B-147979, AUG. 1, 1962

B-147979: Aug 1, 1962

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ESQUIRE: FURTHER REFERENCE IS MADE TO YOUR LETTER DATED DECEMBER 16. IT WAS STATED IN YOUR LETTER. THAT DUE TO THE DEBTOR'S FINANCIAL CONDITION HE IS UNABLE TO PAY THE AMOUNT REPORTED BY THE DEPARTMENT OF THE ARMY TO BE DUE IN THIS CASE AND THAT HE ALSO FEELS THAT HE IS NOT LIABLE FOR THE REPORTED EXCESS COSTS. IT WAS STATED THAT IF THE OFFER OF SETTLEMENT CONTAINED IN YOUR LETTER IS NOT ACCEPTED THEN THE GOVERNMENT MAY TAKE SUCH FURTHER ACTION IN THE MATTER AS MAY BE DEEMED ADVISABLE. OUR CLAIMS DIVISION ADVISED YOU THAT THE GENERAL ACCOUNTING OFFICE IS WITHOUT AUTHORITY TO ACCEPT OFFERS IN COMPROMISE AND THAT THE MATTER OF THE OFFER WOULD BE REFERRED TO THE DEPARTMENT OF JUSTICE FOR CONSIDERATION.

B-147979, AUG. 1, 1962

TO OSBORN G. IDOM, ESQUIRE:

FURTHER REFERENCE IS MADE TO YOUR LETTER DATED DECEMBER 16, 1961, TO THE ACTING DIRECTOR OF CONTRACT FINANCING, DEPARTMENT OF THE ARMY, SUBMITTING ON BEHALF OF ROBERT F. BARNES AN OFFER TO PAY THE SUM OF $50 IN FULL SETTLEMENT OF HIS INDEBTEDNESS TO THE UNITED STATES IN THE AMOUNT OF $978.81, REPRESENTING EXCESS COSTS INCURRED BY THE GOVERNMENT BY REASON OF THE DEBTOR'S DEFAULT UNDER CONTRACT NO. DA-23 065-ENG-10558, DATED MAY 2, 1961, WITH THE CORPS OF ENGINEERS, ST. LOUIS, MISSOURI.

IT WAS STATED IN YOUR LETTER, AMONG OTHER THINGS, THAT DUE TO THE DEBTOR'S FINANCIAL CONDITION HE IS UNABLE TO PAY THE AMOUNT REPORTED BY THE DEPARTMENT OF THE ARMY TO BE DUE IN THIS CASE AND THAT HE ALSO FEELS THAT HE IS NOT LIABLE FOR THE REPORTED EXCESS COSTS. FINALLY, IT WAS STATED THAT IF THE OFFER OF SETTLEMENT CONTAINED IN YOUR LETTER IS NOT ACCEPTED THEN THE GOVERNMENT MAY TAKE SUCH FURTHER ACTION IN THE MATTER AS MAY BE DEEMED ADVISABLE.

BY LETTER DATED JANUARY 12, 1962, OUR CLAIMS DIVISION ADVISED YOU THAT THE GENERAL ACCOUNTING OFFICE IS WITHOUT AUTHORITY TO ACCEPT OFFERS IN COMPROMISE AND THAT THE MATTER OF THE OFFER WOULD BE REFERRED TO THE DEPARTMENT OF JUSTICE FOR CONSIDERATION. UNDER DATE OF JANUARY 24, 1962, WE ADVISED THE DEPARTMENT OF JUSTICE OF THE OFFER OF SETTLEMENT AND WE FURNISHED THAT DEPARTMENT DETAILED INFORMATION AS TO THE FACTS AND CIRCUMSTANCES ON WHICH THE GOVERNMENT'S CLAIM IS BASED. WE ARE NOW IN RECEIPT OF A LETTER DATED JULY 9, 1962, FROM THE DEPARTMENT OF JUSTICE, ADVISING THAT UPON REVIEW OF THE FACTS IN THIS CASE THE OFFER TO PAY $50 IN COMPROMISE SETTLEMENT HAS BEEN REJECTED.

