A-11453, NOVEMBER 16, 1925, 5 COMP. GEN. 349

A-11453: Nov 16, 1925

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SURPLUS WAR SUPPLIES - AUCTIONEER'S FEES WHERE AN AUCTIONEER IS EMPLOYED TO CONDUCT A SALE OF SURPLUS PROPERTY OF THE GOVERNMENT AND PAYMENT FOR SUCH SERVICES IS TO BE MADE ON A COMMISSION BASIS. WHERE THERE WERE CANCELED SALES. (B) THE AMOUNTS OF ALL SALES IN WHICH THE PURCHASER DEFAULTED AND THERE IS SHOWN TO HAVE BEEN NO FAULT OR NEGLIGENCE ON THE PART OF THE AUCTIONEER. (2) DEDUCTING THEREFROM (A) THE AMOUNT OF REFUNDS TO PURCHASERS TO COVER SHORTAGES IN DELIVERIES WHERE PAYMENTS WERE MADE AT UNIT PRICES ON ESTIMATED QUANTITIES SUBJECT TO ADJUSTMENT ON DETERMINATION OF ACTUAL QUANTITIES DELIVERED. (B) THE AMOUNTS OF REFUNDS MADE TO PURCHASERS WHERE THERE WAS NO SALE BECAUSE OF THE NONEXISTENCE OF THE THING PURPORTED TO BE SOLD.

A-11453, NOVEMBER 16, 1925, 5 COMP. GEN. 349

SALES, SURPLUS WAR SUPPLIES - AUCTIONEER'S FEES WHERE AN AUCTIONEER IS EMPLOYED TO CONDUCT A SALE OF SURPLUS PROPERTY OF THE GOVERNMENT AND PAYMENT FOR SUCH SERVICES IS TO BE MADE ON A COMMISSION BASIS--- I.E., A FIXED PERCENT ON THE SALES--- THE BASIS OF ARRIVING AT THE PROPER AMOUNT ON WHICH TO COMPUTE THE AUCTIONEER'S FEES UNDER THE CONTRACT, WHERE THERE WERE CANCELED SALES, REFUNDS, DEFAULTS, FORFEITURES OF DEPOSITS, AND PAYMENTS FOR OVERDELIVERIES, SHOULD BE DETERMINED BY (1) ADDING TO THE TOTAL AMOUNTS PAID ON OR BEFORE DELIVERY AS PURCHASE PRICE ON SALES ACTUALLY CONSUMMATED, (A) THE AMOUNTS SUBSEQUENTLY PAID BY PURCHASERS TO COVER OVERAGES IN QUANTITIES DELIVERED, AND (B) THE AMOUNTS OF ALL SALES IN WHICH THE PURCHASER DEFAULTED AND THERE IS SHOWN TO HAVE BEEN NO FAULT OR NEGLIGENCE ON THE PART OF THE AUCTIONEER, AND (2) DEDUCTING THEREFROM (A) THE AMOUNT OF REFUNDS TO PURCHASERS TO COVER SHORTAGES IN DELIVERIES WHERE PAYMENTS WERE MADE AT UNIT PRICES ON ESTIMATED QUANTITIES SUBJECT TO ADJUSTMENT ON DETERMINATION OF ACTUAL QUANTITIES DELIVERED, AND (B) THE AMOUNTS OF REFUNDS MADE TO PURCHASERS WHERE THERE WAS NO SALE BECAUSE OF THE NONEXISTENCE OF THE THING PURPORTED TO BE SOLD, ON ACCOUNT OF GOODS NOT FIT FOR CONSUMPTION, BECAUSE OF GOODS STOLEN, ETC. AN AUCTIONEER IS NOT ENTITLED TO COMPENSATION FOR SALES MADE TO DEFAULTING PURCHASERS IN CASES IN WHICH THE AUCTIONEER HAD NOT REQUIRED ALL THE NECESSARY DEPOSITS, ETC.

COMPTROLLER GENERAL MCCARL TO LIEUT. COL. S. B. MCINTYRE, UNITED STATES ARMY, NOVEMBER 16, 1925:

THERE HAS BEEN RECEIVED YOUR LETTER OF SEPTEMBER 11, 1925, SUBMITTING, WITH REQUEST FOR DECISION AS TO WHETHER YOU ARE AUTHORIZED TO MAKE PAYMENT THEREON, A VOUCHER STATED IN FAVOR OF SAMUEL T. FREEMAN AND CO. FOR $83.64, THE ALLEGED BALANCE DUE FOR SERVICES AS AUCTIONEER IN THE SALE OF SURPLUS PROPERTY AT A PUBLIC AUCTION SALE HELD DECEMBER 15, 1922, AT THE UNITED STATES ARMY QUARTERMASTER INTERMEDIATE DEPOT, AT PHILADELPHIA, PA.

