B-150760, SEP. 13, 1963

B-150760, SEP. 13, 1963

TO THE PHOTRON INSTRUMENT COMPANY:

IN YOUR LETTERS OF MAY 21, JUNE 4 AND 10, AND AUGUST 26, 1963, YOU REQUEST RECONSIDERATION OF OUR DECISION OF APRIL 12, 1963, IN WHICH WE DENIED YOUR REQUEST FOR RELIEF FROM CERTAIN ACTIONS TAKEN BY THE DEPARTMENT OF THE ARMY IN CONNECTION WITH A TERMINATION OF YOUR CONTRACT NO. DA-29-040-0RD-1627.

YOU ASK WHY, SINCE YOUR NAME APPEARED ON THE LIST OF "CONTRACTORS INDEBTED TO THE UNITED TATES" ON NOVEMBER 30, 1962, YOU WERE NOT NOTIFIED OF SUCH ACTION AT THAT TIME RATHER THAN ON DECEMBER 27, 1962. WE KNOW OF NO STATUTORY REQUIREMENT THAT CONTRACTORS INDEBTED TO THE ABOVE REFERRED- TO LIST. WE MUST REPEAT THAT THE LEGALLY SIGNIFICANT DATES OF NOTIFICATION WERE APRIL 21, 1961, WHEN YOU WERE FIRST NOTIFIED THAT YOUR COMPANY HAS BEEN ASSESSED EXCESS COST OF $6,692.70 IN CONNECTION WITH A BREACH OF CONTRACT, AND AUGUST 27, 1962, WHEN, AFTER UNSUCCESSFUL APPEALS BEFORE THE ARMED SERVICES BOARD OF CONTRACT APPEALS, YOU WERE AGAIN REQUESTED TO MAKE IMMEDIATE PAYMENT FOR THE EXCESS COST. ON NOVEMBER 5, 1962, YOU ASKED FOR A THIRD RECONSIDERATION OF YOUR CASE AND STATED THAT YOU COULD NOT PAY THE DEBT. NEITHER THE DEPARTMENT OF THE ARMY NOR OUR OFFICE HAD ANY REASON TO BELIEVE THAT YOU WERE ANY MORE CAPABLE, AS YOU NOT ALLEGE, OF PAYING THE DEBT ON NOVEMBER 30 THAN YOU WERE ON NOVEMBER 5.

YOU AGAIN STATE THAT YOU WERE REPEATEDLY TOLD BY MR. GREENFIELD, DIRECTOR OF CONTRACT FINANCING, AND BY LIEUTENANT COLONEL SHERMAN, FINANCE AND ACCOUNTING OFFICE AT FORT BELVOIR, VIRGINIA, THAT YOUR COMPANY HAD BEEN PLACED ON A GOVERNMENT "BANKRUPTCY LIST.' YOU ALSO ALLEGE THAT BECAUSE YOU ARE OR WERE ON SUCH A LIST, YOU HAVE BEEN BLACKBALLED AS FAR AS GOVERNMENT CONTRACT AWARDS ARE CONCERNED.

THE DEPARTMENT OF THE ARMY REPORTS THAT IT KNOWS OF NO GOVERNMENT BANKRUPTCY LIST. IT STATES THAT WHILE INDIVIDUAL LETTERS ARE ISSUED TO ALL ARMY FINANCE AND ACCOUNTING OFFICES UPON RECEIPT OF WRITTEN NOTICE THAT AN ACTION HAS BEEN TAKEN UNDER THE BANKRUPTCY ACT AGAINST A GOVERNMENT CONTRACTOR, NO SUCH LETTER HAS EVER BEEN ISSUED AGAINST THE PHOTRON INSTRUMENT COMPANY. MR. GREENFIELD REPORTS TO OUR OFFICE THAT THE ONLY REFERENCE WHICH HE MADE TO THE TERM "BANKRUPTCY" DURINGA TELEPHONE CONVERSATION OF JANUARY 17, 1963, WITH MR. FAYERWEATHER OF YOUR COMPANY, WAS AS FOLLOWS:

"IF AN INVOLUNTARY PETITION IN BANKRUPTCY WAS FILED AGAINST YOU IN A FEDERAL DISTRICT COURT, SUCH ACTION WOULD RESULT IN A NOTICE BEING PUBLISHED BY THE FINANCE CENTER TO ALL FINANCE OFFICERS. HOWEVER THIS OFFICE HAS NO KNOWLEDGE OF ANY ACTION.'

