B-149501, AUG. 28, 1962

B-149501, AUG. 28, 1962

TO DIRECTOR, DEFENSE SUPPLY AGENCY:

BY LETTER DATED SEPTEMBER 25, 1961, COMPT-C, COPY ENCLOSED, THE DIRECTOR OF CONTRACT FINANCING, OFFICE OF THE COMPTROLLER OF THE ARMY, REPORTED TO US AS UNCOLLECTIBLE THE INDEBTEDNESS OF MR. CHARLES RICH,ROUTE 3, BOX 276, ANDERSON, INDIANA, IN THE AMOUNT OF $6,040.76 WHICH REPRESENTS STORAGE CHARGES ASSESSED AND A BALANCE OTHERWISE DUE AS A RESULT OF THE CONTRACTOR'S DEFAULT UNDER SALES CONTRACT O.I.NO. 5764 AWARDED TO IT BY THE ATLANTA GENERAL DEPOT, U.S. ARMY, FOREST PARK, GEORGIA, ON OCTOBER 19, 1960.

THE SURPLUS PROPERTY WHICH MR. RICH FAILED TO PAY FOR AND REMOVE WAS TWO LOTS OF CANNED WATER COVERED BY ITEMS 297 AND 298 OF SPOT BID SALES INVITATION NO. 09-030-S-61-6. OUR RECORDS SHOW THAT THE ABOVE DESCRIBED PROPERTY WAS FIRST OFFERED FOR SALE AS ITEMS 143 AND 144 OF SPOT BID SALES INVITATION NO. 09-030-S-60-9 AND THAT NA-GRO SALES WAS THE SUCCESSFUL BIDDER ON THOSE ITEMS; THAT NA-GRO SALES DEFAULTED AND THE PROPERTY WAS READVERTISED UNDER SPOT BID SALES INVITATION NO. 09 030-S-61-6, UNDER WHICH DIESEL ELECTRIC SERVICE, INC., WAS THE SUCCESSFUL BIDDER; AND THAT UPON THE DEFAULT OF DIESEL ELECTRIC SERVICE, INC., THE PROPERTY WAS READVERTISED UNDER SPOT BID SALES INVITATION NO. 09-030-S-61-6 AND AWARDED TO MR. CHARLES RICH, WHOSE INDEBTEDNESS IS NOT BEING CONSIDERED. EACH OF THE ABOVE NAMED BIDDERS UPON DEFAULT WAS CHARGED THE DIFFERENCE BETWEEN THE BID PRICE AND RESALE PRICE AND ASSESSED STORAGE CHARGES IN ACCORDANCE WITH THE TERMS OF EACH CONTRACT. UPON THE DEFAULT OF MR. RICH, THE PROPERTY WAS READVERTISED AND SOLD TO ANOTHER BIDDER WHO PICKED UP THE PROPERTY ON APRIL 27, 1961.

