B-127014, MAR. 13, 1956

B-127014, MAR. 13, 1956

TO VOGUE EMBROIDERY, INC.:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF NOVEMBER 9, 1955, REQUESTING REVIEW OF YOUR INDEBTEDNESS TO THE UNITED STATES IN THE AMOUNT OF $2,306.63, AS STATED IN OUR CLAIMS DIVISION LETTER DATED JULY 14, 1955, TO YOU.

THE INDEBTEDNESS AROSE IN CONNECTION WITH THE SEVERAL CONTRACTS YOU ENTERED INTO WITH THE DEPARTMENT OF THE NAVY DURING THE PERIOD FROM MARCH 24, 1950, THROUGH JANUARY 30, 1953, UNDER WHICH YOU AGREED TO DELIVER VARIOUS SLEEVE MARKINGS MANUFACTURED FROM GOVERNMENT-FURNISHED MATERIAL. THE ENTIRE INDEBTEDNESS IS REFLECTED IN THE STATEMENT OF ACCOUNT ATTACHED AS AN ENCLOSURE WITH OUR CLAIMS DIVISION LETTER OF APRIL 7, 1955, TO YOU, THE SEPARATE ITEMS SHOWN THEREIN IN THE AGGREGATE AMOUNTS OF $167.91 AND $2,138.72, RESPECTIVELY, REPRESENTING UNPAID INVOICES AND CHARGES DUE FOR MATERIAL OVER-RELEASED AND NOT RETURNED. AGAINST SUCH INDEBTEDNESS THERE HAS BEEN APPLIED THE AMOUNT OF $1,041.75 FROM FUNDS OTHERWISE DUE YOU THUS LEAVING AN UNLIQUIDATED BALANCE OF $1,264.88. THE RECORD SHOWS THAT THE VOUCHER FOR $299.70, MENTIONED IN YOUR LETTER WAS RETURNED TO THE U.S. NAVAL SUPPLY FACILITY, BROOKLYN, NEW YORK, AS A DUPLICATE BILLING.

IN YOUR LETTER OF NOVEMBER 9, 1955, IN ADDITION TO PROTESTING THE WITHHOLDING OF THE AMOUNT OF $1,041.75, YOU STRESS YOUR PRIOR CONTENTIONS THAT THERE WERE NO EXCESSIVE MATERIALS SINCE EVERY ITEM THAT COULD POSSIBLY BE MANUFACTURED FROM MATERIALS RECEIVED WAS DELIVERED PURSUANT TO THE CONTRACT TERMS OR OTHERWISE ACCOUNTED FOR IN YOUR REPORTS. YOU EXPRESS THE BELIEF THAT THE ADMINISTRATIVE OFFICIALS ARE RESPONSIBLE FOR SOME ERROR IN ACCOUNTING FOR THE CONTRACT MATERIALS IN QUESTION AND THAT YOU ARE IN A POSITION TO SUPPORT YOUR POSITION EITHER AT A HEARING OR BEFORE THE COURT OF CLAIMS. WHILE THERE IS NO OBJECTION TO YOUR CALLING AT OUR OFFICE AT ANY TIME DURING THE REGULAR WORKING HOURS FOR THE PURPOSE OF DISCUSSING ANY DISPUTED MATTER OF YOUR CLAIM, WITH THE UNDERSTANDING THAT THE SUBSTANCE OF ANY MATTER PRESENTED ORALLY WILL BE REDUCED BY YOU TO WRITING, IT APPEARS THAT THE CURRENT FILE CONTAINS SUFFICIENT EVIDENCE TO SUPPORT A PROPER INTERPRETATION OF THE DISPUTED CONTRACT ACCOUNTS.

