B-162922, OCT 30, 1972

B-162922, OCT 30, 1972

CONTRACT - SETOFF - DEBTS OF JOINT VENTURER DECISION DENYING THE CLAIM OF SURPLUS TIRE SALES FOR A REFUND IN THE AMOUNT OF $162.86 COLLECTED BY THE DEFENSE LOGISTICS SERVICE CENTER, OAKLAND, CALIF., BY SETOFF AND REPRESENTING AN OVERAGE OF 420 POUNDS OF STEEL BARS AT $0.31153 PER POUND DELIVERED TO B & J METALS COMPANY UNDER ANOTHER CONTRACT. EVEN IF THE BID OF B & J WAS NONRESPONSIVE, IT IS ESTABLISHED THAT WHILE A CONTRACT NOT COMPLYING WITH A STATUTE MAY NOT BE ENFORCED AGAINST THE GOVERNMENT, IT CAN BE ENFORCED AGAINST THE OTHER PARTY. UNITED STATES V. NEW YORK & PORTO RICO STEAMSHIP CO., 239 U.S. 88, (1915). FURTHER, SINCE SURPLUS TIRE SALES WAS A JOINT VENTURER UNDER THE CONTRACT WITH B & J, THE SETOFF DOES NOT APPEAR TO HAVE BEEN IMPROPER.

TO SURPLUS TIRE SALES:

WE REFER TO YOUR LETTER OF AUGUST 17, 1972, AND PRIOR CORRESPONDENCE, CLAIMING A REFUND IN THE AMOUNT OF $162.86 COLLECTED BY THE DEFENSE LOGISTICS SERVICE CENTER, OAKLAND, CALIFORNIA, BY SETOFF.

THE AMOUNT SET OFF REPRESENTS $130.84, EXCLUDING INTEREST, FOR AN OVERAGE OF 420 POUNDS OF STEEL BARS AT $0.31153 PER POUND DELIVERED TO B & J METALS COMPANY UNDER SALES CONTRACT NO. 44-8035-102.

THE BID UPON WHICH THE CONTRACT WAS BASED WAS ON A $0.31153 PER POUND BASIS. ALTHOUGH THE INVITATION HAD SOLICITED BIDS ON AN "EACH" BASIS FOR FIVE STEEL BARS, B & J METALS CHOSE TO BID ON A PER POUND BASIS. WHEN B & J METALS LEARNED THAT ITS BID HAD BEEN REJECTED BY THE CONTRACTING OFFICER AND AN AWARD MADE TO ANOTHER BIDDER, IT PROTESTED AGAINST THAT ACTION. THAT PROTEST WAS CONSIDERED IN B-162922, DECEMBER 13, 1967, AND IT WAS HELD THEREIN THAT THE AWARD MADE TO THE OTHER BIDDER SHOULD BE CANCELED AND AWARD MADE TO B & J METALS. THE BASIS FOR THE DECISION NEED NOT BE REPEATED HERE. AS A RESULT OF OUR DECISION, A NOTICE OF AWARD WAS ISSUED TO B & J METALS SHOWING THE QUANTITY AS 11,800 POUNDS, THE UNIT PRICE AS $0.31153, AND THE TOTAL PRICE AS $3,676.06, THE SAME FIGURES AS APPEARED IN ITS BID. SINCE THE STEEL WAS SOLD TO B & J METALS ON A PER POUND BASIS, A CLAIM WAS MADE FOR THE OVERAGE ON THE BASIS OF THE ADJUSTMENT FOR VARIATION IN WEIGHT PROVISION IN THE CONTRACT. AFTER ALL DEMANDS FOR PAYMENT FOR THE OVERAGE PROVED UNSUCCESSFUL, THE AMOUNT FOR THE OVERAGE PLUS INTEREST WAS COLLECTED BY DSA BY SETOFF FROM A BID DEPOSIT FURNISHED BY YOU ON A SUBSEQUENT SALE WHEN IT WAS LEARNED THAT YOU WERE A JOINT VENTURER WITH B & J METALS ON THE SALE.

THE BID OF B & J METALS WAS RECOGNIZED IN OUR DECISION OF DECEMBER 13, 1967, AS BEING A BID ON A PER POUND BASIS. AFTER THE NOTICE OF AWARD WAS ISSUED TO B & J METALS SHOWING THAT THE AWARD WAS ON A PER POUND BASIS, NO COMPLAINT WAS MADE BY B & J METALS UNTIL AFTER DSA MADE CLAIM FOR THE OVERAGE DELIVERED.

AS A RESULT OF SUCH CLAIM FOR THE EXCESS WEIGHT OF STEEL DELIVERED TO B & J METALS AND THE COLLECTION OF THE AMOUNT THEREFOR BY SETOFF FROM YOU, IT IS CONTENDED THAT THE BID ON A PER POUND BASIS WAS NONRESPONSIVE AND THAT A CONTRACT ON THAT BASIS SHOULD NOT HAVE BEEN AWARDED. ASSUMING FOR THE PURPOSE OF THIS DECISION THAT THE BID WAS NONRESPONSIVE, IT IS ESTABLISHED THAT WHILE A CONTRACT NOT COMPLYING WITH A STATUTE CANNOT BE ENFORCED AGAINST THE GOVERNMENT, SUCH A CONTRACT CAN BE ENFORCED AGAINST THE OTHER PARTY. UNITED STATES V. NEW YORK & PORTO RICO STEAMSHIP CO., 239 U.S. 88, 92 (1915). 49 COMP. GEN. 761 (1970).

FURTHER, SINCE YOU ADMIT THAT YOU WERE A JOINT VENTURER UNDER THE CONTRACT WITH B & J METALS, THE SETOFF AGAINST YOU DOES NOT APPEAR TO HAVE BEEN IMPROPER. MOREOVER, WE ARE UNAWARE OF ANY RULE THAT REQUIRES A CONTRACT BE FORMALLY AMENDED TO SHOW THE OBLIGATION TO BE THAT OF A JOINT VENTURER. ACCORDINGLY, YOUR REFUND CLAIM IS DENIED.