B-166576, APR. 25, 1969

B-166576, APR. 25, 1969

TO MISS RYDQUIST:

REFERENCE IS MADE TO YOUR LETTER OF MARCH 20, 1969, WITH ENCLOSURES, REQUESTING OUR DECISION AS TO THE PROPRIETY OF SETTING OFF $1,797.55, DUE THE GOVERNMENT FOR DAMAGES ASSESSED UNDER CONTRACT NO. 14-11-0008 2807, AGAINST $1,823.75, DUE THE CONTRACTOR UNDER CONTRACT NO. 14-11 0001-3915. BOTH CONTRACTS WERE AWARDED BY THE BUREAU OF LAND MANAGEMENT.

IT IS REPORTED THAT ON SEPTEMBER 16, 1968, THE CONTRACTING OFFICER ISSUED A DECISION UNDER CONTRACT NO. 14-11-0008-2807, DECLARING THE CONTRACTOR IN DEFAULT. THE CONTRACTOR DID NOT APPEAL THIS DECISION. THE WORK WAS COMPLETED BY ANOTHER CONTRACTOR AND EXCESS COSTS AND LIQUIDATED DAMAGES IN THE AMOUNT OF $1,797.55, WERE ASSESSED AGAINST THE DEFAULTED CONTRACTOR, FARREL D. WILLIAMS. NONE OF THE ASSESSED DAMAGES HAS BEEN PAID.

WORK UNDER CONTRACT NO. 14-11-0001-3915, HAS BEEN COMPLETED AND THERE IS AN UNPAID BALANCE OF $1,823.75. THERE IS AN ASSIGNMENT DATED SEPTEMBER 29, 1967, OF THE MONIES DUE UNDER THIS CONTRACT TO THE CASSIA NATIONAL BANK, BURLEY, IDAHO. NOTICE OF THE ASSIGNMENT WAS RECEIVED ON OCTOBER 15, 1967. THE CONTRACT DOES NOT APPEAR TO CONTAIN A "NO SET OFF" PROVISION. THE INVITATION UNDER WHICH THIS CONTRACT WAS AWARDED NAMES FARREL D. WILLIAMS AS THE BIDDER AND IS SIGNED BY FARREL D. WILLIAMS, WHOSE TITLE IS LISTED AS "SUPER.' UNDER THE REPRESENTATIONS AND CERTIFICATIONS PROVISIONS OF THE INVITATION, THE BIDDER CHECKED JOINT VENTURE AS THE TYPE OF ORGANIZATION. PRIOR TO AWARD OF THE CONTRACT, THE CONTRACTING OFFICER REQUESTED EVIDENCE OF THE EXISTENCE OF A JOINT VENTURE. PURSUANT TO SUCH REQUEST, WILLIAMS SUBMITTED AN UNDATED DOCUMENT ENTITLED "JOINT VENTURE AGREEMENT.' THIS AGREEMENT IS SIGNED BY FARREL D. WILLIAMS AND 10 OTHER PERSONS AND PROVIDES THAT THE "JOINT VENTURERS COLLECTIVELY AGREE TO ASSOCIATE, UNDER THE NAME OF WILLIAMS CO., FOR THE PURPOSE OF CONSTRUCTING FENCES FOR PECUNIARY GAIN TO THE JOINT VENTURERS.' THIS AGREEMENT ALSO GIVES FARREL WILLIAMS AUTHORITY TO FIGURE AND SUBMIT BIDS.

