B-172129, NOV 22, 1971

B-172129: Nov 22, 1971

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WHILE AFGHAN IS LEGALLY LIABLE FOR THE DAMAGED DRAPERIES. 023 ASSESSED BY THE CONTRACTING OFFICER IS INCORRECT. AFTER A REVIEW OF THE PURCHASE PRICE ($925) AND DEPRECIATION OVER THE 18 MONTHS THEY WERE IN USE. IT IS THE POSITION OF ARMY JAG THAT THE CORRECT AMOUNT IS $555. WILL NOT OBJECT TO THE ACCEPTANCE OF $541.82. SECRETARY: REFERENCE IS MADE TO LETTER SAOASI&L)-PO DATED JUNE 25. THE DRAPERIES WERE RETURNED BY AFGHAN ON AUGUST 18. AFTER DISCOVERING THAT ALL OF THE DRAPERIES WERE TOO SHORT. THE DRAPERIES WERE RETURNED TO AFGHAN. ALTHOUGH AFGHAN WAS ABLE TO RETURN SOME OF THE DRAPERIES TO A SATISFACTORY CONDITION. IT WAS UNABLE TO DO SO WITH RESPECT TO THE DRAPERIES FOR QUARTERS 13.

B-172129, NOV 22, 1971

CONTRACTS - DEBT DUE U.S. - COMPROMISE OFFER DECISION CONCERNING OFFER OF $541.82 BY AFGHAN CARPET CLEANERS IN FULL SETTLEMENT OF $555 DEBT DUE U.S. INCIDENT TO SHRINKAGE OF DRAPERIES UNDER A CLEANING CONTRACT WITH THE ARMY PROCUREMENT DIVISION, HEADQUARTERS, CAMERON STATION, ALEXANDRIA, VA. WHILE AFGHAN IS LEGALLY LIABLE FOR THE DAMAGED DRAPERIES, THE AMOUNT OF $1,023 ASSESSED BY THE CONTRACTING OFFICER IS INCORRECT. AFTER A REVIEW OF THE PURCHASE PRICE ($925) AND DEPRECIATION OVER THE 18 MONTHS THEY WERE IN USE, IT IS THE POSITION OF ARMY JAG THAT THE CORRECT AMOUNT IS $555. UNDER THE CIRCUMSTANCES, THE COMP. GEN. WILL NOT OBJECT TO THE ACCEPTANCE OF $541.82, ALREADY ADMINISTRATIVELY WITHHELD UNDER THE CONTRACT AS FULL AND FINAL SETTLEMENT OF THE GOVERNMENT'S CLAIM.

TO MR. SECRETARY:

REFERENCE IS MADE TO LETTER SAOASI&L)-PO DATED JUNE 25, 1971, WITH ENCLOSURES, FROM ACTING ASSISTANT DEPUTY FOR PROCUREMENT, FURNISHING A REPORT WITH RESPECT TO THE APPEAL OF THE AFGHAN CARPET CLEANERS ON BEHALF OF AFGHAN DRAPERY CLEANERS AGAINST THE CONTRACTING OFFICER'S DECISION TO WITHHOLD THE PAYMENT OF AMOUNTS EARNED BY AFGHAN UNDER PURCHASE ORDERS NOS. DABG13-71-F-6586, DABG13-71-F-6592 AND DABG13-71-M 2404, IN THE TOTAL AMOUNT OF $541.82 AND, FURTHER TO ASSESS ADDITIONAL CHARGES IN THE TOTAL AMOUNT OF $481.18, PLUS INTEREST.

ON AUGUST 4, 1970, THE PROCUREMENT DIVISION, HEADQUARTERS CAMERON STATION, ALEXANDRIA, ISSUED PURCHASE ORDER DABG13-71-M-2404 TO THE AFGHAN DRAPERY CLEANERS, WASHINGTON, D.C., FOR CLEANING AND REHANGING DRAPERIES IN QUARTERS 1, 7 AND 13 AT FORT LESLEY J. MCNAIR, WASHINGTON, D.C. THE DRAPERIES WERE RETURNED BY AFGHAN ON AUGUST 18, 1970, AND AFTER DISCOVERING THAT ALL OF THE DRAPERIES WERE TOO SHORT, THE DRAPERIES WERE RETURNED TO AFGHAN. ALTHOUGH AFGHAN WAS ABLE TO RETURN SOME OF THE DRAPERIES TO A SATISFACTORY CONDITION, IT WAS UNABLE TO DO SO WITH RESPECT TO THE DRAPERIES FOR QUARTERS 13. AS A RESULT, THE CONTRACTING OFFICE PURCHASED NEW DRAPERIES FOR QUARTERS 13 FROM MILLER'S INTERIORS, INC., AT A TOTAL COST OF $1,023.

