A-28046, AUGUST 5, 1929, 9 COMP. GEN. 51

A-28046: Aug 5, 1929

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CONTRACTS - DISCOUNTS - DEDUCTIONS ON ACCOUNT OF DEFICIENCIES A CONTRACTOR WHO IS PAID WITHIN THE DISCOUNT PERIOD FOR COAL DELIVERED UNDER A CONTRACT IS CHARGEABLE WITH THE STIPULATED DISCOUNT AND A DISBURSING OFFICER IS CHARGEABLE WITH ANY FAILURE TO MAKE THE PROPER DISCOUNT DEDUCTIONS. A DISBURSING OFFICER WHO MAKES PAYMENT OF THE CONTRACT PRICE FOR COAL DELIVERED UNDER A CONTRACT BEFORE THE COAL IS ANALYZED IS CHARGEABLE AS AN OVERPAYMENT WITH ANY SUM WHICH SHOULD HAVE BEEN DEDUCTED ON ACCOUNT OF ANY DEFICIENCY IN THE COAL. FORWARDED HEREWITH FOR READY REFERENCE IS COPY OF VOUCHER NO. 3678 FORWARDED WITH MY ACCOUNTS FOR THE THIRD QUARTER. THE COAL WAS DELIVERED ON FEBRUARY 25TH AND PROPERLY CERTIFIED VOUCHER RECEIVED MARCH 6TH.

A-28046, AUGUST 5, 1929, 9 COMP. GEN. 51

CONTRACTS - DISCOUNTS - DEDUCTIONS ON ACCOUNT OF DEFICIENCIES A CONTRACTOR WHO IS PAID WITHIN THE DISCOUNT PERIOD FOR COAL DELIVERED UNDER A CONTRACT IS CHARGEABLE WITH THE STIPULATED DISCOUNT AND A DISBURSING OFFICER IS CHARGEABLE WITH ANY FAILURE TO MAKE THE PROPER DISCOUNT DEDUCTIONS. A DISBURSING OFFICER WHO MAKES PAYMENT OF THE CONTRACT PRICE FOR COAL DELIVERED UNDER A CONTRACT BEFORE THE COAL IS ANALYZED IS CHARGEABLE AS AN OVERPAYMENT WITH ANY SUM WHICH SHOULD HAVE BEEN DEDUCTED ON ACCOUNT OF ANY DEFICIENCY IN THE COAL. A DISBURSING OFFICER MAY RECOUP ANY OVERPAYMENTS MADE UNDER A CONTRACT BY USE OF CASH DEPOSITS OF THE CONTRACTOR FOR FAITHFUL PERFORMANCE.

COMPTROLLER GENERAL MCCARL TO W. J. LAWTON, SPECIAL DISBURSING AGENT, DEPARTMENT OF COMMERCE, AUGUST 5, 1929:

THERE HAS BEEN RECEIVED IN REFERENCE TO CONTRACT C3A-1036, DATED FEBRUARY 2, 1929, BETWEEN THE SUPERINTENDENT OF LIGHTHOUSES, STATEN ISLAND, N.Y., AND THE MARITIME COAL CO. (INC.), FOR DELIVERY OF 400 TONS OF COAL AT $4.41 PER TON, YOUR LETTER OF JULY 9, 1929, AS FOLLOWS:

1. FORWARDED HEREWITH FOR READY REFERENCE IS COPY OF VOUCHER NO. 3678 FORWARDED WITH MY ACCOUNTS FOR THE THIRD QUARTER, AND ALSO COPY OF CONTRACT C3A-1036. THIS CONTRACT PROVIDED FOR DISCOUNT OF 2 PERCENT 10 DAYS. THE COAL WAS DELIVERED ON FEBRUARY 25TH AND PROPERLY CERTIFIED VOUCHER RECEIVED MARCH 6TH, MAKING EXPIRATION OF DISCOUNT PERIOD MARCH 16TH. THE VOUCHER WAS CERTIFIED FOR PAYMENT AND PAYMENT MADE ON MARCH 13TH LESS DISCOUNT OF $38.72. DUE TO THIS OFFER OF DISCOUNT THE VOUCHER WAS AUTHORIZED FOR PAYMENT PRIOR TO RECEIPT OF ANALYSIS FROM THE BUREAU OF MINES, IT HAVING BEEN CONSIDERED THAT THE SECURITY FOR THE PROPER PERFORMANCE OF THE CONTRACT FURNISHED BY THE MARITIME COAL COMPANY WOULD BE SUFFICIENT TO OFFSET ANY DEDUCTIONS THAT MIGHT BE NECESSARY DUE TO COAL NOT BEING OF QUALITY SPECIFIED IN CONTRACT AND ALSO AS NO PREVIOUS DIFFICULTY HAD BEEN EXPERIENCED WITH THIS COMPANY PRIOR TO THIS CONTRACT THIS OFFICE FULLY EXPECTED THE COAL WOULD BE OF THE QUALITY REQUIRED BY THE CONTRACT. HOWEVER, WHEN THE ANALYSIS OF THE BUREAU OF MINES, COPY ATTACHED, WAS RECEIVED ON MARCH 18, WHICH BY THE WAY WAS TWO DAYS AFTER THE EXPIRATION OF THE DISCOUNT PERIOD, IT WAS FOUND THAT THE ASH CONTENT WAS 15.6 PERCENT IN EXCESS OF THAT ALLOWED BY THE CONTRACT, WHICH AMOUNTED TO $605.82 AND IS DEDUCTIBLE FROM THE CONTRACT IN ACCORDANCE WITH THE TERMS THEREOF.