THE DIRECTOR OF CONTRACT FINANCING, OFFICE OF THE COMPTROLLER OF THE ARMY, BY LETTER DATED JUNE 27, 1961, COMPT-C, REPORTED TO OUR CLAIMS DIVISION AS UNCOLLECTIBLE THE INDEBTEDNESS OF NA-GRO SALES IN THE AMOUNT OF $4,394.85 REPRESENTING STORAGE CHARGES OF $4,301.80 AND A BALANCE DUE AS A RESULT OF ITS DEFAULT UNDER CONTRACT O.I.NO. 5130, SPOT BID SALE 09- 030-S-60-9, AWARDED BY THE ATLANTA GENERAL DEPOT, U.S. ARMY, FOREST PARK, GEORGIA. ON AUGUST 10, 1961, OUR CLAIMS DIVISION MADE DEMAND ON NA-GRO SALES FOR PAYMENT OF ITS INDEBTEDNESS AND IN RESPONSE THERETO, THE COMPANY BY LETTER DATED SEPTEMBER 29, 1961, REQUESTED REMISSION OF THE STORAGE CHARGES IN THE AMOUNT OF $4,301.80, IN ACCORDANCE WITH SECTION 10 (A) OF THE ACT OF SEPTEMBER 5, 1950, 41 U.S.C. 256A. IN A LETTER DATED OCTOBER 19, 1961, COPY ENCLOSED, OUR OFFICE REQUESTED THE SECRETARY OF THE ARMY TO SUBMIT WHATEVER RECOMMENDATION HE DEEMED APPROPRIATE. THE DEPARTMENT OF THE ARMY FORWARDED OUR REQUEST FOR A RECOMMENDATION IN THE MATTER TO YOU FOR CONSIDERATION SINCE YOU HAD ASSUMED RESPONSIBILITY FOR ARMY PROPERTY DISPOSAL FUNCTIONS. IN A LETTER DATED JUNE 5, 1962, COPY ENCLOSED, YOUR COUNSEL RECOMMENDED THAT THE STORAGE CHARGES ASSESSED AGAINST NA-GRO SALES BE REDUCED TO $74.64 AND THAT THE BALANCE BE REMITTED BY OUR OFFICE UNDER THE AUTHORITY OF 41 U.S.C. 256A. BY DECISION OF JULY 11, 1962, B-147068, COPY ENCLOSED, OUR OFFICE AUTHORIZED THE REMISSION OF $4,227.16 LIQUIDATED DAMAGES (STORAGE CHARGES) TO NA-GRO SALES.

THE RECOMMENDATION OF YOUR COUNSEL WAS ACCOMPANIED BY A SUPPLEMENTAL REPORT DATED FEBRUARY 26, 1962, FILE REFERENCE GDATA-L, COPY ENCLOSED, FROM THE PROPERTY DISPOSAL OFFICER AT THE ATLANTA GENERAL DEPOT, U.S. ARMY, AND IN SUCH REPORT IT WAS STATED THAT AN ESTIMATE OF ACTUAL COST OF STORAGE TO THE GOVERNMENT DURING THE PERIOD BEGINNING FROM THE TIME NA-GRO SALES WAS OBLIGATED TO PICK UP THE PROPERTY TO THE TIME THAT THE FOURTH SUCCESSFUL BIDDER PICKED UP THE PROPERTY WAS $225 AND THAT SUCH AMOUNT SHOULD BE PRORATED AMONG THE THREE DEFAULTING CONTRACTORS IN THE FOLLOWING MANNER: NA-GRO SALES SHOULD BE CHARGED FOR 139 DAYS OF STORAGE AMOUNTING TO $74.64, DIESEL ELECTRIC SERVICE, INC., SHOULD BE CHARGED FOR 120 DAYS OF STORAGE AMOUNTING TO $64.44, AND MR. CHARLES RICH SHOULD BE CHARGED FOR 160 DAYS OF STORAGE AMOUNTING TO $85.92.

WE HAVE NOT AS YET MADE DEMAND UPON MR. RICH FOR PAYMENT OF THE INDEBTEDNESS REPORTED TO US. IN VIEW OF THE CIRCUMSTANCES SURROUNDING THE DEFAULT OF NA-GRO SALES, DIESEL ELECTRIC SERVICE, C., AND MR. CHARLES RICH AND YOUR COUNSEL'S RECOMMENDATION IN THE CASE OF NA-GRO SALES, THE MATTER IS BEING SUBMITTED TO YOU FOR WHATEVER RECOMMENDATION YOU MAY DEEM APPROPRIATE UNDER 41 U.S.C. 256A, AND IN THE EVENT YOUR SHOULD DETERMINE THAT MR. RICH IS ENTITLED TO RELIEF, IN WHOLE OR IN PART, IT IS REQUESTED THAT YOU FURNISH WITH YOUR RECOMMENDATION A REPORT OF ANY FACTS TOGETHER WITH ANY DOCUMENTARY MATERIAL DEEMED PERTINENT TO THE CASE IN ADDITION TO THAT HERETOFORE FURNISHED OUR OFFICE.

THE PAPERS SUBMITTED BY THE DIRECTOR OF CONTRACT FINANCING WITH HIS LETTER OF SEPTEMBER 25, 1961, ARE ENCLOSED AND SHOULD BE RETURNED WITH YOUR REPORT.