B-142111, MAR. 16, 1960

B-142111, MAR. 16, 1960

TO THE SECRETARY OF COMMERCE:

REFERENCE IS MADE TO A LETTER (08-00.1) DATED FEBRUARY 18, 1960, WITH ENCLOSURES, FROM THE REGIONAL ENGINEER AND CONTRACTING OFFICER, REGION EIGHT, BUREAU OF PUBLIC ROADS, PORTLAND, OREGON, IN WHICH HE REQUESTS A DECISION AS TO WHETHER, PURSUANT TO A REQUEST OF THE BUREAU OF LAND MANAGEMENT, THE BUREAU OF PUBLIC ROADS MAY PROPERLY WITHHOLD IN MAKING FINAL SETTLEMENT OF ROAD CONSTRUCTION CONTRACT NO. CPR 8-9346 WITH E. A. KRUSE, YONCALLA, OREGON, THE SUM OF $34,139.05 PERTAINING TO AN UNSETTLED CONTROVERSY BETWEEN THE LAND MANAGEMENT BUREAU AND E. A. KRUSE GROWING OUT OF COLLATERAL TIMBER SALE CONTRACT NO. 14-11-001/8/-153.

THE RECORD SHOWS THAT THE ROAD CONSTRUCTION CONTRACT NO. CPR 8-9346 WITH E. A. KRUSE WHICH INVOLVED OREGON TIMBER ACCESS ROAD PROJECT BLM 620A, BURNT MOUNTAIN ROAD, CONSISTING OF 7.132 MILES OF GRADING AND BRIDGE CONSTRUCTION WAS ACCEPTED BY PUBLIC ROADS AS COMPLETED ON AUGUST 22, 1959. THE ROAD CONSTRUCTION WAS ACTUALLY PERFORMED AT THE REQUEST OF LAND MANAGEMENT AND FINANCED WITH ITS FUNDS TRANSFERRED TO PUBLIC ROADS FOR SUCH PURPOSE. A FINAL SETTLEMENT VOUCHER IN THE SUM OF $41,203.01 COVERING THE ROAD CONTRACT WAS SIGNED BY THE CONTRACTOR UNDER DATE OF OCTOBER 12, 1959, BUT HAS NOT YET BEEN PAID BY THE BUREAU OF PUBLIC ROADS IN VIEW OF THE REQUEST FROM LAND MANAGEMENT. THE SPECIAL PROVISIONS OF THE ROAD CONTRACT REQUIRED THAT KRUSE ENTER INTO A SEPARATE TIMBER SALE CONTRACT WITH LAND MANAGEMENT COVERING MERCHANTABLE TIMBER WITHIN THE CLEARED AREA FOR THE ROAD AND A FIFTY FOOT STRIP ON EACH SIDE THEREOF. UNDER THE CONTRACT SUCH TIMBER WAS TO BECOME THE PROPERTY OF THE CONTRACTOR UPON PAYMENT THEREFOR AT SPECIFIED RATES. THE CONTROVERSY HERE INVOLVED BETWEEN LAND MANAGEMENT AND THE CONTRACTOR CONCERNS THE METHOD USED FOR SCALING THE TIMBER AND A DEPOSIT REQUIRED IN ADVANCE OF FALLING TIMBER IN EXCESS OF THE VOLUME COVERED BY PREVIOUS DEPOSITS. THE AMOUNTS IN CONTROVERSY ARE $6,213.95 FOR TIMBER ON THE RIGHT-OF-WAY AND, IN ADDITION, $27,925.10 IN TRIPLE DAMAGES. THE RECORD IS NOT CLEAR WHETHER ANY BOND MAY BE INVOLVED. THE CONTRACTING OFFICER STATES THAT INFORMAL DISCUSSIONS WITH LAND MANAGEMENT INDICATE THAT THE MATTER IS NOT YET A FIRM DEBT, THAT ADMINISTRATIVE APPEALS RIGHTS AVAILABLE TO THE CONTRACTOR HAVE NOT YET BEEN EXHAUSTED, AND THAT POSSIBLY TWO OR THREE MONTHS MORE MAY BE INVOLVED PRIOR TO REACHING A SETTLEMENT UNDER THE TIMBER SALE CONTRACT.

SINCE THIS IS A CASE INVOLVING A PAYMENT BY AN AGENCY PURSUANT TO ITS ADMINISTRATIVE SETTLEMENT OF A CONTRACTOR'S CLAIM WHERE THE CLAIMANT IS REPORTED TO BE INDEBTED IN A CONTROVERSIAL AMOUNT TO THE UNITED STATES ON ACCOUNT OF TRANSACTIONS ADMINISTERED BY ANOTHER AGENCY, ACTION SHOULD BE TAKEN BY THE BUREAU OF PUBLIC ROADS WHEREBY AN AMOUNT EQUAL TO THE CONTROVERSIAL AMOUNT OF INDEBTEDNESS WILL BE WITHHELD UNTIL SETTLEMENT OF THE CONTROVERSY.