2. ALSO THERE IS A FURTHER DEDUCTION OF $68.47 DUE TO USE OF DIFFERENT KIND OF COAL (FORGE COAL) ON HAND PENDING THE RECEIPT OF COAL ON THIS CONTRACT ON ACCOUNT OF EXCESSIVE TIME IN DELIVERY. THE CONTRACT CALLED FOR DELIVERY BETWEEN FEBRUARY 11 AND 14, 1929. A BOATLOAD WAS RECEIVED ON FEBRUARY 6TH BUT ON ACCOUNT OF POOR QUALITY WAS REJECTED AND REPLACING BOATLOAD WAS RECEIVED FEBRUARY 25TH, 1929, AND ACCEPTED FEBRUARY 26, 1929. AS COAL WAS NOT DELIVERED WITHIN THE PERIOD FROM FEBRUARY 11 TO FEBRUARY 14 AS REQUIRED BY THE CONTRACT THE SUPPLY OF BITUMINOUS COAL ON HAND WAS CONSUMED AND IT WAS NECESSARY TO OBTAIN COAL FROM OTHER SOURCES. BITUMINOUS COAL COULD HAVE BEEN OBTAINED LOCALLY AT $8.00 PER TON, BUT A SUPPLY OF FORGE COAL WAS ON HAND WHICH COST $5.50 PER TON AND THIS FORGE COAL WAS USED INSTEAD. THE AMOUNT OF THIS COAL USED PENDING THE RECEIPT OF BITUMINOUS COAL FROM THE CONTRACTOR WAS 62-182/224 TONS WHICH, AT THE PRICE OF $1.09 PER TON, THE DIFFERENCE BETWEEN THE PRICE OF FORGE COAL OF $5.50 PER TON AND CONTRACT PRICE OF $4.41 FOR BITUMINOUS COAL, AMOUNTS TO $68.47.

3. THE TOTAL DEDUCTION THEREFORE THAT SHOULD HAVE BEEN MADE ON THIS CONTRACT IS $674.29. ATTEMPT HAS BEEN MADE TO COLLECT THIS AMOUNT FROM THE MARITIME COAL COMPANY BUT WITHOUT RESULT.

4. THIS OFFICE HAS ON HAND THREE CERTIFIED CHECKS FROM THIS COMPANY IN THE AMOUNT OF $638.00, TWO OF WHICH AMOUNTING TO $453.00 WERE DEPOSITED AS SECURITY ON THE PRESENT CONTRACT AND ONE IN THE AMOUNT OF $185.00 ON A SUBSEQUENT PROPOSAL.

5. THE DIFFERENCE BETWEEN THE OVERPAYMENT ON THE CONTRACT IN QUESTION AND THE CERTIFIED CHECKS IS $36.29, WHICH IS OFFSET BY THE DISCOUNT OF $38.72, DEDUCTED AS REFERRED TO IN PARAGRAPH 1.

6. AS THE DISCOUNT PERIOD WOULD HAVE EXPIRED HAD THE ACCOUNT BEEN HELD IN ABEYANCE UNTIL THE RECEIPT OF THE ANALYSIS FROM THE BUREAU OF MINES PRECLUDING DEDUCTION OF DISCOUNT IT WOULD APPEAR THAT NO LOSS HAS BEEN OCCASIONED THE GOVERNMENT BY THIS TRANSACTION AND IT IS PROPOSED TO DEPOSIT THE CERTIFIED CHECKS AMOUNTING TO $638.00 TO MY CREDIT AND CONSIDER THE MATTER CLOSED. ADVICE IS REQUESTED AS TO WHETHER OR NOT THIS IS ACCEPTABLE TO THE GENERAL ACCOUNTING OFFICE IN SO FAR AS THE SETTLEMENT OF MY ACCOUNTS IS CONCERNED.

THE PAYMENT OF $1,897.27 FOR THE 439 TONS OF COAL DELIVERED WAS, AS STATED BY YOU, $674.29 IN EXCESS OF THE AMOUNT THAT SHOULD HAVE BEEN PAID TO THE CONTRACTOR; THAT IS, THE AMOUNT THAT SHOULD HAVE BEEN PAID, NOT DEDUCTING DISCOUNT, WAS $1,261.70 AND DISCOUNT AT THE STIPULATED RATE OF 2 PERCENT, 10 DAYS, IS $25.23, OR A NET PAYMENT OF $1,236.47. THERE WAS THUS AN OVERPAYMENT OF THE DIFFERENCE BETWEEN $1,897.27 AND $1,236.47, OR $660.80.

THE THREE CHECKS AGGREGATING $638 SHOULD BE APPLIED IN PART SATISFACTION OF THE OVERPAYMENT OF $660.80 TO THE CONTRACTOR, LEAVING A BALANCE OF $22.80 WHICH WILL BE CHARGED IN THE AUDIT AND SETTLEMENT OF YOUR ACCOUNTS. THIS BALANCE OF $22.80 ON THIS ITEM SHOULD BE DEPOSITED IN THE TREASURY OR TRANSMITTED TO THIS OFFICE WITHOUT DELAY FOR SAME CAN NOT BE ALLOWED TO YOU ON THE BASIS SUGGESTED THAT HAD YOU WAITED FOR THE ANALYSES THE DISCOUNT PERIOD WOULD HAVE EXPIRED BEFORE PAYMENT COULD HAVE BEEN MADE. PAYMENT WAS MADE WITHIN THE DISCOUNT PERIOD AND THE GOVERNMENT THEREBY BECAME ENTITLED TO THE 2 PERCENT DISCOUNT.