B-132129, APR. 23, 1958

B-132129, APR. 23, 1958

TO THE SECRETARY OF THE ARMY:

REFERENCE IS MADE TO YOUR LETTER OF JANUARY 29, 1958, AS SUPPLEMENTED APRIL 9, 1958, REFERRING TO OUR LETTER TO YOU OF SEPTEMBER 16, 1957, AND REQUESTING FURTHER CONSIDERATION OF THE GOVERNMENT'S RIGHT TO ENFORCE SIX CLAIMS AGAINST CERTAIN CLOTHING CONTRACTORS--- REPRESENTATIVE OF SIMILAR CLAIMS DEVELOPED BY A REVIEW CONDUCTED BY THE CONTRACT REVIEW AGENCY OF YOUR DEPARTMENT PURSUANT TO THE RECOMMENDATIONS OF THE PERMANENT SUBCOMMITTEE ON INVESTIGATIONS OF THE SENATE COMMITTEE ON GOVERNMENT OPERATIONS, SENATE REPORT NO. 1380, 84TH CONGRESS--- FOR THE RECOVERY OF ,SAVINGS" WHICH HAVE NOT BEEN DULY CREDITED TO THE GOVERNMENT UNDER THE TERMS OF THE CONTRACTS INVOLVED.

AS INDICATED IN YOUR LETTER OF JANUARY 29, 1958, VARIOUS QUESTIONS RELATING TO THE PROCESSING OF THESE CLAIMS WERE CONSIDERED AT A CONFERENCE BETWEEN REPRESENTATIVES OF OUR RESPECTIVE STAFFS HELD ON OCTOBER 1, 1957. SUBSEQUENT TO THE RECEIPT OF YOUR LETTER, A FURTHER CONFERENCE WAS HELD ON APRIL 8, 1958, AND CERTAIN ASPECTS OF THE CLAIMS SUBMITTED WERE AGAIN REVIEWED.

WITH RESPECT TO YOUR REFERENCE TO THAT PORTION OF OUR LETTER OF SEPTEMBER 16, 1957, DEALING WITH THE TRANSMITTAL OF CASES TO THE ATTORNEY GENERAL, IN OUR OPINION SUCH ACTION SHOULD BE TAKEN IN ALL CASES WHERE THERE IS SUBSTANTIAL EVIDENCE AND INFORMATION OF IRREGULAR PRACTICES, DISHONESTY, OR DECEIT PERTAINING TO THE PARTICULAR CONTRACTS AND TRANSACTIONS INVOLVED WHICH WOULD EXCLUDE A REASONABLE PRESUMPTION OF GOOD FAITH DEALING. SEE, IN THIS CONNECTION, 37 C.J.S., FRAUD, SECS. 94, 114, AND 115. CF. HUME V. UNITED STATES, DECEMBER 16, 1889, 132 U.S. 406; HAMMERSCHMIDT V. UNITED STATES, MAY 26, 1924, 265 U.S. 182, 188; HILLGROVE V. WRIGHT, C.C.A. 6TH CIR., JANUARY 29, 1945, 146 F.2D 621; UNITED STATES V. LEYDE AND LEYDE, D.C. MD., MARCH 6, 1950, 89 F.SUPP. 256; AND ANDREW T. LITTLE V. UNITED STATES, C.CLS. NO. 565 53, DECIDED JUNE 5, 1957.

RELATIVE TO THE SIX CASES SUBMITTED WITH YOUR LETTER OF JANUARY 29, 1958, IN ACCORDANCE WITH THE ARRANGEMENTS MADE DURING THE CONFERENCE ON APRIL 8, 1958, THE FILES PERTAINING TO CASES I AND IV ARE RETURNED HEREWITH, IN VIEW OF THE ADVICE FURNISHED TO THE EFFECT THAT THE AMOUNT CLAIMED UNDER CASE I HAD BEEN COLLECTED AND THAT CASE IV HAD BEEN REFERRED BY YOU TO THE DEPARTMENT OF JUSTICE AS A MATTER INVOLVING POSSIBLE FRAUD. THE REMAINING CASES WILL BE RETAINED FOR DIRECT SETTLEMENT BY OUR OFFICE, WITH THE UNDERSTANDING THAT YOUR DEPARTMENT WILL COOPERATE IN PERFECTING THE FILES SUBMITTED BY THE FURNISHING OF SUCH ADDITIONAL INFORMATION AND DATA AS MAY BE REQUIRED.