A-17161, FEBRUARY 23, 1927, 6 COMP. GEN. 545

A-17161: Feb 23, 1927

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PAYMENTS - DISCOUNTS UNDER A CONTRACT FOR THE FURNISHING OF A DEFINITE QUANTITY OF SUPPLIES TO THE GOVERNMENT IN WHICH A DISCOUNT OF 1 PERCENT FOR PAYMENT WITHIN 10 DAYS WAS OFFERED. THE UNITED STATES IS NOT ENTITLED TO SUCH DISCOUNT WHERE PAYMENT WAS NOT MADE WITHIN THE 10-DAY PERIOD BECAUSE OF NEGLIGENCE OF THE ADMINISTRATIVE OFFICE IN NOT ACCOMPANYING ITS ORDER WITH A PROPERLY PREPARED VOUCHER AS REQUIRED BY GENERAL SUPPLY COMMITTEE INSTRUCTIONS GOVERNING PURCHASES UNDER SUCH CONTRACTS. 1927: RECEIPT IS ACKNOWLEDGED OF YOUR LETTER OF JANUARY 25. A CONTRACT COVERING THE DEFINITE REQUIREMENTS OF ALL DEPARTMENTS AND ESTABLISHMENTS OF THE GOVERNMENT FOR VARIOUS SUPPLIES WAS ENTERED INTO UNDER DATE OF SEPTEMBER 10.

A-17161, FEBRUARY 23, 1927, 6 COMP. GEN. 545

PAYMENTS - DISCOUNTS UNDER A CONTRACT FOR THE FURNISHING OF A DEFINITE QUANTITY OF SUPPLIES TO THE GOVERNMENT IN WHICH A DISCOUNT OF 1 PERCENT FOR PAYMENT WITHIN 10 DAYS WAS OFFERED, THE UNITED STATES IS NOT ENTITLED TO SUCH DISCOUNT WHERE PAYMENT WAS NOT MADE WITHIN THE 10-DAY PERIOD BECAUSE OF NEGLIGENCE OF THE ADMINISTRATIVE OFFICE IN NOT ACCOMPANYING ITS ORDER WITH A PROPERLY PREPARED VOUCHER AS REQUIRED BY GENERAL SUPPLY COMMITTEE INSTRUCTIONS GOVERNING PURCHASES UNDER SUCH CONTRACTS.

COMPTROLLER GENERAL MCCARL TO THE PUBLIC PRINTER, FEBRUARY 23, 1927:

RECEIPT IS ACKNOWLEDGED OF YOUR LETTER OF JANUARY 25, 1927, REQUESTING DECISION WHETHER A DISCOUNT OF 1 PERCENT FOR PAYMENT WITHIN 10 DAYS SHOULD BE TAKEN ON A VOUCHER IN FAVOR OF J. MILTON HAGY WASTE WORKS COVERING SUPPLIES DELIVERED TO THE GOVERNMENT PRINTING OFFICE UNDER GENERAL SUPPLY COMMITTEE DEFINITE QUANTITY AWARD FOR THE SECOND QUARTER OF THE FISCAL YEAR 1927 UNDER CONDITIONS HEREINAFTER SET FORTH.

IN RESPONSE TO THE GENERAL SUPPLY COMMITTEE'S REQUEST FOR DEFINITE QUANTITY REQUIREMENTS OF CERTAIN SUPPLIES FOR THE SECOND QUARTER, FISCAL YEAR 1927, THE GOVERNMENT PRINTING OFFICE REPLIED THAT IT WOULD REQUIRE, AMONG OTHER SUPPLIES, 5,000 POUNDS OF WHITE COTTON WASTE DURING THE PERIOD MENTIONED. A CONTRACT COVERING THE DEFINITE REQUIREMENTS OF ALL DEPARTMENTS AND ESTABLISHMENTS OF THE GOVERNMENT FOR VARIOUS SUPPLIES WAS ENTERED INTO UNDER DATE OF SEPTEMBER 10, 1926, BY THE SECRETARY OF THE TREASURY, ITEM 3144-A-2-DD OF WHICH COVERED WASTE, COTTON, WHITE, IN 550- POUND BALES, AT $0.1325 PER POUND. THE CONTRACT PROVIDED FOR DISCOUNT OF 1 PERCENT FOR PAYMENT WITHIN 10 DAYS. THE INSTRUCTIONS ACCOMPANYING THE AWARD FOR DEFINITE AND ADDITIONAL QUANTITY SUPPLIES PROVIDED THAT---

* * * DEPARTMENTS WHOSE REQUIREMENTS HAVE BEEN INCLUDED IN THESE QUANTITIES SHOULD IMMEDIATELY DRAW THEIR ORDERS ON THE CONTRACTORS AND FORWARD THEM WITH PROPERLY PREPARED VOUCHERS TO THE GENERAL SUPPLY COMMITTEE. ORDERS FOR ANY ADDITIONAL SUPPLIES SHOULD BE SENT DIRECT TO THE CONTRACTORS AND NOT TO THE COMMITTEE.