BY LETTER DATED DECEMBER 16, 1970, THE CONTRACTING OFFICER ADVISED AFGHAN THAT SHE HAD DETERMINED THAT SINCE THE DRAPERIES FOR QUARTERS 13 HAD SHRUNK DURING CLEANING AND SINCE IT WAS NECESSARY TO PURCHASE NEW DRAPERIES AT A COST OF $1,023, AFGHAN WAS LIABLE IN THAT AMOUNT. AFGHAN WAS ALSO ADVISED THAT AN AGGREGATE TOTAL PAYMENT OF $541.82 DUE IT UNDER PURCHASE ORDERS NOS. DABG13-71-F-6586, DABG13-71-M-2404, AND DABG13-71-F- 6592, IN THE INDIVIDUAL AMOUNTS OF $149.56, $348.20 AND $44.06, RESPECTIVELY, WAS BEING WITHHELD TO PARTIALLY REDUCE ITS INDEBTEDNESS OF $1,023 AND THAT AFGHAN SHOULD REMIT THE BALANCE OF $481.18.

AFTER AN EXCHANGE OF CORRESPONDENCE BETWEEN AFGHAN AND THE CONTRACTING OFFICER, ITS ATTORNEY IN A LETTER MARCH 1, 1971, TO OUR OFFICE, PROTESTED THE ACTION OF THE CONTRACTING OFFICER IN HOLDING AFGHAN LIABLE FOR THE COST OF THE REPLACEMENT DRAPERIES. BY LETTER DATED MARCH 16, 1971, TO YOU, WE FORWARDED A COPY OF THE ATTORNEY'S LETTER OF MARCH 1, 1971, WITH A REQUEST FOR A REPORT THEREON. IN HIS LETTER OF JUNE 25, 1971, IN WHICH HE RECOMMENDED REDUCTION OF AFGHAN'S INDEBTEDNESS, THE ACTING ASSISTANT DEPUTY FOR PROCUREMENT STATES THAT WHILE AFGHAN IS LEGALLY LIABLE FOR THE DAMAGES TO THE DRAPERIES, THE AMOUNT OF $1,023 ASSESSED AGAINST IT BY THE CONTRACTING OFFICER IS INCORRECT. THAT OFFICIAL ADVISED THAT THE DAMAGED DRAPERIES WERE INITIALLY PURCHASED IN FEBRUARY 1969 AT A COST OF $925 AND WERE USED FOR APPROXIMATELY 18 MONTHS; AND THAT WHILE ARMY REGULATION 210- 50 INDICATES THAT THE LIFE EXPECTANCY OF DRAPERIES IS SIX YEARS, A TRADE PUBLICATION, GREY GUIDE REPORTS, SETS THE LIFE EXPECTANCY FOR DRAPERIES AT FOUR YEARS WITH A DEPRECIATION RATE OF 70 PERCENT FOR THE FIRST TWO YEARS. THE ACTING ASSISTANT DEPUTY FOR PROCUREMENT HAS RECOMMENDED THAT AFGHAN BE ASSESSED ONLY THE AMOUNT OF $555 FOR THE DAMAGED DRAPERIES, THE AMOUNT RECOMMENDED BY THE OFFICE OF THE JUDGE ADVOCATE GENERAL. THE REPORT OF THE OFFICE OF THE JUDGE ADVOCATE GENERAL INDICATES THAT THE AMOUNT OF $555 WAS BASED ON A DEPRECIATION RATE OF 40 PERCENT FOR THE 18 MONTHS DURING WHICH THE DRAPERIES WERE USED BY FORT MCNAIR.

A COPY OF YOUR DEPARTMENT'S REPORT WAS FURNISHED TO AFGHAN'S ATTORNEY PURSUANT TO HIS REQUEST AND BY LETTER DATED SEPTEMBER 21, 1971, THE ATTORNEY ADVISED OUR OFFICE THAT WHILE AFGHAN IS NOT WILLING TO ADMIT THAT IT IS LIABLE FOR THE DAMAGED DRAPERIES, IT IS WILLING, IN ORDER TO SETTLE THE CONTROVERSY, TO FOREGO ANY CLAIM TO PAYMENT OF THE AMOUNT OF $541.82, WHICH IT HAD EARNED FOR SERVICES RENDERED UNDER THE CITED PURCHASE ORDERS AND WHICH HAS BEEN WITHHELD BY THE GOVERNMENT.

YOUR DEPARTMENT HAS RECOMMENDED THAT AFGHAN BE ASSESSED ONLY THE AMOUNT OF $555 FOR THE DAMAGE WHICH OCCURRED DURING THE CLEANING OF THE DRAPERIES. AFGHAN THROUGH ITS ATTORNEY HAS TENDERED AN OFFER IN COMPROMISE OF $541.32, THE TOTAL AMOUNT WITHHELD BY THE CONTRACTING OFFICE UNDER THE CITED PURCHASE ORDERS. IN VIEW OF THE SMALL DIFFERENCE BETWEEN THE TWO AMOUNTS, WE WOULD HAVE NO OBJECTION TO YOUR DEPARTMENT CONSIDERING THE AMOUNT OF $541.32, WHICH WAS WITHHELD BY THE CONTRACTING OFFICE, TO BE IN FULL AND FINAL SETTLEMENT OF THE GOVERNMENT'S CLAIM AGAINST AFGHAN UNDER PURCHASE ORDER NO. DABG13-71-M 2404.