B-125459, OCT. 6, 1955

B-125459, OCT. 6, 1955

TO MR. F. M. WALKER, DISBURSING OFFICER, DEPARTMENT OF THE ARMY:

REFERENCE IS MADE TO YOUR LETTER OF AUGUST 3, 1955, FILE MRGBA, FORWARDED HERE BY THE ACTING ENGINEER COMPTROLLER'S INDORSEMENT OF SEPTEMBER 7, 1955, REQUESTING ADVICE AS TO THE DISPOSITION THAT SHOULD BE MADE OF THE SUM OF $75.75 PRESENTLY ON DEPOSIT IN A SPECIAL DEPOSIT ACCOUNT.

THE AMOUNT INVOLVED REPRESENTS THE SUM DEPOSITED BY THE WEST TRADING COMPANY AS A GUARANTEE THAT IT WOULD EITHER SCRAP OR MAKE SEAWORTHY A BARGE WHICH IT PURCHASED FROM THE CORPS OF ENGINEERS UNDER A CONTRACT DATED SEPTEMBER 23, 1953. THE RECORD DISCLOSES THAT EVEN THOUGH THE PURCHASER PAID THE FULL AMOUNT OF THE PURCHASE PRICE, $303 ($300 DEPOSITED WITH ITS BID, PLUS $3 DEPOSITED SEPTEMBER 29, 1953), TOGETHER WITH THE GUARANTEE OF $75.75, IT FAILED TO REMOVE THE BARGE WITHIN 60 DAYS AS PROVIDED IN THE CONTRACT AND, AFTER REPEATED NOTICE TO THE PURCHASER, THE GOVERNMENT RESOLD THE BARGE ON MARCH 21, 1955, FOR THE SUM OF $602.50. EXPENSES OF $40.02 WERE INCURRED IN MAKING THE SECOND SALE.

THE CONTRACT PROVIDES CONCERNING BID DEPOSITS:

"IF A BID DEPOSIT IS REQUIRED, THE BID MUST BE ACCOMPANIED BY SAID BID DEPOSIT. IN THE EVENT OF ANY DEFAULT BY THE BIDDER OR ANY FAILURE BY THE BIDDER TO COMPLY WITH ALL TERMS AND CONDITIONS OF THIS CONTRACT, ANY DEPOSIT MADE BY THE BIDDER MAY BE APPLIED BY THE GOVERNMENT TO ANY LOSS, COST, AND EXPENSE OCCASIONED TO THE GOVERNMENT THEREBY, INCLUDING ANY LOSS, COST, AND EXPENSE INCURRED IN SELLING THE PROPERTY AND INCLUDING ANY DIFFERENCE BETWEEN THE AMOUNT SPECIFIED IN THE BID AND THE AMOUNT FOR WHICH THE GOVERNMENT MAY SELL THE PROPERTY, IF THE LATTER AMOUNT BE LESS THAN THE FORMER. * * *"

THIS LANGUAGE OF THE CONTRACT RELATES TO THE 20 PERCENT BID DEPOSIT REQUIRED TO BE FILED WITH THE BID, AND IN COMPLIANCE WITH WHICH THE WEST TRADING COMPANY DEPOSITED $300 AS A DEPOSIT ON ITS BID ON THIS AND OTHER ITEMS AND IN NO WAY AFFECTS ITS RIGHTS WITH RESPECT TO THE DEPOSIT OF $75.75 AS A GUARANTEE THAT THE BARGE WOULD EITHER BE SCRAPPED OR MADE SEAWORTHY.

