B-118666, JUL. 17, 1959

B-118666: Jul 17, 1959

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INC.: REFERENCE IS MADE TO YOUR LETTER OF MARCH 28. RECOMMENDING AN INVESTIGATION OF ALL ASPECTS OF WHAT YOU CONSIDER TO HAVE BEEN UNREASONABLE AUDITING AND EXAMINATION PROCEDURES BY THE ADMINISTRATIVE OFFICE AND BY THE GENERAL ACCOUNTING OFFICE IN CONNECTION WITH CONTRACT NO. YOUR COMPLAINT REGARDING THIS MATTER WAS DISCUSSED BY YOU AT A HEARING BEFORE THE SENATE SELECT COMMITTEE ON SMALL BUSINESS. YOUR LETTER FURTHER ALLEGES THAT MANY OF THE STATEMENTS MADE BY OUR REPRESENTATIVES AT THAT HEARING WERE MISLEADING AND INACCURATE. CONCERNING THE CONTENTS OF A LETTER WHICH WAS QUOTED IN THE OPINION OF THE UNITED STATES DISTRICT COURT. THIS INACCURACY WAS CORRECTED IN A MEMORANDUM TO THE STAFF OF THE SELECT COMMITTEES.

B-118666, JUL. 17, 1959

HASTINGS-RAYDIST, INC.:

REFERENCE IS MADE TO YOUR LETTER OF MARCH 28, 1959, WITH ENCLOSURES, RECOMMENDING AN INVESTIGATION OF ALL ASPECTS OF WHAT YOU CONSIDER TO HAVE BEEN UNREASONABLE AUDITING AND EXAMINATION PROCEDURES BY THE ADMINISTRATIVE OFFICE AND BY THE GENERAL ACCOUNTING OFFICE IN CONNECTION WITH CONTRACT NO. AF 08/606/-103.

AS YOU STATE IN YOUR LETTER, YOUR COMPLAINT REGARDING THIS MATTER WAS DISCUSSED BY YOU AT A HEARING BEFORE THE SENATE SELECT COMMITTEE ON SMALL BUSINESS, AT WHICH REPRESENTATIVES OF OUR OFFICE ALSO TESTIFIED. YOUR LETTER FURTHER ALLEGES THAT MANY OF THE STATEMENTS MADE BY OUR REPRESENTATIVES AT THAT HEARING WERE MISLEADING AND INACCURATE.

AS A RESULT OF YOUR LETTER THE TRANSCRIPT OF THE HEARING HAS BEEN SCRUTINIZED CAREFULLY IN AN ATTEMPT TO DISCOVER INACCURATE OR MISLEADING STATEMENT BY OUR REPRESENTATIVES. WE FOUND ONE RELATIVELY IMMATERIAL INACCURACY IN OUR TESTIMONY, CONCERNING THE CONTENTS OF A LETTER WHICH WAS QUOTED IN THE OPINION OF THE UNITED STATES DISTRICT COURT. THIS INACCURACY WAS CORRECTED IN A MEMORANDUM TO THE STAFF OF THE SELECT COMMITTEES. IT APPEARS TO BE YOUR POSITION, JUDGING FROM THE SUMMARY OF THE LITIGATION ENCLOSED WITH YOUR LETTER, THAT YOU WERE IMPROPERLY DENIED INTEREST ON THE $2,000 JUDGMENT YOU OBTAINED. WE MUST DISAGREE WITH YOUR POSITION ON THIS, AND WE WERE SUPPORTED IN OUR DISAGREEMENT BY THE DEPARTMENT OF JUSTICE. BY REASON OF YOUR AGREEMENT TO DISMISS THE APPEAL, THE QUESTION WAS NOT ADJUDICATED BY THE CIRCUIT COURT OF APPEALS. WE HAVE FOUND NO OTHER INACCURACIES OR MISLEADING STATEMENTS IN OUR TESTIMONY.

IN OUR AUDITS OF COMPANIES ENGAGED IN THE PERFORMANCE OF DEFENSE CONTRACT ACTIVITIES, WE MAKE EVERY EFFORT TO BE FAIR AND OBJECTIVE AND, AT THE SAME TIME, WE ATTEMPT TO AVOID INTERFERING WITH COMPANIES CARRYING OUT OPERATIONS FOR THE GOVERNMENT. ALTHOUGH SOMETIMES COMPANIES COMPLAIN OF INCONVENIENCES RESULTING FROM THE WORK OF THIS OFFICE, WE BELIEVE THAT THE RESULTS OF OUR RELATIVELY EXTENSIVE EXAMINATIONS OF OPERATIONS UNDER DEFENSE CONTRACTS HAVE DEMONSTRATED THAT THE REVIEW OF CONTRACTORS' OPERATIONS UNDER GOVERNMENT CONTRACTS IS ESSENTIAL TO ADEQUATELY PROTECT THE GOVERNMENT'S INTEREST.