A-94651, MAY 6, 1938, 17 COMP. GEN. 923

A-94651: May 6, 1938

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CONTRACT VA98H-1257 WAS ENTERED INTO BY THE SUPPLY OFFICER. PAYMENT OF THE AMOUNT STIPULATED BY THE CONTRACT WAS EFFECTED ON VOUCHER NO. 2-64715. THE GUARANTY DEPOSIT OF THE CONTRACTOR WAS RETURNED TO THE FIRM BY VOUCHER NO. 2-64875. IT WAS DISCOVERED IN NOVEMBER 1937 THAT THE CONTRACTOR HAD REMOVED FROM THE SITE OF THE WORK 70 OLD BOILER TUBES AND ON NOVEMBER 17. A FEW WEEKS LATER WHICH STATED THAT WE WERE TO REMOVE THEM IMMEDIATELY. THIS FIRM WAS NOT AWARDED CONTRACT ON THE PROJECT AND THEIR GUARANTY CHECK HAS NOT BEEN DEPOSITED IN THE TREASURY OF THE UNITED STATES. OF THE 70 BOILER TUBES WHICH WERE TAKEN FROM THE SITE OF THE WORK BY THE CONTRACTOR. TO THE EFFECT THAT THE OLD BOILER TUBES WOULD HAVE A VALUE OF $8.00 PER TON.

A-94651, MAY 6, 1938, 17 COMP. GEN. 923

SET-OFF - BID GUARANTEES - ILLEGAL REMOVAL OF GOVERNMENT PROPERTY WHERE A CONTRACTOR ILLEGALLY REMOVED CERTAIN OLD PUBLIC PROPERTY FROM THE GOVERNMENT SITE UPON COMPLETION OF CONTRACT FOR REPLACEMENT THEREOF, AN AMOUNT REPRESENTING THE FAIR AND REASONABLE VALUE OF THE REMOVED PROPERTY MAY BE DEDUCTED FROM THE PROCEEDS OF GUARANTY CHECK SUBMITTED BY CONTRACTOR WITH ITS BID ON ANOTHER PROJECT.

ACTING COMPTROLLER GENERAL ELLIOTT TO THE ADMINISTRATOR OF VETERANS' AFFAIRS, MAY 6, 1938:

THERE HAS BEEN RECEIVED YOUR LETTER OF APRIL 29, 1938, AS FOLLOWS:

UNDER DATE OF NOVEMBER 6, 1937, CONTRACT VA98H-1257 WAS ENTERED INTO BY THE SUPPLY OFFICER, VETERANS' ADMINISTRATION FACILITY, CASTLE POINT, NEW YORK, UNDER AUTHORIZATION OF MR. H. W. GARDNER, CHIEF, MAINTENANCE AND OPERATION DIVISION, CONSTRUCTION SERVICE, VETERANS' ADMINISTRATION, DATED NOVEMBER 2, 1937, WITH THE FIRM OF SULLIVAN AND CRAVEN COMPANY, INC., FOR INSTALLATION OF 121 BOILER TUBES, 18 FEET LONG, 4 INCHES DIAMETER, 10 GAUGE, IN BOILERS NOS. 2 AND 5, VETERANS' ADMINISTRATION FACILITY, CASTLE POINT, NEW YORK, FOR THE SUM OF $1,359.00. UPON THE SATISFACTORY COMPLETION OF THE CONTRACT WORK, PAYMENT OF THE AMOUNT STIPULATED BY THE CONTRACT WAS EFFECTED ON VOUCHER NO. 2-64715, DATED DECEMBER 7, 1937, AND THE GUARANTY DEPOSIT OF THE CONTRACTOR WAS RETURNED TO THE FIRM BY VOUCHER NO. 2-64875, DATED DECEMBER 7, 1937, ACCOUNT OF G. F. ALLEN, SYMBOL 11- 564.

