B-163585, APR. 3, 1968

B-163585: Apr 3, 1968

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GILMORE: REFERENCE IS MADE TO YOUR LETTERS OF FEBRUARY 14. FURNISHING OF 50 RELEASED PRINTS IF OPTION IS EXERCISED 3. WAS THEREFORE PAID $18. BECAUSE THE CONTRACTOR WAS UNABLE TO COMPLETE PRODUCTION OF THE REMAINING SEGMENTS OF THE PROJECT YOUR DEPARTMENT PERMITTED UNITED TO COMPLETE THE UNFINISHED WORK PURSUANT TO AN AGREEMENT BETWEEN THE CORPORATIONS WHICH PROVIDED THAT VIDEO WOULD CONTINUE TO BILL THE GOVERNMENT FOR UNITED'S SERVICES. NOR ARE WE ABLE TO CONCLUDE THAT THE GOVERNMENT CONSENTED TO SUCH A TRANSFER BY PERMITTING UNITED TO COMPLETE THE UNFINISHED WORK. IN THESE CIRCUMSTANCES UNITED MUST BE VIEWED AS A SUBCONTRACTOR WHOSE RIGHTS TO PAYMENT ARE ENFORCEABLE ONLY AGAINST VIDEO.

B-163585, APR. 3, 1968

TO MR. ARTHUR J. GILMORE:

REFERENCE IS MADE TO YOUR LETTERS OF FEBRUARY 14, 1968, AND MARCH 19, 1968, WITH ENCLOSURES, IN WHICH YOU REQUEST OUR ASSISTANCE IN DETERMINING THE PROPRIETY OF PAYMENT TO UNITED PRESS INTERNATIONAL, INC. (HEREAFTER UNITED), IN THE AMOUNT OF $9,885 FOR WORK PERFORMED BY IT UNDER AGREEMENT WITH WASHINGTON VIDEO PRODUCTIONS, INC. (HEREAFTER VIDEO), FOR COMPLETION OF THE LATTER'S CONTRACT NO. NPS-WASO-11-63-1 NEG, DATED JUNE 28, 1963, FOR THE PRODUCTION OF A MOTION PICTURE. ARTICLE V OF THE CONTRACT STIPULATED FOR PARTIAL PAYMENTS BASED ON THE PROGRESS OF WORK AS FOLLOWS: 1. APPROVAL OF STORY TREATMENT $ 2,500 2. APPROVAL OF SHOOTING SCRIPT 3,750 3. APPROVAL OF DAILIES

6,250 4. APPROVAL OF FINE CUT 6,250 5. APPROVAL OF ANSWER PRINT 6,250 6. FURNISHING OF 50 RELEASED PRINTS IF

OPTION IS EXERCISED 3,635

$28,635 VIDEO COMPLETED THE FIRST FOUR ELEMENTS OF THE REQUIRED WORK BETWEEN THE DATE OF AWARD OF THE CONTRACT AND MARCH 18, 1965, AND WAS THEREFORE PAID $18,750 IN ACCORD WITH THE CONTRACT SCHEDULE.

BECAUSE THE CONTRACTOR WAS UNABLE TO COMPLETE PRODUCTION OF THE REMAINING SEGMENTS OF THE PROJECT YOUR DEPARTMENT PERMITTED UNITED TO COMPLETE THE UNFINISHED WORK PURSUANT TO AN AGREEMENT BETWEEN THE CORPORATIONS WHICH PROVIDED THAT VIDEO WOULD CONTINUE TO BILL THE GOVERNMENT FOR UNITED'S SERVICES, AND PAY THE LATTER FROM THE PAYMENTS RECEIVED. WE CANNOT CONSIDER THE REFERENCED AGREEMENT AS CONSTITUTING EITHER AN ASSIGNMENT OF VIDEO'S LEGAL LIABILITIES UNDER THE CONTRACT OR A RELEASE OF VIDEO'S RIGHTS AGAINST THE GOVERNMENT, NOR ARE WE ABLE TO CONCLUDE THAT THE GOVERNMENT CONSENTED TO SUCH A TRANSFER BY PERMITTING UNITED TO COMPLETE THE UNFINISHED WORK. IN THESE CIRCUMSTANCES UNITED MUST BE VIEWED AS A SUBCONTRACTOR WHOSE RIGHTS TO PAYMENT ARE ENFORCEABLE ONLY AGAINST VIDEO.

ACCORDINGLY, SINCE YOU HAVE ADVISED US THAT THE CONTRACTING CORPORATION HAS NOT BEEN LEGALLY DISSOLVED, PAYMENT OF THE REFERENCED SUM SHOULD BE MADE TO VIDEO.

THE ENCLOSURES FORWARDED WITH YOUR LETTERS OF FEBRUARY 14 AND MARCH 19 ARE RETURNED.