B-125483, JUL. 10, 1958

B-125483, JUL. 10, 1958

TO MR. J. SLATER DAVIDSON, JR., VETERANS HOSPITAL PROJECT:

REFERENCE IS MADE TO YOUR LETTER OF JUNE 13, 1958, RELATIVE TO THE COLLECTION OF THE INDEBTEDNESS TO THE UNITED STATES OF TOMPKINS CURLETT- WUNDERLICH, ARISING OUT OF THEIR PERFORMANCE AS A JOINT VENTURE OF CONTRACT V1001C-152. PAYMENT OF THE INDEBTEDNESS WAS REQUESTED BY OUR CLAIMS DIVISION IN ITS LETTER OF NOVEMBER 15, 1956, AND WAS DECLINED IN YOUR LETTER OF DECEMBER 6, 1957.

IT IS STATED IN YOUR LETTER THAT YOU HAVE BEEN ADVISED BY THE WUNDERLICH CO. THAT THE CORPS OF ENGINEERS AT SAN FRANCISCO HAS ADVISED THAT OUR OFFICE HAD DIRECTED THE WITHHOLDING OF THE AMOUNT OF THE INDEBTEDNESS FROM AMOUNTS DUE THE JOINT ADVENTURERS UNDER A CONTRACT FOR THE CONSTRUCTION OF A VETERANS HOSPITAL AT SALT LAKE CITY. YOU URGE THAT SUCH ACTION SHOULD NOT BE TAKEN, PRIMARILY ON THE BASIS THAT YOU FEEL THE QUESTION OF YOUR LIABILITY IS A CLOSE ONE WHICH YOU WOULD LIKE TO HAVE JUDICIALLY DETERMINED. YOU MAKE REFERENCE TO THE STATEMENT IN OUR LETTER OF NOVEMBER 15, 1956, THAT UNLESS PAYMENT OF THE AMOUNT DUE WAS RECEIVED WITHIN 21 DAYS THE MATTER WOULD BE REPORTED TO THE DEPARTMENT OF JUSTICE FOR SUIT WITHOUT FURTHER NOTICE TO YOU, AND STATE THAT THE UNITED STATES ATTORNEY FOR THE DISTRICT OF COLUMBIA HAS NOTIFIED YOU THAT HE WAS PREPARING A COMPLAINT TO RECOVER THE AMOUNT OF THE INDEBTEDNESS. YOU ALSO STATE THAT THE MEMBERS OF THE JOINT VENTURE, AS WELL AS THE SUBCONTRACTOR INVOLVED, JOHN B. KELLY CO., ARE WELL ABLE TO PAY THE AMOUNT IF IT IS FOUND TO BE DUE AND THAT A SURETY BOND CAN BE GIVEN TO THAT END IF NECESSARY. YOU REQUEST THAT INSTRUCTIONS FOR THE WITHHOLDING BE WITHDRAWN AND THE CORPS OF ENGINEERS BE ADVISED ACCORDINGLY.

THE AMOUNT IN QUESTION WAS FOUND TO BE DUE PURSUANT TO AN ADMINISTRATIVE DECISION MADE UNDER THE "DISPUTES" ARTICLE OF THE CONTRACT. THEREAFTER, UPON REQUEST IN BEHALF OF THE JOINT ADVENTURERS AND THE SUBCONTRACTOR, THE MATTER WAS THE SUBJECT OF DETAILED REVIEW BY OUR OFFICE ON SEVERAL OCCASIONS (DECISIONS OF MARCH 14 AND NOVEMBER 6, 1956, AND FEBRUARY 7, 1957) WHICH SUSTAINED THE ADMINISTRATIVE DETERMINATION. IN THE DECISION OF NOVEMBER 6, 1956, YOU WERE ADVISED THAT, BY THE TERMS OF THE CONTRACT, THIS DETERMINATION BECAME FINAL AND CONCLUSIVE UPON THE CONTRACTING PARTIES. YOU WERE ALSO ADVISED IN THIS DECISION THAT OUR CLAIMS DIVISION WAS BEING DIRECTED TO PROCEED WITH THE COLLECTION OF THE INDEBTEDNESS.

THE STATEMENT IN THE CLAIMS DIVISION LETTER OF NOVEMBER 15, 1956, TO WHICH YOU REFER, WAS SIMPLY ADVICE TO YOU THAT LEGAL PROCEEDINGS WOULD BE RECOMMENDED, IF NECESSARY. THIS STATEMENT REASONABLY MAY NOT BE REGARDED AS IN ANY WAY PREJUDICING OR RESTRICTING THE RIGHT OF THE GOVERNMENT TO EFFECT COLLECTION OF THE AMOUNT DUE BY SETOFF, AND IT IS OUR VIEW THAT THE CONSIDERATIONS MENTIONED IN YOUR LETTER AFFORD NO JUSTIFICATION FOR TAKING THE ACTION YOU HAVE REQUESTED, INASMUCH AS IT IS NOT CLAIMED THAT THE OPERATIONS OR FINANCIAL STABILITY OF ANY OF THE JOINT VENTURERS WILL BE SERIOUSLY AFFECTED BY THE PROPOSED SET-OFF ACTION, AND SUCH ACTION WILL NOT AFFECT THE RIGHTS OF ANY PARTY TO OBTAIN JUDICIAL REVIEW ON THE MERITS.