IT APPEARS THAT THE FIRM OF SAMUEL T. FREEMAN AND CO. WAS EMPLOYED AS THE AUCTIONEER TO CONDUCT SAID SALE, FOR WHICH SERVICE THE FOLLOWING COMMISSIONS WERE TO BE PAID:

ON SALES UP TO AND INCLUDING $25,000, 6 1/2 PERCENT ON $25,000, OR $1,625.00, THIS AMOUNT TO BE THE COMPENSATION WHETHER THE AMOUNT OF THE SALE ACTUALLY REACHES $25,000 OR NOT.

ON SALES IN EXCESS OF $25,000 AND UP TO AND INCLUDING $50,000, THE SUM OF $1,625.00 PLUS 2 PERCENT OF THE EXCESS OVER $25,000, OR A MAXIMUM OF $2,125.00.

ON SALES IN EXCESS OF $50,000 AND UP TO AND INCLUDING $75,000, THE SUM OF $2,125.00 PLUS 1 1/2 PERCENT OF THE EXCESS OVER $50,000, OR A MAXIMUM OF $2,500.00.

ON SALES IN EXCESS OF $75,000 AND UP TO AND INCLUDING $125,000, THE SUM OF $2,500.00 PLUS 1 PERCENT OF THE EXCESS OVER $75,000, OR A MAXIMUM OF $3,000.00.

ON SALES IN EXCESS OF $125,000 AND UP TO AND INCLUDING $200,000, THE SUM OF $3,000.00 PLUS 1/2 PERCENT OF THE EXCESS OVER $125,000, OR A MAXIMUM OF $3,375.00.

ON SALES OF $200,000 AND UP TO AND INCLUDING $500,000, THE SUM OF $3,375.00 PLUS 1/4 PERCENT OF THE EXCESS OVER $200,000, OR A MAXIMUM OF $4,125.00.

ON SALES IN EXCESS OF $500,000, THE SUM OF $4,125.00 PLUS ONE QUARTER OF 1 PERCENT OF THE EXCESS OVER $500,000.

IN CONSIDERATION OF SAID COMPENSATION THE AUCTIONEER WAS TO RENDER SERVICES, AS FOLLOWS:

(1) TO SEND A SUFFICIENT NUMBER OF EMPLOYEES TO THE PLACE OF THE SALE PRIOR TO THE DATE SET FOR HOLDING SAME TO MAKE NECESSARY PHYSICAL ARRANGEMENTS AND TO TAG OR OTHERWISE SUITABLY MARK SAMPLES OF ALL LOTS TO BE SOLD.

(2) TO PROVIDE SUCH NEWSPAPER ADVERTISING AS HE MAY CONSIDER NECESSARY TO ATTRACT BUYERS, IN ADDITION TO THE ADVERTISING ARRANGED FOR BY THE DIRECTOR OF SALES.

(3) TO ARRANGE AND PRINT AT HIS OWN EXPENSE ALL CATALOGUES.

(4) TO MAIL CATALOGUES IN GOVERNMENT-FRANKED ENVELOPES TO THOSE PERSONS WHOSE NAMES APPEAR ON HIS OWN MAILING LIST, THE MAILING LIST FURNISHED BY THE OFFICE IN CHARGE OF THE SALE, AND TO SUCH OTHERS AS INQUIRE FOR SAME.

(5) TO FURNISH COMPETENT PERSONS TO CRY THE SALE.

(6) TO FURNISH THE NECESSARY CLERICAL HELP TO RECEIVE AND TURN OVER THE FUNDS AT THE TIME OF THE SALE AND TO KEEP A COMPLETE RECORD OF ALL SALES MADE POSTED AT ALL TIMES TO SHOW THAT THE DEPOSITS OF THE BIDDERS COVER THE REQUIRED PERCENTAGES OF THE SALES MADE TO THEM, AND IN ANY CASE IN WHICH THE REQUIRED DEPOSIT IS NOT SECURED, THE AUCTIONEER SHALL RECEIVE NO COMMISSION ON THE ITEMS INVOLVED.

(7) TO FAMILIARIZE HIMSELF WITH THE NATURE AND USES OF THE PROPERTY IN ORDER THAT HE CAN INTELLIGENTLY DESCRIBE THE SAME TO THE BUYERS AND BE ABLE TO DRAW TO THE SALE BUYERS FOR THE VARIOUS COMMODITIES.

(8) TO FURNISH THE NECESSARY EXPERT HELP TO ASSIST IN SHOWING SAMPLES WHEN THE CRIER IS OFFERING THE SAME AND TO DO ANY NECESSARY WORK USUALLY REQUIRED OF AN AUCTIONEER.

(9) TO HAVE A REPRESENTATIVE AT THE PLACE OF AUCTION AT LEAST ONE DAY PRIOR TO THE SALE TO ANSWER QUESTIONS, SELL PADDLES, AND ACCEPT DEPOSITS.

(10) THE AUCTIONEER WILL MAKE A CAREFUL CHECK OF THE INVENTORY BEFORE THE CATALOGUES ARE PRINTED.

(11) TO RENDER A COMPLETE REPORT IN QUADRUPLICATE OF THE SALE AFTER HAVING CHECKED SAME AS TO PRICES RECEIVED, WITH THE SEPARATE RECORD WHICH WILL BE KEPT BY THE OFFICE IN CHARGE OF THE SALE.