WHILE IT WAS INDICATED IN YOUR LETTER OF DECEMBER 16, 1961, THAT THE OFFER MADE THEREIN CONSTITUTED A FINAL OFFER OF SETTLEMENT, WE FEEL THAT IF THERE IS CLEARLY SET FORTH HEREIN THE BASIS FOR THE CLAIM BEING ASSERTED AGAINST MR. BARNES, YOU MAY AS HIS ATTORNEY WISH TO ADVISE HIM AS TO HIS LIABILITY FOR THE AMOUNT DUE. IN THIS CONNECTION, THERE HAS BEEN NOTED YOUR STATEMENT THAT MR. BARNES FEELS THAT HE IS NOT LIABLE IN THIS CASE BECAUSE OF THE FACT THAT ANOTHER COMPANY WAS TO PRODUCE THE LUMBER IN QUESTION. IT MAY BE POINTED OUT THAT UNDER THE TERMS OF THE CONTRACT INVOLVED MR. BARNES WAS OBLIGATED TO FURNISH THE LUMBER TO THE CORPS OF ENGINEERS AT THE STATED CONTRACT PRICE AND THAT THE SOURCE OF SUPPLY WAS NOT A MATTER OF CONCERN TO THE GOVERNMENT. IN OTHER WORDS, THE FAILURE OF A SUBCONTRACTOR TO DELIVER THE LUMBER IN QUESTION COULD NOT SERVE TO RELIEVE MR. BARNES OF HIS CONTRACTUAL OBLIGATION.

UNDER THE TERMS OF THE INDICATED CONTRACT MR. BARNES AGREED TO FURNISH CERTAIN QUANTITIES OF LUMBER FOR A TOTAL CONTRACT PRICE OF $2,747.50, LESS A DISCOUNT OF TWO PERCENT FOR PROMPT PAYMENT, DELIVERY OF FITY PERCENT OR MORE OF ALL ITEMS TO ARRIVE AT THE SPECIFIED DESTINATION ON OR BEFORE MAY 29, 1961, AND THE BALANCE OF THE ITEMS TO ARRIVE AT DESTINATION NOT LATER THAN JUNE 12, 1961. THE DELIVERY DATE WAS SUBSEQUENTLY EXTENDED TO JUNE 29, 1961. BY A TELEGRAM DATED JUNE 29, 1961--- CONFIRMED BY LETTER DATED JULY 3, 1961--- THE CONTRACTING OFFICER ADVISED THE CONTRACTOR THAT BY REASON OF FAILURE TO MAKE DELIVERY OF THE LUMBER WITHIN THE TIME SPECIFIED HE WAS CONSIDERED TO BE IN DEFAULT AND THAT HIS RIGHT TO PROCEED WITH THE PERFORMANCE OF THE CONTRACT WAS TERMINATED AS OF THE CLOSE OF BUSINESS ON JUNE 29, 1961.

PARAGRAPH 11 OF THE CONTRACT PROVIDED THAT IN THE EVENT THE GOVERNMENT TERMINATED THE SAME FOR DEFAULT, THE GOVERNMENT HAD THE RIGHT TO PROCURE, UPON SUCH TERMS AND IN SUCH MANNER AS THE CONTRACTING OFFICER MIGHT DEEM APPROPRIATE, SUPPLIES SIMILAR TO THOSE SO TERMINATED, AND THAT THE CONTRACTOR SHOULD BE LIABLE TO THE GOVERNMENT FOR ANY EXCESS COSTS FOR SUCH SIMILAR SUPPLIES.

UNDER DATE OF JULY 28, 1961, A REPLACING CONTRACT WAS AWARDED TO MR. GEORGE M. ROZZELL, P.O. BOX 247, WAKE VILLAGE STATION, TEXARKANA, TEXAS, FOR DELIVERY OF A LIKE QUANTITY OF LUMBER AT THE BID PRICE OF $3,746.29, LESS A DISCOUNT OF TWO PERCENT FOR PAYMENT WITHIN TWENTY DAYS.

SINCE THE GOVERNMENT'S CLAIM AGAINST MR. BARNES IS A VALID ONE, HIS LEGAL LIABILITY BEING ESTABLISHED BY THE RECORD, AND SINCE IT APPEARS FROM INFORMATION ON FILE IN OUR OFFICE THAT HE IS FINANCIALLY ABLE TO PAY THE AMOUNT CLAIMED, IT IS REQUESTED THAT OUR OFFICE BE ADVISED WITHIN TWENTY DAYS FROM THE DATE OF THIS LETTER AS TO THE DEBTOR'S INTENTIONS RESPECTING PAYMENT. IF NO RESPONSE IS RECEIVED TO THIS LETTER WITHIN THE INDICATED PERIOD, WE WILL HAVE NO ALTERNATIVE BUT TO REFER THE CLAIM TO THE DEPARTMENT OF JUSTICE FOR APPROPRIATE ACTION TO ENFORCE COLLECTION. THERE WILL, OF COURSE, BE CONSIDERABLE EXPENSE ON THE PART OF THE DEBTOR IF THE MATTER IS PROCEEDED WITH TO JUDGMENT.