B-208612(1),L/M, APR 14, 1983, OFFICE OF GENERAL COUNSEL

B-208612(1),L/M: Apr 14, 1983

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AS WILL BE EXPLAINED BELOW. THE CLAIM IS A DEMAND BY AERDCO FOR RECEIPT OF PAYMENT AS AWARDED IN GSBCA DECISION NO. 3776-R. AERDCO IS IN BANKRUPTCY AND THE CLAIM IS BEING PURSUED BY MR. GSBCA FURTHER CONCLUDED THAT THE RECORD SUPPORTED AERDCO'S CLAIM AS TO THE NUMBER OF CYLINDERS ON HAND WHEN THE CONTRACT WAS TERMINATED AND THAT AERDCO WAS ENTITLED TO $6. YOUR LETTER ACKNOWLEDGES THAT THE AIR FORCE WAS FURNISHED GOODS AND SERVICES PURSUANT TO THE CONTRACT AND THAT IT IS RESPONSIBLE FOR SATISFYING A PORTION OF THE AWARD. IT IS IMPORTANT TO NOTE THAT THE AIR FORCE DOES NOT CONTEST THE VALIDITY OF GSBCA'S AWARD TO AERDCO EVEN THOUGH YOU BELIEVE IT WAS MADE WITHOUT THE KIND OF SUPPORTING DOCUMENTATION NORMALLY REQUIRED.

B-208612(1),L/M, APR 14, 1983, OFFICE OF GENERAL COUNSEL

SUBJECT: AERDCO, INC.'S CLAIM FOR PAYMENT OF AN AWARD BY THE GENERAL SERVICES ADMINISTRATION BOARD OF CONTRACT APPEALS (GSBCA)

COLONEL JOSEPH F. GREENFIELD, USAF, STAFF JUDGE ADVOCATE:

ATTENTION: JOE D. BROWN, ESQ., LEGAL COUNSEL

IN YOUR LETTER OF FEBRUARY 3, 1983, YOU PROPOSED THAT THE AIR FORCE SATISFY ITS LIABILITY UNDER THE SUBJECT CLAIM BY PAYING THE CLAIMANT THE SUM OF $3,423.66, APPARENTLY THROUGH A CONTRACT MODIFICATION. IN THIS REGARD, YOU REQUESTED OUR APPROVAL OF THE PROPOSAL BASED ON THE AVAILABLE SUPPORTING DOCUMENTATION. AS WILL BE EXPLAINED BELOW, WE APPROVE THE PROPOSAL.

AS YOU KNOW, THE GENERAL SERVICES ADMINISTRATION (GSA) REFERRED THE CLAIM, ALONG WITH AN AGENCY REPORT, TO OUR CLAIMS GROUP FOR SETTLEMENT. THE CLAIM IS A DEMAND BY AERDCO FOR RECEIPT OF PAYMENT AS AWARDED IN GSBCA DECISION NO. 3776-R, DATED SEPTEMBER 19, 1978. AERDCO IS IN BANKRUPTCY AND THE CLAIM IS BEING PURSUED BY MR. SAM JONAS, THE TRUSTEE IN BANKRUPTCY.

GSBCA MADE ITS AWARD TO AERDCO ON CLAIMS ARISING OUT OF PURCHASES FROM THE FEDERAL SUPPLY SCHEDULE UNDER GSA CONTRACT NO. GS-07S-03363. GSBCA CONCLUDED THAT AERDCO HAD PRESENTED SATISFACTORY PROOF THAT IT PROPERLY BILLED ORDERING AGENCIES, IN THE SUM OF $29,104.65, FOR HELIUM FILLED CYLINDERS SERVICED AND SHIPPED UNDER THE CONTRACT. GSBCA FURTHER CONCLUDED THAT THE RECORD SUPPORTED AERDCO'S CLAIM AS TO THE NUMBER OF CYLINDERS ON HAND WHEN THE CONTRACT WAS TERMINATED AND THAT AERDCO WAS ENTITLED TO $6,016.85 FOR TRANSPORTATION COSTS AS WELL AS $6,872.92 FOR SERVICE COSTS NOT PREVIOUSLY BILLED. ALSO, GSBCA EXCUSED AERDCO'S FAILURE TO PROVIDE MORE SUBSTANTIAL EVIDENCE IN LIGHT OF THE PASSAGE OF TIME AND DISPERSAL OF COMPANY RECORDS FOLLOWING INITIATION OF BANKRUPTCY PROCEEDINGS.

YOUR LETTER ACKNOWLEDGES THAT THE AIR FORCE WAS FURNISHED GOODS AND SERVICES PURSUANT TO THE CONTRACT AND THAT IT IS RESPONSIBLE FOR SATISFYING A PORTION OF THE AWARD. IT IS IMPORTANT TO NOTE THAT THE AIR FORCE DOES NOT CONTEST THE VALIDITY OF GSBCA'S AWARD TO AERDCO EVEN THOUGH YOU BELIEVE IT WAS MADE WITHOUT THE KIND OF SUPPORTING DOCUMENTATION NORMALLY REQUIRED.

