.