B-142108, JUN. 15, 1960

B-142108, JUN. 15, 1960

TO MR. OVE WESTERGAARD:

REFERENCE IS MADE TO YOUR LETTER DATED MAY 19, 1960, PROTESTING OUR DECISION OF MAY 2, 1960, WHICH SUSTAINED THE DISALLOWANCE OF YOUR CLAIM FOR INTEREST, IN THE TOTAL AMOUNT OF $5,247.69, ALLEGED TO BE DUE BY THE UNITED STATES BECAUSE PAYMENT OF THE AMOUNTS DUE YOU FOR AMMUNITION SHELLS FURNISHED UNDER CONTRACTS NOS. DA-91-557-EUC-258 AND DA-91-557-EUC-379, DATED JUNE 26, 1953, AND JUNE 22, 1954, WAS NOT MADE PROMPTLY, OR WITHIN 10 DAYS, FOLLOWING THE SHIPMENT OF THE SHELLS.

IN YOUR LETTER, YOU STATE THAT OUR DECISION IS "COMPLETELY AGAINST THE FACTS, STATED AT THE ,COURT" IN HEIDELBERG, GERMANY.' THE COURT TO WHICH YOU REFER APPARENTLY IS THE U.S. ARMY BOARD OF CONTRACT APPEALS, HEIDELBERG, GERMANY, WHICH BY DECISION USAREUR BCA NO. 75, DATED OCTOBER 27, 1958, DISMISSED YOUR APPEAL FROM THE DECISION OF THE CONTRACTING OFFICER DENYING THE PRESENT CLAIM. YOU CONTEND THAT IT WAS "PROVED" AT THE HEARING HELD BY THE BOARD THAT REPRESENTATIVES OF THE CONTRACTING AGENCY, INCLUDING A HIGH RANKING OFFICER IN THE U.S. ARMY, VERBALLY HAD PROMISED YOU THAT PAYMENT FOR THE AMMUNITION SHELLS WOULD BE MADE WITHIN 10 DAYS FROM DATE OF SHIPMENT.

THAT PART OF THE DECISION RENDERED BY THE U.S. ARMY BOARD OF CONTRACT APPEALS PERTINENT TO YOUR CONTENTIONS IN THE PREMISES IS AS FOLLOWS:

"AT THE HEARING HELD ON 17 APRIL 1958, APPELLANT INTRODUCED EVIDENCE TO THE EFFECT THAT ON 23 AND 24 JUNE 1953, PRIOR TO SIGNING THE CONTRACT, HE DISCUSSED THE PAYMENT PROVISIONS OF THE CONTRACT WITH A MRS. MARY NELSON, LEGAL ADVISER AT THE ORDNANCE PROCUREMENT CENTER, AND SHE EXPLAINED THAT UNDER THE PROVISIONS OF THE CONTRACT, PAYMENT FOR ITEMS DELIVERED WAS DUE AS SOON AS THE RECEIVING OFFICER SIGNED THE RECEIVING DOCUMENT. HE ALSO DISCUSSED INTEREST WITH HER. THE RATE OF INTEREST USED IN COMPUTING HIS CLAIM WAS THE SAME RATE HE WAS PAYING AT THE BANK. AT THE END OF JUNE 1955 HE DISCUSSED THE LATE PAYMENTS WITH COLONEL GIBSON, CHIEF OF THE ORDNANCE PROCUREMENT CENTER, AT THE COPENHAGEN SUB-OFFICE, IN THE PRESENCE OF LTS. FRAY AND KELLY. IT WAS AGREED THAT 10 DAYS WOULD BE A REASONABLE TIME IN WHICH TO EFFECT PAYMENT. APPELLANT'S CLAIM WAS BASED UPON ONLY THE PAYMENTS WHICH WERE NOT PAID WITHIN THE 10-DAY PERIOD AGREED UPON AT THAT MEETING. THE GOVERNMENT OFFERED NO EVIDENCE REGARDING THESE STATEMENTS BY APPELLANT.

