B-161283, MAR 16, 1976

B-161283: Mar 16, 1976

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DEBTOR'S REQUEST THAT GAO SUSPEND OR TERMINATE COLLECTION ACTION SINCE CONTRACT ADMINISTRATIVE PROCESSES HAVE NOT BEEN IMPLEMENTED IS DENIED SINCE FINAL RESOLUTION OF CONTRACT DISPUTE IS NOT PRECLUDED BY CONTRACTING OFFICER'S FAILURE TO ISSUE "FINAL DECISION.". COLLECTION ACTION FOR ESTIMATED DEBTS OWING THE GOVERNMENT IS AUTHORIZED NOTWITHSTANDING ABSENCE OF FINAL RESOLUTION OF CONTRACT DISPUTE UNDERLYING DEBT. 2. ALLEGATION THAT DEMAND FOR DEFINITE AMOUNT OWED TO GOVERNMENT WAS INITIATED BY GAO RATHER THAN CONTRACTING AGENCY IN VIOLATION OF 4 C.F.R. 102. COUNSEL ARGUES THAT IT IS PREMATURE TO DECLARE BRISCOE A DEBTOR SINCE THE CONTRACTING OFFICER HAS NOT RENDERED A FINAL DECISION WHICH BRISCOE WOULD BE ENTITLED TO APPEAL TO THE BOARD OF CONTRACT APPEALS FOR FINAL RESOLUTION.

B-161283, MAR 16, 1976

1. DEBTOR'S REQUEST THAT GAO SUSPEND OR TERMINATE COLLECTION ACTION SINCE CONTRACT ADMINISTRATIVE PROCESSES HAVE NOT BEEN IMPLEMENTED IS DENIED SINCE FINAL RESOLUTION OF CONTRACT DISPUTE IS NOT PRECLUDED BY CONTRACTING OFFICER'S FAILURE TO ISSUE "FINAL DECISION." COLLECTION ACTION FOR ESTIMATED DEBTS OWING THE GOVERNMENT IS AUTHORIZED NOTWITHSTANDING ABSENCE OF FINAL RESOLUTION OF CONTRACT DISPUTE UNDERLYING DEBT. 2. ALLEGATION THAT DEMAND FOR DEFINITE AMOUNT OWED TO GOVERNMENT WAS INITIATED BY GAO RATHER THAN CONTRACTING AGENCY IN VIOLATION OF 4 C.F.R. 102, STANDARDS FOR ADMINISTRATIVE COLLECTION OF CLAIMS, PROVIDES NO BASIS FOR TERMINATING OR SUSPENDING DEBT COLLECTION ACTION SINCE SUCH STANDARDS DO NOT GIVE DEBTOR SUBSTANTIVE RIGHTS.

FRANK BRISCOE COMPANY, INC.:

THE GENERAL SERVICES ADMINISTRATION HAS REFERRED HERE FOR COLLECTION A CLAIM AGAINST FRANK BRISCOE COMPANY, INC., ARISING UNDER THE WARRANTY PROVISIONS OF GSA CONTRACT NO. GS-08B-2848. COUNSEL FOR BRISCOE HAS REQUESTED THIS OFFICE TO REFRAIN FROM PLACING THE FIRM'S NAME ON THE DEBTOR'S LIST (ARMY HOLDUP LIST), A MECHANISM FOR COLLECTION OF DEBTS BY SET-OFF.

ESSENTIALLY, COUNSEL ARGUES THAT IT IS PREMATURE TO DECLARE BRISCOE A DEBTOR SINCE THE CONTRACTING OFFICER HAS NOT RENDERED A FINAL DECISION WHICH BRISCOE WOULD BE ENTITLED TO APPEAL TO THE BOARD OF CONTRACT APPEALS FOR FINAL RESOLUTION. IN ADDITION, BRISCOE ARGUES THAT GSA HAS NOT FOLLOWED THE PROVISIONS OF TITLE 4, CODE OF FEDERAL REGULATIONS, PART 102, STANDARDS FOR THE ADMINISTRATIVE COLLECTION OF CLAIMS, SINCE GSA HAS NOT MADE A DEMAND FOR A SPECIFIED AMOUNT. IN THIS CONNECTION BRISCOE STATES THAT THE DEMAND FOR PAYMENT OF $122,391.49, HAS BEEN INITIATED AND ASSERTED BY THIS OFFICE RATHER THAN BY GSA. FOR ALL OF THE ABOVE REASONS BRISCOE FEELS IT HAS BEEN DENIED ADMINISTRATIVE PROCESSES TO WHICH IT IS ENTITLED AND HAS REQUESTED THAT THIS MATTER BE REFERRED BACK TO GSA SO THAT BRISCOE MAY HAVE THE OPPORTUNITY TO PURSUE ITS CONTRACTUAL RIGHTS.

