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B-138648, JUL. 24, 1959

B-138648 Jul 24, 1959
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TO SUNROC CORPORATION: FURTHER REFERENCE IS MADE TO YOUR LETTER DATED JANUARY 28. WHICH DISALLOWED YOUR CLAIM FOR $455.01 REPRESENTING DISCOUNT ALLEGED TO HAVE BEEN IMPROPERLY DEDUCTED UNDER GENERAL SERVICES ADMINISTRATION CONTRACTS NOS. 20 CALENDAR DAYS WAS ALLOWED UNDER BOTH CONTRACTS. GS-00S 19522 WERE WITHHELD PENDING CERTAIN CORRECTIONS NECESSARY TO BE MADE ON THE ASSIGNMENTS. PAYMENTS WERE MADE ON THE INVOICES LESS THE DISCOUNT OF $455.01 TO THE CHICAGO NATIONAL BANK ON OCTOBER 29. WHICH WAS THE DAY FOLLOWING THE DATE THE ASSIGNMENT PAPERS WERE ACCEPTED AS CORRECT BY THE GENERAL SERVICES ADMINISTRATION. THIS RESULTED IN YOUR CLAIM FOR THE ALLEGED UNACCRUED DISCOUNT THAT WAS TAKEN. WAS RECEIVED SETTING FORTH ADDITIONAL FACTS IN THE MATTER.

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B-138648, JUL. 24, 1959

TO SUNROC CORPORATION:

FURTHER REFERENCE IS MADE TO YOUR LETTER DATED JANUARY 28, 1959, REGARDING OUR SETTLEMENT OF JANUARY 21, 1959, WHICH DISALLOWED YOUR CLAIM FOR $455.01 REPRESENTING DISCOUNT ALLEGED TO HAVE BEEN IMPROPERLY DEDUCTED UNDER GENERAL SERVICES ADMINISTRATION CONTRACTS NOS. GS-00S 19521 AND GS- 00S-19522 DATED SEPTEMBER 2, 1958.

UNDER THE CONTRACTS YOU AGREED TO FURNISH TO THE GENERAL SERVICES ADMINISTRATION, FEDERAL SUPPLY SERVICE, NATIONAL BUYING DIVISION, CERTAIN QUANTITIES OF ELECTRIC WATER COOLERS FOR A TOTAL PRICE OF $30,273.08 FOR EACH CONTRACT. A PROMPT PAYMENT DISCOUNT OF 10 PERCENT, 20 CALENDAR DAYS WAS ALLOWED UNDER BOTH CONTRACTS. AFTER RECEIPT OF A NUMBER OF THE PURCHASE ORDERS UNDER THE CONTRACTS IT APPEARS THAT YOU EXECUTED CERTAIN ASSIGNMENT PAPERS ON OR ABOUT SEPTEMBER 11, 1958, NAMING THE CHICAGO NATIONAL BANK AS ASSIGNEE UNDER THE SAID ORDERS. PAYMENTS OF INVOICES NOS. HO-222 AND HO-224 UNDER CONTRACT NO. GS-00S 19521 AND INVOICES NOS. HO-223 AND HO-225 UNDER CONTRACT NO. GS-00S 19522 WERE WITHHELD PENDING CERTAIN CORRECTIONS NECESSARY TO BE MADE ON THE ASSIGNMENTS. PAYMENTS WERE MADE ON THE INVOICES LESS THE DISCOUNT OF $455.01 TO THE CHICAGO NATIONAL BANK ON OCTOBER 29, 1958, WHICH WAS THE DAY FOLLOWING THE DATE THE ASSIGNMENT PAPERS WERE ACCEPTED AS CORRECT BY THE GENERAL SERVICES ADMINISTRATION. THIS RESULTED IN YOUR CLAIM FOR THE ALLEGED UNACCRUED DISCOUNT THAT WAS TAKEN.

FOLLOWING A CONFERENCE OF YOUR MR. MORRISON WITH REPRESENTATIVES OF OUR OFFICE YOUR LETTER DATED APRIL 8, 1959, WAS RECEIVED SETTING FORTH ADDITIONAL FACTS IN THE MATTER. A REPORT WAS REQUESTED FROM THE GENERAL SERVICES ADMINISTRATION WITH RESPECT TO THE CONTENTS OF YOUR LETTER AND THE REPORT NOW HAS BEEN RECEIVED. BY LETTER DATED MAY 27, 1959, THE GENERAL SERVICES ADMINISTRATION ALSO FORWARDED TO OUR OFFICE FOR SETTLEMENT YOUR CLAIM IN THE TOTAL AMOUNT OF $1,458.37 FOR DISCOUNTS ALSO ALLEGEDLY IMPROPERLY TAKEN IN THE PAYMENT OF INVOICES NO.S HO-216 AND HO- 220 UNDER CONTRACT NO. GS-00S-19521 AND INVOICES NO.S HO-217 AND HO-221 UNDER CONTRACT NO. GS-00S-19522. THIS ADDITIONAL CLAIM WAS THE SUBJECT OF YOUR LETTER OF APRIL 2, 1959, TO THE GENERAL SERVICES ADMINISTRATION--- COPY TO OUR OFFICE--- AND APPEARS TO INVOLVE CIRCUMSTANCES IDENTICAL TO THOSE ATTENDING YOUR CLAIM FOR $455.01. THEREFORE, BOTH CLAIMS WILL BE HERE CONSIDERED.

