A-13236, MARCH 19, 1926, 5 COMP. GEN. 739

A-13236: Mar 19, 1926

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PAYMENTS - DISCOUNTS WHERE SUPPLIES ARE FURNISHED THE NAVY DEPARTMENT UNDER A CONTRACT PROVIDING FOR NET PRICES AND MAKING NO REFERENCE TO AN ALLOWANCE OF A DISCOUNT FOR PROMPT PAYMENT. THE FACT THAT THE CONTRACTOR THROUGH ERROR HAD TYPED ON HIS REGULAR BILLHEAD AN OFFER OF DISCOUNT FOR PAYMENT MADE WITHIN A SPECIFIC TIME IS NOT SUFFICIENT TO JUSTIFY THE DEDUCTION OF SAID DISCOUNT. PUBLIC BILLS WILL BE PREPARED UPON WHICH THE SUM OF SEVENTY-TWO THOUSAND FOUR HUNDRED EIGHTY-SIX ($72. THAT IF THE AMOUNT DUE ON PART DELIVERIES ACCEPTED IS SUFFICIENTLY LARGE. PUBLIC BILLS WILL BE PREPARED: PROVIDED FURTHER. THAT THE UNITED STATES RESERVES THE RIGHT TO MAKE PAYMENTS ONLY UPON THE COMPLETION OF THE CONTRACT WHEN SUCH ACTION IS CONSIDERED TO BE FOR ITS BEST INTERESTS: * * *.

A-13236, MARCH 19, 1926, 5 COMP. GEN. 739

PAYMENTS - DISCOUNTS WHERE SUPPLIES ARE FURNISHED THE NAVY DEPARTMENT UNDER A CONTRACT PROVIDING FOR NET PRICES AND MAKING NO REFERENCE TO AN ALLOWANCE OF A DISCOUNT FOR PROMPT PAYMENT, THE FACT THAT THE CONTRACTOR THROUGH ERROR HAD TYPED ON HIS REGULAR BILLHEAD AN OFFER OF DISCOUNT FOR PAYMENT MADE WITHIN A SPECIFIC TIME IS NOT SUFFICIENT TO JUSTIFY THE DEDUCTION OF SAID DISCOUNT.

DECISION BY COMPTROLLER GENERAL MCCARL, MARCH 19, 1926:

ASPEGREN AND CO. (INC.), BY LETTER DATED JANUARY 27, 1926, REQUESTED REVIEW OF SETTLEMENT NO. 0112240, DATED DECEMBER 31, 1925, DISALLOWING ITS CLAIM FOR $240.66, REPRESENTING THE SUM OF AMOUNTS DEDUCTED AS 1 PERCENT DISCOUNT ON VOUCHERS 3967 AND 4148, OCTOBER, 1925, ACCOUNTS OF J. H. MERRIAM (SC), UNITED STATES NAVY, COVERING PAYMENT FOR SUPPLIES FURNISHED THE NAVY DEPARTMENT IN SEPTEMBER, 1925.

BY CONTRACT DATED AUGUST 21, 1925, ENTERED INTO WITH THE UNITED STATES BY THE PAYMASTER GENERAL OF THE NAVY (CHIEF OF THE BUREAU OF SUPPLIES AND ACCOUNTS), ACTING UNDER THE DIRECTION OF THE SECRETARY OF THE NAVY, CLAIMANT COMPANY AGREED TO FURNISH AND DELIVER TO THE SUPPLY OFFICER AT THE NAVAL STATION AND NAVY YARDS DESIGNATED THEREIN ESTIMATED QUANTITIES OF VEGETABLE SHORTENING AT SPECIFIED UNIT PRICES PER POUND, INCLUDING 180,000 POUNDS TO BE DELIVERED TO OFFICER IN CHARGE, NAVAL SUPPLY STATION, NAVAL OPERATING BASE, HAMPTON ROADS (SEWALL'S POINT), VA., AT THE UNIT PRICE OF $0.1337 PER POUND.

ARTICLE 17 OF THE CONTRACT READS:

AND THIS CONTRACT FURTHER WITNESSETH THAT THE UNITED STATES, IN CONSIDERATION OF THE FOREGOING STIPULATION, DOES HEREBY COVENANT AND AGREE WITH THE CONTRACTOR, VIZ: THAT UPON THE PRESENTATION OF THE CONTRACTOR'S INVOICES TO THE PROPER PERSON OR OFFICE DESIGNATED IN THIS CONTRACT, AND AFTER THE INSPECTION AND ACCEPTANCE OF THE SAID ARTICLES OR SERVICES, PUBLIC BILLS WILL BE PREPARED UPON WHICH THE SUM OF SEVENTY-TWO THOUSAND FOUR HUNDRED EIGHTY-SIX ($72,486.00) DOLLARS, OR THE SUM FOUND DUE UNDER THIS CONTRACT, SHALL BE PAID TO THE ORDER OF OR TO THE SAID CONTRACTOR BY THE BUREAU OF SUPPLIES AND ACCOUNTS, NAVY DEPARTMENT, WASHINGTON, D.C.: PROVIDED, THAT IF THE AMOUNT DUE ON PART DELIVERIES ACCEPTED IS SUFFICIENTLY LARGE, PUBLIC BILLS WILL BE PREPARED: PROVIDED FURTHER, THAT THE UNITED STATES RESERVES THE RIGHT TO MAKE PAYMENTS ONLY UPON THE COMPLETION OF THE CONTRACT WHEN SUCH ACTION IS CONSIDERED TO BE FOR ITS BEST INTERESTS: * * *.