COLONEL SHERMAN REPORTS THAT THE ONLY REFERENCE TO THE TERM "BANKRUPTCY" OR "BANKRUPTCY LIST" OCCURRING DURING HIS CONVERSATION WITH MR. FAYERWEATHER WAS MADE IN REPLY TO A QUESTION AS TO WHY THE ARMY WAS WITHHOLDING A PAYMENT UNDER A CONTRACT. IN ANSWER, COLONEL SHERMAN STATED THAT PAYMENTS WERE OFTEN WITHHELD BECAUSE OF BANKRUPTCY, AND ASKED MR. FAYERWEATHER IF HE KNEW WHETHER PHOTRON WERE ON "SUCH A LIST.' UPON BEING TOLD THAT PHOTRON WAS NOT ON SUCH A LIST, COLONEL SHERMAN SUGGESTED THAT PAYMENT MAY HAVE BEEN WITHHELD BECAUSE OF OTHER MONEY OWED TO THE GOVERNMENT, AND OFFERED TO CHECK INTO THE MATTER AND DETERMINE WHY PAYMENT HAD NOT BEEN MADE.

YOU SUBMIT TWO ALLEGED EXAMPLES OF HAVING BEEN DENIED THE OPPORTUNITY TO BID ON GOVERNMENT CONTRACTS. YOU SAY THAT THE ARMY ELECTRONIC MATERIAL AGENCY OF PHILADELPHIA, PENNSYLVANIA, DID NOT MAIL YOU A REQUEST FOR PROPOSALS FOR DIRECT-WRITING RECORDING EQUIPMENT, ALTHOUGH YOU APPLIED FOR SUCH A LISTING ON APRIL 1, 1963, AND ALTHOUGH THE REQUEST WAS NOT ISSUED UNTIL MAY 10, 1963, BECAUSE YOUR NAME WAS ON THE "BANKRUPTCY LIST.' ARE INFORMED THAT THE ABOVE PROCUREMENT WAS CONTEMPLATED AS A SOLE SOURCE PURCHASE. THEREFORE, NO OFFERORS OTHER THAN THE SOLE SOURCE WERE REQUESTED TO SUBMIT PROPOSALS, ALTHOUGH NOTICE OF THE PROCUREMENT WAS PRINTED IN THE SYNOPSIS PUBLISHED BY THE DEPARTMENT OF COMMERCE.

FURTHERMORE, THE PHILADELPHIA ELECTRONIC MATERIAL AGENCY ADVISES US THAT AWARD OF THE REFERENCED PROCUREMENT HAS BEEN HELD UP IN ORDER TO CONDUCT NEGOTIATIONS WITH PHOTRON. WE ARE ALSO INFORMED THAT YOUR COMPANY HAS BEEN ON BIDDERS' LIST FOR VARIOUS ITEMS SINCE FEBRUARY 2, 1963, AND THAT YOUR NAME HAS NEVER BEEN REMOVED FROM THOSE LISTS.

YOU MAKE A SIMILAR ALLEGATION IN REGARD TO YOUR NOT HAVING RECEIVED AN INVITATION FOR BIDS ISSUED ON MAY 20, 1963, BY THE UNITED STATES NAVY PURCHASING OFFICE, FOR SIMILAR EQUIPMENT. YOU SAY YOU HAD APPLIED FOR PLACEMENT ON THIS LIST ON OCTOBER 2, 1962. BY A COPY OF LETTER DATED JUNE 26, 1963, TO YOUR COMPANY, THE DEPARTMENT OF THE NAVY ADVISES US THAT YOUR NAME HAD BEEN REMOVED FROM THE BIDDERS' LISTAS A RESULT OF A CLERICAL ERROR, AND THAT IT HAS SINCE BEEN REPLACED ON THIS LIST.

FROM THE FOREGOING, IT APPEARS THAT THERE IS NO LEGAL BASIS TO JUSTIFY A REVERSAL OF OUR DECISION OF APRIL 12, 1963, AND ACCORDINGLY THAT DECISION IS SUSTAINED.