B-144247, NOV. 1, 1960

B-144247, NOV. 1, 1960

DEFAULT.'

BY YOUR LETTER OF APRIL 6, 1960, YOU ADVISED THAT A HEARING OF THE APPEAL OF THE CONTRACTOR WAS HELD ON MAY 19, 1959, FOLLOWING WHICH IT WAS CONCLUDED THAT AS A MATTER OF FACT THE CONTRACTOR WAS CORRECTLY FOUND IN DEFAULT AS OF JUNE 27, 1958. ACCORDINGLY, ON FEBRUARY 2, 1960, THE DIRECTOR, BUREAU OF THE CENSUS, WROTE THE CONTRACTOR'S ATTORNEY DENYING THE APPEAL AND ATTACHED THERETO HIS FINDINGS THAT THE FACTS JUSTIFIED TERMINATING THE CONTRACTOR FOR DEFAULT. SINCE ALL OF THE FACTS AND CIRCUMSTANCES SURROUNDING THE ATTEMPTED PERFORMANCES ON THE PART OF THE CONTRACTOR ARE ADEQUATELY SET FORTH IN THE TRANSCRIPT OF PROCEEDINGS AND IN THE FINDINGS ON APPEAL, THEY NEED NOT BE REPEATED HERE. WE HAVE ONLY TO OBSERVE THAT ON MARCH 4, 1960, THE DIRECTOR FURTHER ADVISED THE CONTRACTOR'S ATTORNEY THAT THE ABOVE DECISION WAS FINAL SO FAR AS THE DEPARTMENT OF COMMERCE WAS CONCERNED.

IN THE LIGHT OF THE FOREGOING, AND SINCE WE FIND NO GROUND FOR REJECTING THE DECISION RENDERED UPON THE CONTRACTOR'S APPEAL, IT APPEARS THAT IT NOW REMAINS ONLY TO PROCEED WITH THE ENFORCEMENT OF THE CONTRACTOR'S LIABILITY FOR EXCESS COSTS OR LIQUIDATED DAMAGES, OR OTHER CONSEQUENCES OF THE DEFAULT, AS INDICATED IN OUR LETTER OF FEBRUARY 12, 1959.

YOU STATE THAT CERTAIN EQUIPMENT DELIVERED UNDER THE CONTRACT IS PRESENTLY IN THE CUSTODY OF THE BUREAU OF THE CENSUS, ALTHOUGH IT HAS NOT BEEN ACCEPTED AS THE END PRODUCT CONTEMPLATED BY THE CONTRACT. UNDER THE TERMS OF THE CONTRACT, IT APPEARS THAT TITLE TO SUCH PROPERTY PASSED TO THE BUREAU AS A SECURITY FOR PARTIAL PAYMENTS, AND NOT AS A DISCHARGE OF THE CONTRACTOR'S OBLIGATIONS. WITH RESPECT THERETO, YOU PRESENT THE INQUIRY WHETHER THE GOVERNMENT HAS THE RIGHT TO TRANSFER THE TITLE TO SUCH EQUIPMENT TO THE NATIONAL BUREAU OF STANDARDS WHICH IS LIKEWISE WITHIN THE DEPARTMENT OF COMMERCE.

SINCE ANY RIGHT OF THE CONTRACTOR TO RETURN OF THE EQUIPMENT IN QUESTION WOULD BE CONDITIONED UPON ITS SATISFYING THE GOVERNMENT'S CLAIMS ARISING FROM THE CONTRACTOR'S DEFAULT, IF IT BE ADMINISTRATIVELY DETERMINED THAT SUCH EQUIPMENT WOULD IN FACT SERVE A USEFUL PURPOSE TO THE GOVERNMENT, WE SEE NO OBJECTION TO YOUR DEPARTMENT, ACCEPTING SO MUCH THEREOF AS MAY BE USABLE AT A FAIR AND REASONABLE VALUATION, TO BE APPLIED IN MITIGATION OF THE DAMAGES OCCASIONED THE GOVERNMENT AS A RESULT OF THE DEFAULT. IN THE ABSENCE OF AGREEMENT BY THE CONTRACTOR TO THE VALUATION, IT WOULD OF COURSE BE SUBJECT TO REVIEW IN ANY JUDICIAL ACTION WHICH MAY BE BROUGHT IN THE MATTER.