AN ORDER FOR 5,000 POUNDS OF WASTE WAS PLACED WITH THE CONTRACTOR FOR DELIVERY UNDER THE CONTRACT AND IN ACCORDANCE WITH MASTER SPECIFICATIONS 262A, PROMULGATED JUNE 15, 1926, BY THE FEDERAL SPECIFICATIONS BOARD. DELIVERY IN FULL WAS MADE ON OCTOBER 8, 1926.

GOVERNMENT PRINTING OFFICE PURCHASE ORDER 1471 FOR 5,500 POUNDS OF WASTE WAS ISSUED OCTOBER 2, 1926, AND FORWARDED TO THE GENERAL SUPPLY COMMITTEE WHERE IT WAS RECEIVED ON OCTOBER 8, 1926, NO VOUCHER PROPERLY PREPARED AS REQUIRED BY THE INSTRUCTIONS MENTIONED ABOVE, ACCOMPANYING THE PURCHASE ORDER.

IT APPEARS THAT SUBSEQUENT TO DECEMBER 1, 1926, A VOUCHER WAS PREPARED TO COVER PAYMENT FOR 4,730 POUNDS OF WASTE, NET WEIGHT, AND FORWARDED TO THE GENERAL SUPPLY COMMITTEE FOR TRANSMISSION TO THE CONTRACTOR FOR EXECUTION. THE CONTRACTOR RETURNED THE VOUCHER UNSIGNED, STATING THAT PAYMENT SHOULD BE MADE FOR 5,000 POUNDS, GROSS WEIGHT, IN ACCORDANCE WITH THE SPECIFICATIONS. A SECOND VOUCHER WAS PREPARED FOR PAYMENT OF 5,000 POUNDS OF WASTE AT THE CONTRACT PRICE AND A DISCOUNT OF 1 PERCENT WAS STATED THEREON. THE CONTRACTOR RETURNED HIS VOUCHER OBJECTING TO THE DISCOUNT BEING DEDUCTED IN VIEW OF THE LAPSE OF TIME SINCE DELIVERY HAS BEEN MADE.

IT IS CONTENDED THAT IN VIEW OF THE PROVISIONS OF PARAGRAPH 27 OF THE GENERAL INSTRUCTIONS CONTAINED IN GENERAL SUPPLY COMMITTEE ADVERTISEMENT FOR PROPOSALS PROVIDING THAT WHEN DISCOUNTS ARE QUOTED THE DISCOUNT PERIOD SHALL BEGIN WITH THE DATE OF THE RECEIPT OF BOTH MATERIAL AND A PROPERLY EXECUTED VOUCHER; THAT AS NO VOUCHER HAS BEEN RECEIVED FROM THE CONTRACTOR, PROPERLY EXECUTED, THE DISCOUNT PERIOD HAS NOT ELAPSED AND, THEREFORE, THAT THE DEDUCTION OF SUCH DISCOUNT IS PROPER.

THE PURPOSE OF THE DEFINITE QUANTITY AWARDS IS TO ENABLE THE GOVERNMENT TO TAKE ADVANTAGE OF THE LOWER PRICES QUOTED AS A RESULT OF THE SAVINGS TO THE CONTRACTOR IN THE HANDLING, PACKING, SHIPPING, ETC., OF SUCH SUPPLIES. SUCH CONTRACTS ARE BASED ON THE UNDERSTANDING THAT THE CONTRACTOR WILL MAKE DELIVERY TO THE GENERAL SUPPLY COMMITTEE WHO WILL DISTRIBUTE THE SUPPLIES AMONG THE ORDERING OFFICES, AND THAT ALL NECESSARY LABOR AND CLERICAL WORK IN CONNECTION WITH SUCH SUPPLIES AFTER DELIVERY AND TO SECURE PROMPT PAYMENT TO THE CONTRACTOR WILL BE PERFORMED BY THE GOVERNMENT. FOR THIS REASON, THE GENERAL INSTRUCTIONS COVERING SUCH PURCHASES WERE AMENDED IN THE DEFINITE QUANTITY AWARDS SO AS TO REQUIRE THAT A PROPERLY PREPARED VOUCHER SHALL BE FORWARDED TO THE GENERAL SUPPLY COMMITTEE TOGETHER WITH THE PURCHASE ORDER COVERING THE SUPPLIES.

NO PROPERLY EXECUTED VOUCHER ACCOMPANIED THE ORDER OCTOBER 2, 1926, AND IN FACT, NO VOUCHER WAS PREPARED COVERING THE SUPPLIES FURNISHED ON OCTOBER 8, 1926, UNTIL SUBSEQUENT TO DECEMBER 1, 1926. UNDER THE FACTS AS THEY APPEAR FROM THE RECORD, THE DELAY IN MAKING PAYMENT APPEARS TO HAVE BEEN CAUSED BY THE ADMINISTRATIVE OFFICE AND NOT DUE TO ANY NEGLIGENCE ON THE PART OF THE CONTRACTOR. ACCORDINGLY, THE WITHHOLDING OF THE AMOUNT OF THE DISCOUNT OF 1 PERCENT IS NOT AUTHORIZED.