B-174494, JAN 31, 1972

B-174494, JAN 31, 1972

CONTRACTS - AMOUNT DUE - DISPOSITION - PRIVITY CONCERNING THE DISPOSITION OF AN AMOUNT DUE UNDER A FIRE EQUIPMENT RENTAL AGREEMENT BETWEEN ELLSWORTH D. BROWN AND THE FOREST SERVICE. THE GOVERNMENT NEED NOT BE CONCERNED WITH OUTSTANDING CLAIMS AGAINST ITS CONTRACTORS, AND IS ONLY OBLIGED TO MAKE PAYMENTS WHERE PRIVITY OF CONTRACT EXISTS. ACCORDINGLY, THE ENTIRE CONTRACT BALANCE SHOULD BE PAID TO MR. BROWN.

TO MR. GEORGE D. BREITMEIER:

REFERENCE IS MADE TO YOUR LETTER OF OCTOBER 27, 1971, WITH ENCLOSURES, REQUESTING A DECISION AS TO THE DISPOSITION TO BE MADE OF THE AMOUNT DUE UNDER FIRE EQUIPMENT RENTAL AGREEMENT NO. 1 DATED AUGUST 30, 1970, BETWEEN MR. ELLSWORTH D. BROWN AND THE FOREST SERVICE.

THE RECORD SHOWS THAT MR. ELLSWORTH D. BROWN EXECUTED AS VENDOR THE FIRE EQUIPMENT-RENTAL AGREEMENT COVERING THE USE OF A 1961 GMC ONE-TON TRUCK OWNED BY MR. NORVAL MORGAN WITH MR. BROWN AND HIS SON-IN-LAW, MR. CYRIL DAHL, AS OPERATORS ON THE 1970 BURNS CREEK SUMMER FIRE IN WENATCHEE NATIONAL FOREST. MESSRS. BROWN AND DAHL INSTALLED A 500 GALLON PUMPER ON THE TRUCK AND OPERATED IT FOR A FEW DAYS FOR FIRE SUPPRESSION WORK AND THEN SUBSTITUTED ANOTHER TRUCK BECAUSE MR. BROWN STATED THAT HE HAD DIFFICULTY IN USING MR. MORGAN'S TRUCK TO HAUL THE HEAVY LOADS OF WATER OVER STEEP TERRAIN. MR. MORGAN'S VEHICLE WAS USED FROM AUGUST 30, 1970, TO SEPTEMBER 2, 1970, AND THE SECOND VEHICLE WAS USED FROM SEPTEMBER 3, 1970, TO SEPTEMBER 5, 1970. WE UNDERSTAND THAT THE FOREST SERVICE TIMEKEEPER NOTED THE SUBSTITUTION OF TRUCKS ON THE FIRE EQUIPMENT USE INVOICE.

DURING THE RENTAL PERIOD, MR. MORGAN TELEPHONED THE OFFICE OF THE FOREST SUPERVISOR, WENATCHEE NATIONAL FOREST, AND REQUESTED THAT PAYMENT FOR THE RENTAL OF THE TRUCK BE MADE DIRECTLY TO HIM. AN INQUIRY TO THE STATE OF IDAHO MOTOR VEHICLE DEPARTMENT REVEALED THAT THE FIRST TRUCK USED BY MR. BROWN ACTUALLY BELONGED TO MR. MORGAN. A CHECK FOR $1,568 WAS ISSUED TO MESSRS. BROWN AND MORGAN, JOINTLY, AND MAILED TO MR. MORGAN. MESSRS. BROWN AND DAHL WERE UNABLE TO AGREE WITH MR. MORGAN AS TO THE PROPER DIVISION OF THE PROCEEDS OF THE CHECK. MR. MORGAN RETURNED THE CHECK WHICH HAS BEEN RETURNED TO THE TREASURY DISBURSING OFFICER.

IN VIEW OF THE FOREGOING, YOU REQUEST ANSWERS TO THE FOLLOWING THREE QUESTIONS AS GUIDANCE IN THIS AND SIMILAR CASES WHICH MAY OCCUR IN THE FUTURE:

"1. ARE WE OBLIGATED TO PAY THE ENTIRE AMOUNT INVOLVED HERE TO BROWN WHO SIGNED UP THE TRUCK WITH THE FOREST SERVICE, REPRESENTING IT TO BE HIS TO RENT?

"2. WHEN MORGAN ADVISED THE FOREST SERVICE THAT THE TRUCK WAS HIS, AND THAT HE WAS ENTITLED TO SOME OF THE RENTAL PAYMENTS, DID WE HAVE AN OBLIGATION TO HIM TO PAY A SHARE OF THE RENTAL MONEY TO HIM?

"3. HOW SHOULD WE DIVIDE THE $1,568.00 ADMITTEDLY OWED TO MORGAN, BROWN AND DAHL WHEN THE PARTIES CANNOT AGREE ON THE SHARE EACH IS ENTITLED TO? SHOULD WE SIMPLY WAIT FOR FURTHER ACTION BY THE CLAIMANTS AND ADVISE THEM THAT WE WILL NOT PAY ANYTHING TO ANYONE WITHOUT AN AGREEMENT BETWEEN THE THREE PARTIES OR A COURT JUDGMENT SHOWING THE SHARE OF EACH CLAIMANT?"

IT IS A WELL-SETTLED RULE THAT WHEN A GOVERNMENT CONTRACTOR COMPLETES ANY WORK UNDER AND IN ACCORDANCE WITH HIS CONTRACT, HE IS ENTITLED TO BE PAID THEREFOR THE AMOUNT DUE FROM THE GOVERNMENT UNDER THE CONTRACT REGARDLESS OF THE FACT THAT THERE MAY BE OUTSTANDING UNPAID CLAIMS AGAINST THE CONTRACTOR BY OTHER PERSONS RELATIVE TO THE WORK. 10 COMP. GEN. 433 (1931) AND 23 ID. 655 (1944). FURTHER, THE SETTLEMENT OF OBLIGATIONS BETWEEN GOVERNMENT CONTRACTORS AND PERSONS FURNISHING EQUIPMENTS FOR THE PERFORMANCE OF THE CONTRACTS IS A MATTER OUTSIDE THE JURISDICTION OF THE GOVERNMENT, SINCE THERE IS NO PRIVITY OF CONTRACT BETWEEN SUCH PERSONS AND THE UNITED STATES. SEE KELLOGG V UNITED STATES, 7 WALL. 361 (1868); UNITED STATES V DRISCOLL, 96 U.S. 421 (1877); H. HARFURTH, JR., INC. V UNITED STATES, 89 CT. CL. 122 (1939); JOSEPH PETRIN ET. AL. V UNITED STATES, 90 CT. CL. 670 (1940); WARRIOR CONSTRUCTORS V BANDERS, INC., 387 F. 2D 727 (1967); UNITED STATES V CLEVELAND ELECTRIC COMPANY OF SOUTH CAROLINA, 373 F. 2D 585 (1967).

ACCORDINGLY, WITH RESPECT TO THE FIRST QUESTION, THE ENTIRE CONTRACT BALANCE SHOULD BE PAID TO MR. BROWN. AS TO THE SECOND QUESTION, THE CLAIM OF MR. MORGAN SHOULD HAVE BEEN DISALLOWED BECAUSE OF THE ABSENCE OF PRIVITY OF CONTRACT BETWEEN HIM AND THE GOVERNMENT. IN VIEW OF THE ANSWERS TO THE FIRST TWO QUESTIONS, NO ANSWER TO THE THIRD QUESTION IS REQUIRED.