"* * * IN THE INSTANT CASE, APPELLANT CONTENDS THAT MRS. NELSON EXPLAINED TO HIM THAT PAYMENTS WERE DUE IMMEDIATELY UPON SIGNING OF THE RECEIVING REPORT AND THAT BY INFERENCE HE UNDERSTOOD HE WOULD BE ENTITLED TO INTEREST ON DELAYED PAYMENTS. THIS CONVERSATION, HOWEVER, OCCURRED PRIOR TO EXECUTION OF THE CONTRACT AND NO PROVISION FOR PAYMENT OF INTEREST WAS INCLUDED IN THE CONTRACT AS EXECUTED. NO ALLEGATION OF MISTAKE IS OFFERED BY EITHER PARTY SO IT MUST BE PRESUMED THERE WAS NONE. IN THE ABSENCE OF AMBIGUITY, THE CONTRACT, AS SIGNED "MERGED ALL PREVIOUS NEGOTIATION, AND IS PRESUMED, IN LAW, TO EXPRESS THE FINAL UNDERSTANDING OF THE PARTIES' (BRAWLEY V. U.S. - 24 LAW ED. 622). APPELLANT FURTHER RELIES UPON THE ALLEGED CONVERSATION WITH COLONEL GIBSON. AT NO TIME HAS APPELLANT CONTENDED THAT COLONEL GIBSON AGREED TO THE PAYMENT OF INTEREST ON DELAYED PAYMENTS, SO WE PRESUME HE DID NOT, FURTHER THIS ALLEGED AGREEMENT WAS NEVER REDUCED TO WRITING OR INCORPORATED INTO THE CONTRACT. WE, THEREFORE, HOLD THAT THE CONTRACT DID NOT PROVIDE FOR THE PAYMENT OF INTEREST. * * *"

THE FACT THAT MRS. NELSON MAY HAVE ADVISED YOU THAT UNDER THE PROVISIONS OF CONTRACT DA-91-557-EUC-258 (UNDER WHICH $4,540.07 OF THE SUM ALLEGED TO BE DUE FOR INTEREST IS CLAIMED) PAYMENT FOR ITEMS DELIVERED WAS DUE AS SOON AS THE RECEIVING OFFICER SIGNED THE RECEIVING DOCUMENT WOULD NOT CREATE ANY LEGAL RESPONSIBILITY UPON THE UNITED STATES TO PAY INTEREST ON AMOUNTS DUE UNDER THE CONTRACT WHICH WERE NOT PAID AT SUCH TIME, OR WITHIN WHAT MIGHT BE CONSIDERED A REASONABLE TIME. NEITHER WOULD THE FACT THAT YOU MAY HAVE REACHED AN UNDERSTANDING WITH COLONEL GIBSON AT THE END OF JUNE 1955 THAT PAYMENT FOR SHELLS THEREAFTER TO BE FURNISHED UNDER THE CONTRACTS WOULD BE MADE WITHIN 10 DAYS FOLLOWING DELIVERY AND ACCEPTANCE OF THE VARIOUS SHIPMENTS, AS CONSTITUTING A REASONABLE TIME THEREFOR, HAVE THE EFFECT OF LEGALLY OBLIGATING THE UNITED STATES TO PAY INTEREST ON AMOUNTS DUE FOR SHIPMENTS WHICH WERE NOT PAID WITHIN THE 10-DAY PERIOD AGREED UPON. THE INFORMAL AGREEMENT, IF THERE WAS ONE, WAS WITH REFERENCE TO WHEN PAYMENT WOULD BE MADE. YOU DO NOT CONTEND THAT COLONEL GIBSON PROMISED THAT YOU WOULD BE PAID INTEREST ON AMOUNTS DUE WHICH WERE NOT PAID WITHIN THE 10-DAY PERIOD, AND INDEED ANY SUCH AGREEMENT WOULD APPEAR TO HAVE BEEN UNAUTHORIZED, THE CONTRACTS HAVING FAILED TO PROVIDE FOR PAYMENT OF INTEREST ON DELAYED PAYMENTS ORIGINALLY.

ACCORDINGLY, THE DECISION OF MAY 2, 1960, IS AFFIRMED, AND YOU ARE ADVISED THAT WE SHALL CONSIDER THE MATTER CLOSED.