B-141616, FEB. 1, 1960
Highlights
RUSS TODD: FURTHER REFERENCE IS MADE TO YOUR LETTER OF DECEMBER 15. THERE WAS DEDUCTED THE AMOUNT OF $274.70 FROM THE GROSS AMOUNT OF $13. THERE WAS DEDUCTED A DISCOUNT OF $211.60 FROM THE GROSS AMOUNT OF $10. YOU ALLEGE WERE IMPROPERLY TAKEN. "DISCOUNTS WILL BE ALLOWED FOR PROMPT PAYMENT * * * 2 PERCENT 10 CALENDAR DAYS * * * DISCOUNT IS COMPUTED FROM DATE OF RECEIPT OF INVOICE OR FROM DATE OF ACCEPTANCE. WHICHEVER IS THE LATER.'. WHICH WAS INCORPORATED IN. AF 35/608/-418 WAS ACCEPTED AND SIGNED BY YOU. SINCE IT ONLY REASONABLY MAY BE CONCLUDED TO HAVE BEEN LEGALLY PROPER TO DEDUCT THE APPLICABLE DISCOUNT FROM PARTIAL PAYMENTS. THERE APPEARS ONLY THE QUESTION AS TO WHETHER TIMELY PAYMENTS WERE MADE BY THE DEPARTMENT OF THE AIR FORCE ON THE FIRST AND THIRD INVOICES.
B-141616, FEB. 1, 1960
TO MR. RUSS TODD:
FURTHER REFERENCE IS MADE TO YOUR LETTER OF DECEMBER 15, 1959, REQUESTING REVIEW OF OUR SETTLEMENT DATED NOVEMBER 24, 1959, DISALLOWING YOUR CLAIM FOR $490.40 UNDER CONTRACT NO. AF 35/608/-418, DATED MARCH 27, 1958.
THE CLAIM ARISES BY REASON OF THE DEPARTMENT OF THE AIR FORCE DEDUCTING CERTAIN DISCOUNTS FROM PARTIAL PAYMENT VOUCHERS WHICH THE DEPARTMENT FELT HAD BEEN PROPERLY EARNED UNDER THE TERMS OF THE CONTRACT. MORE SPECIFICALLY, IN ACCORDANCE WITH THE APPLICABLE 2 PERCENT, 10 CALENDAR DAY DISCOUNT TERMS, THERE WAS DEDUCTED THE AMOUNT OF $274.70 FROM THE GROSS AMOUNT OF $13,734.81 DUE YOU AS THE FIRST PARTIAL PAYMENT UNDER THE CONTRACT. ALSO, THERE WAS DEDUCTED A DISCOUNT OF $211.60 FROM THE GROSS AMOUNT OF $10,580.13 REPRESENTING THE THIRD PARTIAL PAYMENT. SUCH DISCOUNT DEDUCTIONS TOTALING $486.30 (YOU CLAIM $490.40), YOU ALLEGE WERE IMPROPERLY TAKEN.
IT APPEARS FROM YOUR LETTER THAT YOU CONTEND THAT BY THE TERMS OF THE CONTRACT THE TIME FOR DISCOUNTS INVOLVED IN PARTIAL PAYMENTS SHOULD BE COMPUTED FROM THE DATE OF RECEIPT OF THE INVOICE, AND DISCOUNTS PERTAINING TO THE FINAL PAYMENT FROM THE DATE OF COMPLETION AND ACCEPTANCE. YOU CONTEND THAT OTHERWISE THE GOVERNMENT MAY UNDULY DELAY A PAYMENT ON THE PREMISE OF ACCEPTANCE AND STILL TAKE ADVANTAGE OF THE DISCOUNT.
A RELEVANT PART OF THE BID FORM PROVIDES,"DISCOUNTS WILL BE ALLOWED FOR PROMPT PAYMENT * * * 2 PERCENT 10 CALENDAR DAYS * * * DISCOUNT IS COMPUTED FROM DATE OF RECEIPT OF INVOICE OR FROM DATE OF ACCEPTANCE, WHICHEVER IS THE LATER.' THE BID FORM, WHICH WAS INCORPORATED IN, AND MADE A PART OF CONTRACT NO. AF 35/608/-418 WAS ACCEPTED AND SIGNED BY YOU. SINCE IT ONLY REASONABLY MAY BE CONCLUDED TO HAVE BEEN LEGALLY PROPER TO DEDUCT THE APPLICABLE DISCOUNT FROM PARTIAL PAYMENTS, THERE APPEARS ONLY THE QUESTION AS TO WHETHER TIMELY PAYMENTS WERE MADE BY THE DEPARTMENT OF THE AIR FORCE ON THE FIRST AND THIRD INVOICES, WHICH ARE INVOLVED IN YOUR CLAIM.