BOTH YOU AND THE CONTRACTING OFFICER QUESTION THE PROPRIETY OF A SET-OFF BECAUSE THE DEFAULTED CONTRACT IS IN THE NAME OF FARREL D. WILLIAMS AS AN INDIVIDUAL, WHEREAS THE OTHER CONTRACT PURPORTS TO BE THAT OF A JOINT VENTURE OF WHICH FARREL D. WILLIAMS IS A MEMBER. IN THIS CONNECTION, THE CONTRACTING OFFICER CORRECTLY POINTS OUT THAT OUR OFFICE HAS HELD THAT THE EARNINGS UNDER A CONTRACT WITH A PARTNERSHIP OR JOINT VENTURE CANNOT BE SET OFF TO SATISFY AN OBLIGATION OF ONE MEMBER OF THE PARTNERSHIP OR JOINT VENTURE. SEE 39 COMP. GEN. 438. HOWEVER, THE CONTRACTING OFFICER QUESTIONS WHETHER THE COMPLETED CONTRACT WAS THAT OF THE JOINT VENTURE, PRIMARILY BECAUSE THE BID WAS NOT SUBMITTED IN THE NAME OF THE WILLIAMS CO., AS PROVIDED IN THE AGREEMENT. YOU POINT OUT THAT THE AGREEMENT WAS UNDATED AND DID NOT REFER TO A SPECIFIC CONTRACT.

WE BELIEVE IT IS IMMATERIAL WHETHER FARREL D. WILLIAMS OR THE JOINT VENTURE IS CONSIDERED THE CONTRACTOR UNDER CONTRACT NO. 14-11-0001 3915, IN VIEW OF THE FOLLOWING INFORMATION SUPPLIED BY THE CONTRACTING OFFICER: "* * * THE BIDS ON BOTH CONTRACTS NO. 14-11-0001-3915, AWARDED AT THE PORTLAND SERVICE CENTER, AND NO. 14-11-0008-2807, AWARDED AT THE DENVER SERVICE CENTER OF THE BLM, WERE SUBMITTED NOT IN THE NAME OF -WILLIAMS CO. -, BUT BOTH BIDS WERE SUBMITTED IN IDENTICAL FASHION IN THE NAME OF - FARREL D. WILLIAMS, RT. 1, BOX 155, MALAD, IDAHO,- -JOINT VENTURE,- AND SIGNED BY -FARREL D. WILLIAMS, SUPER-. THERE IS NO SIGNATURE OF ANY KIND IN EITHER CONTRACT WHICH WOULD OBLIGATE ANYONE OTHER THAN FARREL D. WILLIAMS IN PERFORMANCE OF THE CONTRACTOR'S OBLIGATIONS. "I, THEREFORE, FEEL THAT BOTH CONTRACTS, EVEN THOUGH WILLIAMS CHECKED -JOINT VENTURE-, SHOULD BE CONSIDERED AS CONTRACTS AWARDED TOFARREL D. WILLIAMS AS AN INDIVIDUAL, THAT FARREL D. WILLIAMS IS SOLELY LIABLE UNDER BOTH CONTRACTS AND THAT MR. WILLIAMS' INDEBTEDNESS TO THE GOVERNMENT BECAUSE OF HIS DEFAULT ON CONTRACT NO. 14-11-0008-2807 IN THE AMOUNT OF $1,797.55 CAN PROPERLY BE SATISFIED BY SET-OFF FROM THE REMAINING UNPAID BALANCE ON CONTRACT NO. 14-11 0001-3915.'

IT APPEARS FROM THIS LANGUAGE THAT THE BIDS UNDER WHICH BOTH CONTRACTS WERE AWARDED WERE COMPLETED IN THE SAME MANNER. THEREFORE, WHETHER THEY WERE THE BIDS OF WILLIAMS INDIVIDUALLY OR OF THE JOINT VENTURE, THE BIDDERS WERE IDENTICAL AND THE CONTRACTOR ON BOTH CONTRACTS IS THE SAME. HOWEVER, THE GOVERNMENT MAY NOT SET OFF RIGHTS ACQUIRED UNDER INDEPENDENT TRANSACTIONS SUBSEQUENT TO THE DATE OF RECEIPT OF NOTICE OF A VALID ASSIGNMENT. 46 COMP. GEN. 441, 546. SINCE THE GOVERNMENT'S RIGHTS UNDER THE DEFAULTED CONTRACT MATURED SUBSEQUENT TO RECEIPT OF NOTICE OF THE ASSIGNMENT UNDER THE OTHER CONTRACT, SET OFF MAY NOT PROPERLY BE MADE.