WITH RESPECT TO STATEMENTS CONTAINED IN YOUR LETTER OF NOVEMBER 9, 1955, PARTICULARLY YOUR REFERENCE TO THE INVOICE FOR $402.72, THE RECORD SHOWS THE CORRECT AMOUNT OF THIS INVOICE (NO. 12313-0, ISSUED MARCH 13, 1951) TO BE $402.82 AND THAT YOU WERE ADVISED IN ADMINISTRATIVE LETTER DATED SEPTEMBER 16, 1952, THAT THAT INVOICE WOULD BE CANCELED. ALSO, THAT SAME LETTER ADVISED YOU REGARDING THE CHARGES FOR OTHER MATERIAL OVER-RELEASED AND NOT RETURNED, AMOUNTING TO $2,138.72. THE DETAILS OF THE BALANCE OF THE CHARGES FOR USE OF EXCESS MATERIAL, OR $167.91, WERE SET OUT IN A LETTER OF MARCH 10, 1954, TO YOU FROM THE CONTRACTING OFFICER. YOU REFER TO THESE ACTIONS AS ,ANOTHER ODDITY IN YOUR CLAIM.' FROM AN EXAMINATION OF THE STATEMENT OF ACCOUNT ATTACHED TO OUR CLAIMS DIVISION LETTER DATED APRIL 7, 1955, TO YOU, IT WILL BE OBSERVED THAT THE ITEMIZATIONS RESULTING IN THE CHARGES OF $167.91 AND $2,138.72, OR OF $402.82, AS WELL AS IDENTIFYING THE SEVERAL INDIVIDUAL CONTRACTS UNDER WHICH ALL THE SEPARATE CHARGE ITEMS ORIGINATE. THERE APPEARS NO CONFUSION IN THE ADMINISTRATIVE REPORTS SUPPORTING YOUR INDEBTEDNESS OF $2,306.63. AS YOU WERE PREVIOUSLY ADVISED, IN DISPUTED MATTERS OF THIS NATURE IT IS THE ESTABLISHED POLICY OF OUR OFFICE TO ACCEPT AS CORRECT THE REPORT OF THE ADMINISTRATIVE OFFICIALS IN THE ABSENCE OF BAD FAITH OR A CLEAR SHOWING OF MISTAKE.

WITH RESPECT TO THE AUTHORITY OF OUR OFFICE TO APPLY BY WAY OF SETOFF OF ONE INDEBTEDNESS AGAINST ANOTHER, YOUR ATTENTION IS INVITED TO THE CASE OF UNITED STATES V. MUNSEY TRUST CO., 332 U.S. 234, 239 240, WHEREIN THE SUPREME COURT STATED:

"* * * THE GOVERNMENT HAS THE SAME RIGHT "WHICH BELONGS TO EVERY CREDITOR, TO APPLY THE UNAPPROPRIATED MONEYS OF HIS DEBTOR, IN HIS HANDS, IN EXTINGUISHMENT OF THE DEBTS DUE TO HIM.' GATIOT V. UNITED STATES, 15 PET. 336, 370; MCKNIGHT V. UNITED STATES, 98 U.S. 179, 186. MORE THAN THAT, FEDERAL STATUTE GIVES JURISDICTION TO THE COURT OF CLAIMS TO HEAR AND DETERMINE "ALL SET-OFFS, COUNTERCLAIMS, CLAIMS FOR DAMAGES, WHETHER LIQUIDATED OR UNLIQUIDATED, OR OTHER DEMANDS WHATSOEVER ON THE PART OF THE GOVERNMENT OF THE UNITED STATES AGAINST ANY CLAIMANT AGAINST THE GOVERNMENT IN SAID COURT....' JUDICIAL CODE SEC. 145, 28 U.S.C. SEC. 250/2). THIS POWER GIVEN TO THE COURT OF CLAIMS TO STRIKE A BALANCE BETWEEN THE DEBITS AND CREDITS OF THE GOVERNMENT, BY LOGICAL IMPLICATION GIVES POWER TO THE COMPTROLLER GENERAL TO DO THE SAME, SUBJECT TO REVIEW BY THAT COURT. * * *"

ACCORDINGLY, FOR THE REASONS STATED ABOVE AND ON THE PRESENT RECORD, THE ACTION TAKEN IN OUR CLAIMS DIVISION LETTER OF JULY 14, 1955, IS SUSTAINED. YOUR FAILURE TO PROMPTLY LIQUIDATE THE BALANCE OF YOUR INDEBTEDNESS IN THE AMOUNT OF $1,264.88, WILL NECESSITATE FORWARDING THE MATTER TO THE DEPARTMENT OF JUSTICE FOR APPROPRIATE COLLECTION ACTION.