THE DEPARTMENT OF THE AIR FORCE REPORTS THAT YOUR INVOICE COVERING THE FIRST PARTIAL PAYMENT WAS RECEIVED AT THE CONTRACTING OFFICE ON MAY 7, 1958. THE RECORD SHOWS THAT THE GOVERNMENT ACCEPTED THE PERCENTAGE OF CONTRACT WORK SATISFACTORILY COMPLETED ON MAY 8, 1958. THEREFORE, SINCE THE INVOICE WAS PAID BY CHECK DATED MAY 13, 1958, WHICH WAS WITHIN TEN DAYS OF THE DATE OF ACCEPTANCE, IT MUST BE CONCLUDED THAT THE DISCOUNT OF $274.70 PROPERLY WAS EARNED AND DEDUCTED. CONSIDERING THE DISCOUNT TERMS SET FORTH ABOVE, THE GOVERNMENT CLEARLY IS ENTITLED TO COMPUTE THE DISCOUNT PERIOD FROM MAY 8, 1958, THE DATE OF THE GOVERNMENT'S ACCEPTANCE OF THE WORK AND THE FACT THAT YOU MIGHT HAVE DELIVERED THE INVOICE IN PERSON TO THE PROCUREMENT OFFICE ON MAY 1, 1958, AS YOU ALLEGE, WOULD NOT ALTER THE SPECIFIC TEN DAY DISCOUNT PERIOD APPLICABLE.
REGARDING THE THIRD PARTIAL PAYMENT, IT APPEARS THAT THE APPLICABLE INVOICE WAS RECEIVED IN THE PROCUREMENT OFFICE ON JULY 7, 1958. THE INVOICE, VOUCHER AND GOVERNMENT CONTRACTING OFFICER'S ACCEPTANCE OF THE WORK THAT WAS SATISFACTORILY PERFORMED UP TO THAT TIME WERE FORWARDED TO THE FINANCIAL SERVICES OFFICE FOR PAYMENT ON JULY 7, 1958. IT WAS FOUND THAT THE AMOUNT INVOICED BY YOU FOR THIS PAYMENT WAS NOT IN AGREEMENT WITH THE AMOUNT SHOWN ON THE RETAINED RECORDS OF THE FINANCIAL SERVICES OFFICE. THEREFORE, YOU WERE REQUESTED TO SUBMIT A CORRECTED INVOICE FOR THIS PAYMENT WHICH YOU REFUSED TO DO. ULTIMATELY, ON JULY 21, 1958, A NEW VOUCHER WAS PREPARED BY THE PROCUREMENT OFFICE BASED ON THE RETAINED RECORDS OF THE FINANCIAL SERVICES OFFICE AND FORWARDED TO THE FINANCE OFFICER FOR PAYMENT. PAYMENT WAS MADE TO YOU ON THAT BASIS BY CHECK DATED JULY 24, 1958, LESS THE DISCOUNT OF $211.60. SINCE IT APPEARS THAT THE DEPARTMENT OF THE AIR FORCE COULD HAVE MADE SUCH PROPER ADJUSTMENTS, WHICH LATER WERE MADE, ON THE INVOICE FURNISHED BY YOU FOR THIS PAYMENT WITHIN TEN DAYS OF THE RECEIPT OF THE INVOICE OR FROM THE DATE OF ACCEPTANCE OF THE WORK, WHICHEVER WAS THE LATER, WITHOUT DETRIMENT TO THE GOVERNMENT, INSTRUCTIONS ARE TODAY BEING ISSUED TO OUR CLAIMS DIVISION TO ALLOW THIS PART OF YOUR CLAIM IN THE AMOUNT OF $211.60, IF OTHERWISE CORRECT.
ACCORDINGLY, EXCEPT FOR THE AMOUNT FOUND DUE ABOVE THE SETTLEMENT DATED NOVEMBER 24, 1959, IS SUSTAINED.