FROM YOUR CORRESPONDENCE OF RECORD AS WELL AS THE INFORMATION INFORMALLY FURNISHED BY MR. MORRISON YOUR POSITION IN THE MATTER APPEARS TO BE THAT THE ASSIGNMENT PAPERS WERE PROPERLY PREPARED FROM THE INFORMATION AVAILABLE TO YOU AT THE TIME YOU EXECUTED THE ASSIGNMENTS AND, THEREFORE, ANY CORRECTIONS OR ADJUSTMENTS WHICH LATER BECAME NECESSARY ON THE ASSIGNMENT PAPERS WERE CAUSED BY ERRORS MADE, OR CHANGES DESIRED, BY THE GENERAL SERVICES ADMINISTRATION IN THE CONTRACT TERMS. THIS BEING THE CASE YOU CONTEND THAT THE DISCOUNT ONLY COULD HAVE BEEN PROPERLY EARNED BY THE PAYMENT OF THE SUBJECT INVOICES WITHIN 20 DAYS AFTER RECEIPT THEREOF.

ARTICLE 8A OF THE GENERAL PROVISIONS OF STANDARD FORM 32, OCTOBER 1957 EDITION, WAS INCORPORATED IN AND MADE A PART OF CONTRACTS NOS. GS 00S- 19521 AND GS-00S-19522. THE ARTICLE IS APPLICABLE TO THIS TYPE OF DEFINITE QUANTITY CONTRACT IN EXCESS OF $1,000 AND EXPRESSLY PROVIDES, IN EFFECT, THAT CLAIMS FOR MONEYS DUE THE CONTRACTOR MAY BE ASSIGNED BUT THAT SUCH ASSIGNMENT SHALL COVER ALL AMOUNTS PAYABLE. IN YOUR LETTER OF APRIL 2, 1959, TO THE GENERAL SERVICES ADMINISTRATION YOU STATED: "ON SEPTEMBER 11, 1958 WE ASSIGNED YOUR PURCHASE ORDERS, WHICH WERE DATED SEPTEMBER 4, 1958 TO THE CHICAGO NATIONAL BANK AS YOUR CONTRACTS WERE NOT ON HAND AT THAT TIME. THE FORMAL CONTRACTS WERE NOT RECEIVED FROM YOU UNTIL SEPTEMBER 22, 1958.' ON THE BASIS OF THIS STATEMENT AND OTHER INDICATIONS IN THE RECORD THERE CAN BE LITTLE, IF ANY, DOUBT THAT YOU FIRST ATTEMPTED TO ASSIGN THE MONEYS DUE UNDER INDIVIDUAL PURCHASE ORDERS ISSUED UNDER THE CONTRACTS--- PERMITTED ONLY ON INDEFINITE QUANTITY CONTRACTS UNDER ARTICLE 16 OF THE SUPPLEMENTAL PROVISIONS, GSA FORM 1424, NOVEMBER 1957 EDITION--- RATHER THAN TO ASSIGN ALL THE MONEYS DUE OR TO BECOME DUE UNDER THE CONTRACTS AS A WHOLE AS CONTEMPLATED BY ARTICLE 8A. WHILE THE CONTRACTS LATER WERE ASSIGNED AND ULTIMATELY ACCEPTED BY THE GENERAL SERVICES ADMINISTRATION AS BEING IN PROPER FORM, THE RECORD BEFORE US APPEARS TO SUBSTANTIATE OUR BELIEF THAT THE DELAY IN PERFECTING THE ASSIGNMENT PAPERS WAS LARGELY, IF NOT WHOLLY, ATTRIBUTABLE TO THE ATTEMPTED ASSIGNMENT BY YOU OF THE MONEYS DUE UNDER THE PURCHASE ORDERS INDIVIDUALLY. THIS CONCLUSION APPEARS CONFIRMED BY THE GENERAL SERVICES ADMINISTRATION LETTER OF OCTOBER 14, 1958, TO THE CHICAGO NATIONAL BANK WHEREIN IT WAS STATED THAT "AN ASSIGNMENT MUST COVER ALL MONEYS DUE OR TO BECOME DUE, AND THAT TRANSFER OF A PORTION OF MONEY DUE ONE CONTRACT CANNOT BE TRANSFERRED TO ANOTHER CONTRACT.' IN THAT LETTER IT WAS THEREFORE REQUESTED THAT THE INSTRUMENTS OF ASSIGNMENTS BE REVISED TO REFLECT THE REFERRED-TO CORRECT TOTAL CONTRACT PRICES.

IN VIEW OF THE FOREGOING, AND SINCE PAYMENTS ON ALL OF THE INVOICES WITH WHICH WE ARE HERE CONCERNED APPEAR TO HAVE BEEN MADE WITHIN THE 20-DAY ALLOWABLE DISCOUNT PERIOD AFTER THE INSTRUMENTS OF ASSIGNMENTS WERE PERFECTED AND ACCEPTED BY THE GENERAL SERVICES ADMINISTRATION, IT ONLY REASONABLY MAY BE CONCLUDED THAT THE DISCOUNT TAKEN WAS PROPERLY EARNED.

ACCORDINGLY, THE SETTLEMENT OF JANUARY 21, 1959, IS SUSTAINED. ALSO, YOUR INITIAL CLAIM FOR THE ADDITIONAL AMOUNT OF $1,458.37 IS DISALLOWED FOR LIKE REASONS.

NO REPORT TO DATE HAS BEEN RECEIVED FROM THE GENERAL SERVICES ADMINISTRATION WITH RESPECT TO THE AMOUNTS OF $583.35 AND $991.70 ALSO CLAIMED IN YOUR LETTER OF APRIL 2, 1959, TO THE GENERAL SERVICES ADMINISTRATION UNDER INVOICES NOS. HO-215 AND HO-227, RESPECTIVELY. UPON RECEIPT OF THEIR REPORT REGARDING THESE ITEMS WE WILL ADVISE YOU OF OUR CONCLUSIONS THEREON.

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