BRISCOE'S REQUEST FOR A FINAL DECISION BY THE CONTRACTING OFFICER INVOLVES A MATTER OF CONTRACT ADMINISTRATION WHICH, IN THIS CASE, IS THE RESPONSIBILITY OF GSA. WE NOTE, HOWEVER, THAT GENERALLY A CONTRACTING OFFICER'S FAILURE TO ISSUE A "FINAL DECISION" DOES NOT PRECLUDE APPEAL TO THE BOARD OF CONTRACT APPEALS. E.G. LEADER MFG. CO., ASBCA 4416, 58-2 BCA PARA. 1877. OUR INVOLVEMENT HERE IS BASED UPON THE AUTHORITY IN 31 U.S.C. 71 (1970) TO SETTLE AND ADJUST ALL CLAIMS BY AND AGAINST THE GOVERNMENT, PURSUANT TO WHICH WE MUST TAKE ANY NECESSARY ACTION TO EFFECT A SET-OFF FOR EITHER LIQUIDATED OR ESTIMATED DEBTS OWING THE GOVERNMENT. B-178368, SEPTEMBER 24, 1973 AND B-176791, SEPTEMBER 8, 1972. THE RIGHT OF SET-OFF IS INHERENT IN THE UNITED STATES AND EXTENDS TO DEBTS OWED AS A RESULT OF SEPARATE AND INDEPENDENT TRANSACTIONS. UNITED STATES V. MUNSEY TRUST CO., 332 U.S. 234 (1947). MOREOVER, THERE IS NO REQUIREMENT THAT THE GOVERNMENT REFRAIN FROM COLLECTION ACTION PENDING RESOLUTION BY A BOARD CONTRACT APPEALS OF THE UNDERLYING CONTRACT DISPUTE. PROJECT MAP, INC. V. UNITED STATES, 486 F. 2D 1375 (CT.CL. 1973).

REGARDING BRISCOE'S RIGHTS UNDER 4 C.F.R. 102 NEITHER THE STANDARDS PROMULGATED THEREIN NOR THE UNDERLYING LEGISLATION, 31 U.S.C. 952 (1970), GIVES RISE TO ANY SUBSTANTIVE RIGHTS IN BRISCOE. IN THIS CONNECTION, 4 C.F.R. SEC. 101.2 STATES THAT:

"THE STANDARDS SET FORTH IN THIS CHAPTER SHALL APPLY TO THE ADMINISTRATIVE HANDLING OF CIVIL CLAIMS OF THE FEDERAL GOVERNMENT FOR MONEY OR PROPERTY BUT THE FAILURE OF AN AGENCY TO COMPLY WITH ANY PROVISION OF THIS CHAPTER SHALL NOT BE AVAILABLE AS A DEFENSE TO ANY DEBTOR."

FINALLY, WE AGREE THAT BRISCOE IS OWED AN EXPLANATION OF GSA'S DETERMINATION OF THE DOLLAR AMOUNT OF THIS DEBT. BY LETTER OF TODAY WE ARE REFERRING BRISCOE'S REQUEST FOR SUCH INFORMATION TO GSA WITH A REQUEST THAT GSA CONSIDER THE ADVISABILITY OF ISSUING A FINAL DECISION BY THE CONTRACTING OFFICER. MEANWHILE, THE GOVERNMENT MAY PROTECT ITS RIGHTS AS A CREDITOR BY ATTEMPTING TO COLLECT THIS DEBT THROUGH SET OFF.

ACCORDINGLY, WE WILL NOT TERMINATE OR SUSPEND COLLECTION ACTION IN THIS CASE.