B-124021, JUL. 15, 1955

B-124021, JUL. 15, 1955

TO MASTER CLOTHES, INC.:

REFERENCE IS MADE TO YOUR LETTERS OF MARCH 30 AND MAY 17, 1955, IN EFFECT REQUESTING CONSIDERATION OF THE GOVERNMENT'S CLAIM AGAINST YOU IN THE AMOUNT OF $109.20, REPRESENTING THE DIFFERENCE BETWEEN $0.33 PER POUND RECEIVED FOR THE SALE OF SCRAP AND $0.54 PER POUND SPECIFIED IN CONTRACT NO. DA-30-352-TAP-1780. YOU REQUEST THE GENERAL ACCOUNTING OFFICE TO FORWARD TO YOU A MEMORANDUM ACKNOWLEDGING A CREDIT IN THE AFOREMENTIONED SUM.

UNDER THE CONTRACT ENTERED INTO BY YOU WITH THE ARMED SERVICES TEXTILE AND APPAREL PROCUREMENT AGENCY YOU AGREED TO FURNISH AND DELIVER 2,526 BLUE SERGE UNIFORMS AT A UNIT PRICE OF $14.15 OR FOR THE TOTAL CONSIDERATION OF $35,742.90. YOU FURTHER AGREED TO SELL THE SCRAP GENERATED DURING THE PERFORMANCE OF THIS CONTRACT FROM THE MATERIALS FURNISHED BY THE GOVERNMENT AND REIMBURSE THE GOVERNMENT AT THE RATE OF $0.54 PER POUND FOR ALL SUCH SCRAP GENERATED.

YOU CONTEND THAT SMALL QUANTITIES OF SCRAP WERE DIFFICULT TO SELL, AND CONSEQUENTLY, YOU SOLD 520 POUNDS OF SCRAP TO S. SHORE AND SONS AT THE PRICE OF $0.33 PER POUND. YOU FURTHER CONTEND THAT YOU WERE ADVISED ON JUNE 2, 1954, BY AN AGENT OF THE GOVERNMENT THAT THE CLOTHING SUPPLY OFFICE WAS AWARE OF THE DIFFICULTY IN DISPOSING OF SMALL QUANTITIES OF SCRAP AND, THEREFORE, THAT OFFICE WAIVED THE ORIGINAL CLAUSE OUTLINED ON PAGE 10 OF THE CONTRACT WHICH SPECIFIED DISPOSAL OF THE SCRAP AT $0.54 PER POUND.

THE RECORD SHOWS THAT BY LETTER DATED OCTOBER 27, 1954, YOU WERE INFORMED BY THE CONTRACTING OFFICER THAT THE CLOTHING SUPPLY OFFICE HAD NO AUTHORITY TO RELEASE YOU FROM YOUR OBLIGATION FOR THE PAYMENT OF THE DIFFERENCE BETWEEN $0.54 AND $0.33 PER POUND FOR THE SCRAP. IN THIS REGARD IT IS NOTED THAT THE CONTRACTING OFFICER, IN HIS LETTER OF OCTOBER 8, 1954, TO YOU STATED THAT YOUR BILL OF SALE FOR THE SCRAP WAS DATED APRIL 30, 1954,"LONG BEFORE THE NAVY WAS APPROACHED BY YOU FOR A WAIVER OF THE SCRAP PRICE CLAUSE.' THE LAW IS WELL SETTLED THAT WHILE AN AGENT OF A PRIVATE INDIVIDUAL OR CONCERN ACTING WITHIN THE SCOPE OF HIS APPARENT AUTHORITY MAY BIND HIS PRINCIPAL IN INSTANCES WHERE HE HAS EXCEEDED HIS ACTUAL AUTHORITY, THE RULE IS OTHERWISE IN THE CASE OF A GOVERNMENT AGENT. ANYONE DEALING WITH THE UNITED STATES THROUGH AN ALLEGED AGENT IS CHARGED WITH NOTICE OF THE ACTUAL AUTHORITY OF SUCH PERSON AND IF HE HAS NO ACTUAL AUTHORITY TO CONTRACT ON BEHALF OF THE UNITED STATES IN THE MATTER IN QUESTION, THE RULE IS THAT NO CONTRACT, EITHER EXPRESS OR IMPLIED, CAN BE CREATED BY RENDITION OF SERVICES AT HIS REQUEST. SEE SMALE AND ROBINSON, INC. V. UNITED STATES, 123 F.SUPP. 766 AND CHARLES W. KELLY V. UNITED STATES, 116 C.CLS. 818.

ALSO, IT IS A SETTLED RULE THAT AGENTS AND OFFICERS OF THE UNITED STATES HAVE NO AUTHORITY TO GIVE AWAY THE MONEY OR PROPERTY OF THE GOVERNMENT, OR SURRENDER A RIGHT VESTED IN THE GOVERNMENT, OR TO WAIVE CONTRACTUAL RIGHTS WHICH HAVE ACCRUED TO THE GOVERNMENT, OR TO MODIFY EXISTING CONTRACTS WITHOUT A COMPENSATING BENEFIT TO THE GOVERNMENT. SEE PACIFIC HARDWARE AND STEEL CO., V. UNITED STATES, 49 C.CLS. 327.

IN VIEW OF THE FOREGOING AUTHORITIES THERE APPEARS NO LEGAL BASIS FOR ISSUING A CREDIT MEMORANDUM TO YOU IN THE SUM OF $109.20. ACCORDINGLY, IT IS REQUESTED THAT YOU PROMPTLY REMIT TO THE GENERAL ACCOUNTING OFFICE A CHECK OR DRAFT IN THE AMOUNT OF $109.20 MADE PAYABLE TO "U.S. GENERAL ACCOUNTING OFFICE" IN ORDER THAT FURTHER STEPS TO ENFORCE COLLECTION MAY NOT BE NECESSARY.