NEVERTHELESS, OUR APPROVAL HAS EVIDENTLY BECOME NECESSARY BECAUSE THE AIR FORCE FINANCE OFFICE IS STILL RELUCTANT TO ACCEPT RESPONSIBILITY FOR PAYMENT OF THE CLAIM WITHOUT ADDITIONAL SUPPORTING DOCUMENTATION. YOU EXPRESSED THE FOLLOWING COMMENTS REGARDING THE AVAILABLE DOCUMENTATION:

"THE FIRST REQUEST FOR PAYMENT WAS RECEIVED IN 1978 REFERENCING ORDER F41608-72-F-5943. ALTHOUGH KELLY AFB HAD NO RECORD OF ORDER '5943', RECORDS WERE AVAILABLE ON ORDER F41608-72-F-5934. CLARIFICATION ON THE IDENTIFICATION OF THE ORDER WAS REQUESTED IN DEC 78, BUT TO DATE NO RESPONSE HAS BEEN RECEIVED. THE INVESTIGATION, MR. JOHN PASLOW, THE AIR FORCE EMPLOYEE FROM MCGUIRE AFB, NEW JERSEY, WHO MADE ARRANGEMENTS AND WITNESSED THE REPAIR AND REMOVAL OF THE CYLINDERS FOR THE AIR FORCE POOL WAS CONTACTED ON THE TELEPHONE IN NEW HOPE, PENNSYLVANIA, 215-598-3075, AND CONFIRMED THAT REPAIRS AND SERVICES TO THE CYLINDERS HAD BEEN MADE PRIOR TO SHIPPING. DUE TO TEN YEARS HAVING PASSED SINCE PERFORMANCE, RECORDS ARE NOT AVAILABLE, AND THE ANALYSIS OF THE BOARD'S DECISION DOES NOT LEND ITSELF TO PRECISE SUBSTANTIATION. THE BOARD ACCEPTED THE UNREBUTTED TESTIMONY OF MR. MCPHERSON, PRESIDENT OF AERDCO, INC. AND A VOUCHER PLACED INTO EVIDENCE AS SUBSTANTIATION OF AN UNDERPAYMENT FOR CYLINDERS SHIPPED WHERE THERE WAS DISPARITY IN THE ESTIMATED NUMBER ON THE ORIGINAL ORDER AND THE ACTUAL NUMBER OF CYLINDERS FILLED AND SERVICED BY AERDCO (PAGE 3, CLAIM 2, SECOND PARAGRAPH). UNDER CLAIM 3 WHICH INCLUDED SERVICES, THE BOARD STATED, 'WE ALSO CONCLUDE, IN LIGHT OF OUR FINDINGS, THAT THE INSTANT CONTRACT WAS IN EFFECT CONSTRUCTIVELY AMENDED TO INCLUDE WORK ON AIR FORCE POOL CYLINDERS ACCOMPLISHED DURING THE TERM OF THE CONTRACT.'"

THE AIR FORCE IS APPARENTLY OF THE OPINION THAT THE COSTS OF FURTHER CONTESTING THE SUBJECT CLAIM ARE LIKELY TO OUTWEIGH ANY BENEFITS TO THE GOVERNMENT. FROM THIS YOU CONCLUDE THAT IT WOULD APPEAR TO BE IN THE BEST INTEREST OF THE GOVERNMENT TO SETTLE THE CLAIM.

WE HAVE NO OBJECTION TO AIR FORCE'S PROPOSAL TO FINALLY RESOLVE THIS DISPUTE, WHICH BEGAN MORE THAN 10 YEARS AGO. WE AGREE THAT, WHILE THE KIND OF SUPPORTING DOCUMENTATION NORMALLY REQUIRED HAS NOT BEEN FURNISHED, THERE IS NO LEGAL BASIS FOR REFUSING TO PAY AERDCO AS PROVIDED IN THE BOARD'S AWARD, SINCE THE AIR FORCE HAS DETERMINED THAT THE DOCUMENTATION WHICH MIGHT HAVE FORMED SUCH BASIS NO LONGER EXISTS.

IN VIEW OF THE UNITED STATES BANKRUPTCY COURT'S INTENDED DECISION TO DISALLOW THE GOVERNMENT'S CLAIMS AGAINST AERDCO UNLESS THIS DISPUTE IS RESOLVED BY APRIL 19, 1983, WE URGE YOU TO ARRANGE IMMEDIATE PAYMENT, IF OTHERWISE APPROPRIATE. WE RECOMMEND THAT YOU HAVE THE CHECK PREPARED AS INDICATED BELOW:

AERDCO, INC.

C/O STEPHEN S. TROTT UNITED STATES ATTORNEY 312 NORTH SPRING STREET LOS ANGELES, CALIFORNIA 90012

ATTN: HUGH W. BLANCHARD, AUSA IF YOU ANTICIPATE THAT THE CHECK WILL NOT BE RECEIVED BY MR. BLANCHARD BEFORE THE CLOSE OF BUSINESS ON APRIL 18, PLEASE CONTACT HIM ON FTS 798-2470.

WE ARE ADVISING THE JUSTICE DEPARTMENT AND GSA OF THIS ACTION.