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B-190180 1 (1978-06-22)

handle is hein.gao/gaobadgdr0001 and id is 1 raw text is: VMH COMPT1ILLmN GENERAL CECIBION OW THE UNITE STArUS WASHINGTON. D. C. 90148 FILE: B-190180 DATE: June 22, 1976 MATTER OF: Department of th2 'Ary, Corps of Engineers Request for Advance Decision DIGEST: As between Small Business Administration (SBA) and Corps of Engineers (agent for the U.S. Postal Service), Corps is entitled to proceeds of property which is the product of section 8(a) subcontractors' contract. By agreeing that title to such property would vest in the Corps upon the Corps making pro- gress payments to the 8(a) subcontractor, SEA waived security interest in the property. The Department of the Army, Corps of Engineers (Corps), Smell Bisiness Administration (SBA), and United States Postal Service (USPS) have submitted the question of whether the SBA or the Corps and -(SPS are entitled to the proceeds of the sale of the personal property of the Nartrans Manufacturing Company (Nartrans). Briefly, USPS asked the Ccrps to purchase mech- anization equipment, consisting of metal containers and tow bars, for Bulk Mail Centers. On February 6, 1974, the Corps awarded a contract (DACW87-74-C-9007) for the equipment to the SBA under the provisions of Section 8(a) of the Small Business .c (16 U.S.C. 637(a)(2) (1970)). SBA then awarded a subcontract (SBA 9108(e)74- C-170) to Nartrais on March 11, 1974 for $1,661,764.14. At this time SBA had outstanding loans to Nartrans of $338,000.00. In the approximately one year period be- tween the date of award and the Government's termina- tion of Nartrans contract for default, the Corps paid ptogress payments, beginning June 12, 1974, in the amount of $823,725.00 and the SBA advanced an addi- tional 4450,000 effective August 9, 1974. By the con- tract completion date, Nartrans had constructed and delivered 10 containers valued at $5,269.70. In addition, SBA sold Wartran's inventory on December 8 and 9, 1975 and realized a net of $361,174.24. SBA's position is that it is entitled to retain the proceeds of the forced sale on two grounds: first, ~Lii7 x-I

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