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B-175141 1 (1972-06-14)

handle is hein.gao/gaobaagjt0001 and id is 1 raw text is: COMP TROLLER GENERAL OF THE UNI WASHINGTON, D.C. 20548 - B-i75141 J;J N II!IIl lIIll llIf 1111 tlN 1 4 1972 LM096533 Dbear Mr. Henderson: As requested in your letter of February 1, 1972, we have examined the contract award procedures and the financil a capability review for a contract awarded by the Air Force to Piston Ring and Parts Company of , Georgia, Inc., for operation of an automotive parts store at Seymour Johnson Air Force Base, North Carolina. Although we found that the contract had been awarded to the lowest bidder in accordance with normal contract award procedures, we believe there were weaknesses in determining the company's financial capability. The contract provided for furnishing Seymour Johnson Air Force Base with commercial parts and accessories for motor vehicles and other equip- ment on an as-required basis. The contract, awarded March 17, 1971, was to have been in effect through February 29, 1972. The Government estimated that purchases would be approximately $127,500 during the contract period and that the contractor would bill the Government at the end of each month for parts actually delivered. The contractor was to establish and operate a motor vehicle parts store in Government-provided on-base facilities for exclusive sale to au- thorized representatives of the Government. Air Force regulations state that contractor-operated motor vehicle parts stores (COPARS) function as part of the overall supply system to provide the majority of repair parts and accessories support required for automotive maintenance. Piston Ring and Parts Company of Georgia, Inc., Atlanta, Georgia, began business in January 1968. The corporation was formed by three indi- viduals: James T. Ferguson, William A. Shope, and E. C. Howell. The cor- poration purchased certain assets from Piston Ring and Parts Company and continued the business at the same location. The corporation's opening balance sheet showed $20,000 in cash, $70,000 in inventory, $50,000 in equipment, $110,000 in notes payable, and $30,000 in capital stock. Piston Ring was awarded COPARS contracts at 11 Air Force bases throughout the United States during 1971. The contractor estimated that first-year sales under these contracts would be in excess of $1.3 million. For the 9 months the contract at Seymour Johnson was in effect, the con- tractor received $91,570. Payments were made to the factoring department of a bank, to which the contractor's Government accounts receivable had been assigned. Piston Ring abandoned the COPARS operation at Seymour Johnson on December 17, 1971. The base contracting officer terminated the contract for default 4 days later. On January 13, 1972, an involuntary petition in bankruptcy was filed against Piston Ring in the U.S. District Court of j L~i FO 53?

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