TWO INVOICES COVERING THE 180,000 POUNDS WERE RENDERED, ONE DATED SEPTEMBER 23, 1925, IN THE AMOUNT OF $12,634.65 FOR 94,500 POUNDS, AND THE OTHER DATED SEPTEMBER 24, 1925, IN THE AMOUNT OF $11,431.35 FOR 85,500 POUNDS, ON EACH OF WHICH INVOICES THE TERMS WERE TYPED AS "1 PERCENT 10 DAYS--- 30 DAYS NET.' ON RECEIPT OF THESE INVOICES BY THE SUPPLY OFFICER PUBLIC BILLS DATED, RESPECTIVELY, SEPTEMBER 30 AND OCTOBER 1, 1925, WERE PREPARED, ON WHICH BILLS DEDUCTION WAS MADE FOR THE DISCOUNT ($126.35 AND $114.31) AND THESE WERE FORWARDED TO THE BUREAU OF SUPPLIES AND ACCOUNTS, NAVY DEPARTMENT. PAYMENT OF THE PUBLIC BILLS AS PREPARED WAS MADE BY CHECKS DATED, RESPECTIVELY, OCTOBER 2 (VOUCHER 3967) AND OCTOBER 3, 1925 (VOUCHER 4148).

CLAIMANT STATES THAT MORE THAN 95 PERCENT OF ITS REGULAR COMMERCIAL BUSINESS IS DONE ON TERMS OF PAYMENT WHICH ALLOW A DISCOUNT OF 1 PERCENT FROM INVOICE VALUE FOR REMITTANCE WITHIN 10 DAYS FROM DATE OF ITS INVOICES; THAT IN PREPARING THE TWO INVOICES HERE IN QUESTION ITS INVOICE CLERKS ERRONEOUSLY TYPED THEREON ITS REGULAR COMMERCIAL DISCOUNT TERMS, WHEN AS A MATTER OF FACT THE CONTRACT PRICE TO THE NAVY WAS NET, SUBJECT TO NO DISCOUNT; THAT UPON DISCOVERY OF THE ERROR CORRECTED INVOICES CARRYING TERMS OF "NET CASH AGAINST DOCUMENTS" WERE FORWARDED TO THE SUPPLY OFFICER OF NAVAL STATION AT HAMPTON ROADS, VA.; THAT HE RETURNED THEM OCTOBER 7, 1925, INDICATING THAT THE ORIGINAL INVOICES HAD BEEN APPROVED FOR PAYMENT AND FORWARDED TO THE DISBURSING OFFICER, NAVY DEPARTMENT, WASHINGTON, D.C., UNDER DATES, RESPECTIVELY, OF SEPTEMBER 30 AND OCTOBER 1, 1925. CLAIMANT ALSO STATES THAT INVOICES COVERING OTHER DELIVERIES UNDER THE SAME CONTRACT WERE CORRECTLY RENDERED, NO NOTATION BEING MADE THEREON FOR DISCOUNT.

THE CONTRACT CONTAINED NO PROVISION WITH REFERENCE TO DISCOUNT UPON PAYMENT OF INVOICES. THE PRICES SPECIFIED THEREIN WERE NET, AND PAYMENT COULD BE MADE FOR PART DELIVERIES OR ONLY UPON COMPLETION OF THE CONTRACT, AS MIGHT BE DETERMINED FOR THE BEST INTERESTS OF THE GOVERNMENT.

UNDER AGREEMENTS FOR THE PURCHASE OF SUPPLIES CALLING FOR THE PAYMENT OF STIPULATED AMOUNTS, DISCOUNTS SHOULD NOT BE DEDUCTED UNLESS THEY ARE IN THE STATUS OF BEING EXPRESSLY OFFERED. 23 COMP. DEC. 141. GENERALLY, THE PRINTED OFFER ON A CONTRACTOR'S REGULAR BILLHEAD DOES NOT CONSTITUTE AN EXPRESS OFFER OF DISCOUNT AMENDING THE CONTRACT. 2 COMP. GEN. 83.

THE OFFER HERE IN QUESTION DID NOT APPEAR AS A PRINTED PART OF THE CONTRACTOR'S REGULAR BILLHEAD, BUT WAS SPECIALLY TYPED ON THE TWO INVOICES. THIS TYPED OFFER IS SHOWN, HOWEVER, TO HAVE BEEN AN ERROR, NO EXPRESS OFFER OF DISCOUNT BEING INTENDED. IN THIS CONNECTION IT IS NOTED THAT PAYMENTS FOR THE OTHER DELIVERIES UNDER THE SAME CONTRACT WERE MADE AT THE CONTRACT PRICE, NO DEDUCTION BEING MADE FOR DISCOUNT.