IT WAS DISCOVERED IN NOVEMBER 1937 THAT THE CONTRACTOR HAD REMOVED FROM THE SITE OF THE WORK 70 OLD BOILER TUBES AND ON NOVEMBER 17, 1937, THE STATION REQUESTED THE FIRM TO RETURN THESE TUBES. THE CONTRACTOR REPLIED ON NOVEMBER 20, 1937, STATING IN PART THAT "WE QUOTE PRICES LOWER BECAUSE WE EXPECT TO KEEP THE MATERIAL WE TAKE FROM THE PREMISES. A FEW YEARS AGO WHEN WE WORKED ON GOVERNOR'S ISLAND AND LEFT THE TUBES ON THE JOB, WE RECEIVED A LETTER FROM WASHINGTON, A FEW WEEKS LATER WHICH STATED THAT WE WERE TO REMOVE THEM IMMEDIATELY. THIS CAUSED US A LOT OF TROUBLE AND WE DECIDED TO AVOID IT THIS TIME BY TAKING THE TUBE SWITH US WHEN WE FINISHED THIS JOB.' SUBSEQUENT CORRESPONDENCE WITH THE FIRM HAS NOT RESULTED IN THE RETURN OF THE OLD BOILER TUBES AND IT HAS BEEN CONCLUDED THAT THE CONTRACTOR DOES NOT INTEND TO RETURN THEM. IN THE MEANTIME, HOWEVER, THE FIRM OF SULLIVAN AND CRAVEN COMPANY, INC., SUBMITTED A BID ON ANOTHER BOILER RETUBING PROJECT AT THE FACILITY AND HAS SUBMITTED WITH THAT BID A CERTIFIED CHECK NO. 4106, IN THE AMOUNT OF $46.25, DRAWN ON THE BANK OF THE MANHATTAN COMPANY, GREENPOINT, NEW YORK CITY. THIS FIRM WAS NOT AWARDED CONTRACT ON THE PROJECT AND THEIR GUARANTY CHECK HAS NOT BEEN DEPOSITED IN THE TREASURY OF THE UNITED STATES.

WITH A VIEW TO ESTABLISHING THE VALUE, AS SCRAP IRON, OF THE 70 BOILER TUBES WHICH WERE TAKEN FROM THE SITE OF THE WORK BY THE CONTRACTOR, THE STATION CONTACTED SEVERAL JUNK DEALERS IN THE VICINITY FOR THE PURPOSE OF OBTAINING APPRAISALS BUT SUCCEEDED IN ELICITING ONLY ONE EXPRESSION OF OPINION ON THIS SUBJECT. MR. I. SERALNICK OF NEWBURGH, NEW YORK, SUBMITTED A WRITTEN STATEMENT ON FEBRUARY 19, 1938, TO THE EFFECT THAT THE OLD BOILER TUBES WOULD HAVE A VALUE OF $8.00 PER TON. AS THE WEIGHT OF THE TUBES VARIED BETWEEN 99 AND 101 POUNDS EACH, THE TOTAL WEIGHT OF TUBES TAKEN BY THE CONTRACTOR WOULD BE APPROXIMATELY 7,000 POUNDS OR 3 1/2 TONS, WHICH AT $8.00 PER TON WOULD HAVE A VALUE OF $28.00.

IN VIEW OF THE CIRCUMSTANCES ABOVE RECITED, IT IS RESPECTFULLY REQUESTED THAT I BE INFORMED AS TO WHETHER IT WOULD BE PROPER FOR THE VETERANS' ADMINISTRATION TO DEPOSIT THE GUARANTY CHECK OF SULLIVAN AND CRAVEN COMPANY, INC., AND DEDUCT $28.00 FROM THE PROCEEDS THEREOF FOR CREDIT AS MISCELLANEOUS RECEIPTS 365160, LEAVING A BALANCE OF $18.25 FOR REFUND TO THIS FIRM.

IF THE SUM OF $28 REPRESENTS THE FAIR AND REASONABLE VALUE OF THE PUBLIC PROPERTY ILLEGALLY REMOVED BY SULLIVAN AND CRAVEN CO., INC.,THE QUESTION STATED IN THE CONCLUDING PARAGRAPH OF YOUR LETTER IS ANSWERED IN THE AFFIRMATIVE. SEE MCKNIGHT V. UNITED STATES, 97 FED. 208, 215; AND TREADWELL V. UNITED STATES, 266 FED. 350, CERTIORARI DENIED 253 U.S. 496.