(12) TO FURNISH SUCH OTHER SERVICES, ALTHOUGH NOT HEREIN EXPRESSED, AS ARE USUALLY PROVIDED BY AN AUCTIONEER IN A PUBLIC AUCTION SALE.

THE QUESTION INVOLVED IN THE SUBMISSION IS THE DETERMINATION OF THE BASIS OF ARRIVING AT THE PROPER AMOUNT ON WHICH TO COMPUTE THE FEES OF THE AUCTIONEER UNDER THE CONTRACT, IN VIEW OF THE FACT THAT THERE WERE CERTAIN CANCELED SALES, REFUNDS, DEFAULTS, FORFEITURES OF DEPOSITS, AND PAYMENTS FOR OVERDELIVERIES.

ASSUMING THAT THE AMOUNT OF $1,161,410.22 SHOWN ON THE "ACCOUNT OF SALES" REPRESENTS THE AMOUNT PAID ON OR BEFORE DELIVERY AS PURCHASE PRICE ON SALES ACTUALLY CONSUMMATED, SOME OF THE SAID PAYMENTS BEING MADE AT UNIT PRICES ON ESTIMATED QUANTITIES SUBJECT TO ADJUSTMENT ON DETERMINATION OF ACTUAL QUANTITIES, SAID AMOUNT IS TO BE INCREASED BY THE AMOUNT SUBSEQUENTLY PAID WHEN THE ACTUAL QUANTITY EXCEEDED THE ESTIMATED QUANTITY AND REDUCED BY THE AMOUNT OF REFUNDS WHEN THE ACTUAL QUANTITY WAS FOUND TO BE LESS THAT THE ESTIMATED QUANTITY. THE TOTAL OF ADDITIONAL PAYMENTS ON ACCOUNT OF SUCH OVERAGES IS STATED TO BE $2,624.27, AND THE AMOUNT OF THE SHORTAGES IS STATED AS $5,340. THIS WOULD MAKE THE AMOUNT OF THE SALES ON THE BASIS OF THE GOODS ACTUALLY DELIVERED AND PAID FOR $1,158,693.81. THEN, THERE APPEAR TO HAVE BEEN REFUNDS AMOUNTING TO $3,594.22 ON ACCOUNT OF GOODS NOT FIT FOR CONSUMPTION AND $310 BECAUSE OF GOODS STOLEN. SINCE THESE REFUNDS WERE AUTHORIZED ONLY ON THE GROUND THAT AS TO THESE ITEMS THERE WAS NO SALE BECAUSE OF THE NONEXISTENCE OF THE THING PURPORTED TO BE SOLD, AND AS THE AUCTIONEER WAS ENGAGED TO SELL ONLY SUCH GOODS AS WERE ON HAND AT TIME OF SALE, THE GOVERNMENT NOT GUARANTEEING TO HIM THAT ALL ARTICLES LISTED IN THE CATALOGUE WERE SALABLE, HE IS ENTITLED TO NO COMPENSATION ON THE AMOUNT OF THESE REFUNDS WHICH FURTHER REDUCE THE AMOUNT OF THE SALES TO $1,154,789.59. IT APPEARS THAT THREE PURCHASERS DEFAULTED IN PAYMENT ON PURCHASES AGGREGATING $4,761.30, WITHOUT FAULT OR NEGLIGENCE ON THE PART OF THE AUCTIONEER, AND AS THE FEE WAS EARNED ON THESE SALES THE AMOUNT OF SALES FOR PURPOSE OF COMPUTING FEE WAS THEREBY INCREASED TO $1,159,550.89. IT ALSO APPEARS THAT THERE WERE TWO OTHER SALES ON EACH OF WHICH THE PADDLE FEE OF $200 WAS FORFEITED BUT AS THE AUCTIONEER HAD NEGLECTED TO COLLECT THE REQUIRED 20 PERCENT DEPOSIT, NO FEE IS ALLOWABLE WITH RESPECT TO EITHER OF THESE SALES. THEREFORE, UPON THE FACTS APPEARING, THE AMOUNT OF SALES ON WHICH THE AUCTIONEER'S FEE IN ACCORDANCE WITH THE STIPULATED SCHEDULE SHOULD HAVE BEEN COMPUTED IS $1,159,550.89, MAKING THE AMOUNT OF THE FEE $5,773.88 INSTEAD OF $5,783.64 AS STATED ON THE VOUCHER SUBMITTED. AS $5.700 WAS PAID IN JANUARY, 1923, PAYMENT TO THE AUCTIONEER OF ANY ADDITIONAL AMOUNT IN EXCESS OF $73.88 IS NOT NOW AUTHORIZED.

THIS DECISION IS NOT TO BE REGARDED AS APPROVING OR INDICATING ANY OPINION WITH RESPECT TO THE LEGALITY OF ANY OF THE REFUNDS MADE TO PURCHASERS UNDER THE SALE INVOLVED.