CONCERNING THE DEPOSIT OF $75.75, THE INVITATION FOR BIDS WHICH SUBSEQUENTLY BECAME A PART OF THE CONTRACT OF SEPTEMBER 23, 1953, PROVIDES AS FOLLOWS:

"THE SUCCESSFUL BIDDER ON ITEM NOS. 4 AND 5 WILL BE REQUIRED TO FURNISH A GUARANTEE IN THE AMOUNT OF NOT LESS THAN 25 PERCENT OF HIS BID PRICE FOR ITEM NOS. 4 AND 5, WHICH AMOUNT WILL BE RETAINED BY THE GOVERNMENT UNTIL SUCH TIME AS THE SUCCESSFUL BIDDER HAS EITHER SCRAPPED THE BOATS OR REPAIRED THEM IN A MANNER TO RENDER THEM SEAWORTHY. AS SOON AS THE BOATS HAVE BEEN SCRAPPED OR REPAIRED IN A MANNER TO RENDER THEM SEAWORTHY, TO THE SATISFACTION OF THE DISTRICT ENGINEER OR HIS AUTHORIZED REPRESENTATIVE, THE GUARANTEE WILL BE REFUNDED.'

WITH SPECIFIC REFERENCE TO FAILURE TO REMOVE THE PROPERTY THE CONTRACT PROVIDES THAT---

"IF THE PURCHASER FAILS TO REMOVE THE PROPERTY WITHIN THE SPECIFIED TIME, THE GOVERNMENT SHALL HAVE THE RIGHT TO CHARGE THE PURCHASE AND COLLECT UPON DEMAND A REASONABLE STORAGE CHARGE IF THE PROPERTY IS STORED ON PREMISES OWNED OR CONTROLLED BY THE GOVERNMENT, OR STORE THE PROPERTY ELSEWHERE FOR THE PURCHASER'S ACCOUNT, AND ALL COSTS INCIDENT TO SUCH STORING, INCLUDING HANDLING AND MOVING CHARGES, SHALL BE BORNE AND PAID BY THE PURCHASER; IN ADDITION TO THE FOREGOING RIGHTS, THE GOVERNMENT MAY, AFTER THE EXPIRATION OF THIRTY (30) DAYS AFTER THE DATE SPECIFIED FOR EMOVAL; AND UPON TEN (10) DAYS' WRITTEN NOTICE (CALCULATED FROM THE DATE OF MAILING) TO THE PURCHASER (WHICH TEN (10) DAYS' WRITTEN NOTICE MAY, AT THE OPTION OF THE CONTRACTING OFFICER, BE INCLUDED EITHER PARTLY OR WHOLLY IN THE THIRTY (30) DAYS SPECIFIED ABOVE OR MAY BE IN ADDITION THERETO), RESELL THE PROPERTY, APPLYING THE PROCEEDS THEREFROM AGAINST THE STORAGE AND ANY OTHER COSTS INCURRED FOR PURCHASER'S ACCOUNT. * * *"

INASMUCH AS THE BARGE HAS BEEN RESOLD BY THE GOVERNMENT, WEST TRADING COMPANY APPEARS TO BE UNDER NO FURTHER OBLIGATION TO SCRAP THE BARGE OR TO MAKE IT SEAWORTHY. IN FACT, THE SECOND PURCHASER HAS FULFILLED HIS SIMILAR OBLIGATION IN THIS RESPECT. CONSEQUENTLY, AND SINCE THERE IS NOTHING IN THE CONTRACT INDICATING THAT THE GUARANTEE DEPOSIT WOULD BE RETAINED AS LIQUIDATED DAMAGES IN THE CIRCUMSTANCES CONSIDERED HEREIN, AND SINCE THE GOVERNMENT HAS INCURRED NO LOSS BY THE RESALE OF THE BARGE, IT APPEARS THAT WEST TRADING COMPANY IS ENTITLED TO A REFUND OF ITS GUARANTEE OF $75.75 23 COMP. GEN. 234. SUCH AMOUNT MAY BE SO REFUNDED EVEN THOUGH NO SPECIFIC CLAIM HAS BEEN RECEIVED THEREFOR. SEE PARAGRAPH 4, ACCOUNTING SYSTEMS MEMORANDUM NO. 28 DATED JUNE 26, 1953,32 COMP. GEN. 649, 650.