A-36081, APRIL 15, 1931, 10 COMP. GEN. 466

A-36081: Apr 15, 1931

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IT IS SHOWN THAT PAYMENT OF THE CONTRACT PRICE. THAT SUCH PAYMENT WAS MADE WITHIN THE DISCOUNT PERIOD SPECIFIED IN THE CONTRACT AFTER A CORRECT INVOICE OR VOUCHER WAS SUBMITTED BY THE CONTRACTOR. THE GOVERNMENT WAS ENTITLED TO THE DISCOUNT PROVIDED BY THE CONTRACT ON PAYMENTS FOR SUPPLIES FURNISHED THEREUNDER. BY WHICH WAS DISALLOWED ITS CLAIM FOR $23.03. WE CALL YOUR ATTENTION TO THE FACT THAT THE SHIPMENT WAS MADE SUBJECT TO 2 PERCENT CASH DISCOUNT IF PAID WITHIN 10 DAYS FROM DATE OF DELIVERY. DELIVERY WAS MADE ON NOVEMBER 22ND. SETTLEMENT WAS DUE US ON DECEMBER 2ND. OUR INVOICES WERE NOT RETURNED UNTIL DECEMBER 6TH. WE CALL YOUR ATTENTION TO THE FACT THAT THERE WAS NO JUSTIFICATION FOR RETURNING THESE INVOICES FOR CORRECTION.

A-36081, APRIL 15, 1931, 10 COMP. GEN. 466

CONTRACTS - DISCOUNTS - LUMBER WHERE A GOVERNMENT CONTRACT FOR LUMBER PROVIDES THAT CERTAIN DISCOUNTS FROM SUBMITTED BID PRICES WOULD BE ALLOWED FOR PROMPT PAYMENTS, AS THEREIN STATED, AND IT IS SHOWN THAT PAYMENT OF THE CONTRACT PRICE, LESS SPECIFIED DISCOUNT, HAS BEEN MADE TO THE CONTRACTOR FOR QUANTITIES OF LUMBER DELIVERED AND ACCEPTED, AND THAT SUCH PAYMENT WAS MADE WITHIN THE DISCOUNT PERIOD SPECIFIED IN THE CONTRACT AFTER A CORRECT INVOICE OR VOUCHER WAS SUBMITTED BY THE CONTRACTOR, THE GOVERNMENT WAS ENTITLED TO THE DISCOUNT PROVIDED BY THE CONTRACT ON PAYMENTS FOR SUPPLIES FURNISHED THEREUNDER.

DECISION BY COMPTROLLER GENERAL MCCARL, APRIL 15, 1931:

PRIEST LUMBER CO. (INC.), APPLIED MARCH 21, 1931, FOR REVIEW OF SETTLEMENT OF MARCH 14, 1931, BY WHICH WAS DISALLOWED ITS CLAIM FOR $23.03, A BALANCE ALLEGED TO BE DUE UNDER ITS NAVY DEPARTMENT CONTRACT NOS -17948, DATED JUNE 28, 1930, FOR QUANTITIES OF ASH LUMBER DELIVERED TO THE UNITED STATES NAVY YARD AT CHARLESTON, S.C., IN NOVEMBER, 1930, THAT BEING THE AMOUNT DEDUCTED FROM THE CONTRACT PRICE TO COVER THE DISCOUNT ALLEGED TO BE DUE THE GOVERNMENT ON ACCOUNT OF PROMPT PAYMENT FOR SUCH LUMBER.

IN ITS APPLICATION FOR REVIEW, THE CONTRACTOR STATED:

FIRST, WE CALL YOUR ATTENTION TO THE FACT THAT THE SHIPMENT WAS MADE SUBJECT TO 2 PERCENT CASH DISCOUNT IF PAID WITHIN 10 DAYS FROM DATE OF DELIVERY. DELIVERY WAS MADE ON NOVEMBER 22ND, 1930, THEREFORE, SETTLEMENT WAS DUE US ON DECEMBER 2ND, 1930, IN ORDER FOR THE GOVERNMENT TO AVAIL ITSELF OF THE CASH DISCOUNT.

OUR INVOICES WERE NOT RETURNED UNTIL DECEMBER 6TH--- FOUR DAYS AFTER THE DISCOUNT PERIOD HAD LAPSED.

SECOND, WE CALL YOUR ATTENTION TO THE FACT THAT THERE WAS NO JUSTIFICATION FOR RETURNING THESE INVOICES FOR CORRECTION, IN VIEW OF THE FACT THAT THE DIFFERENCE IN AMOUNT WAS LESS THAN $1.00, AND SUCH A SLIGHT DIFFERENCE SHOULD EITHER HAVE BEEN OVERLOOKED OR DEDUCTION MADE IN THE SETTLEMENT WITHOUT CONSUMING THE TIME FOR RETURNING INVOICES FOR CORRECTION, AND THEREBY ARBITRARILY EXTENDING THE DISCOUNT PERIOD TEN DAYS.

UNDER THE PROVISIONS OF THE CONTRACT THE CONTRACTOR AGREED, FOR AND IN CONSIDERATION OF THE STIPULATED PRICES, TO DELIVER TO THE SUPPLY OFFICER OF THE UNITED STATES NAVY YARD, CHARLESTON, S.C., ALL TRANSPORTATION CHARGES PAID, WITHIN 30 DAYS AFTER DATE OF CONTRACT OF THE GOVERNMENT'S ORDER THEREFOR, THE APPROXIMATE QUANTITIES OF WHITE ASH LUMBER (DESIGNATED AS CLASS 1165), 6 INCHES AND UP WIDE AND 8 TO 16 FEET LONG, AS FOLLOWS: 5,000 B.M. FEET, 1 INCH THICK, 5,000 B.M. FEET, 1 1/2 INCHES THICK, AND 5,000 B.M. FEET 2 INCHES THICK. THE AGREED PRICES FOR SAID LUMBER, AS FIXED BY THE CONTRACT, BASED UPON THE CONTRACTOR'S BID, WERE AS FOLLOWS: $74 PER M FEET FOR LUMBER 1 INCH THICK, LESS DISCOUNT OF 2 PERCENT 10 DAYS, AND 1 PERCENT 20 DAYS; $95 PER M FEET FOR LUMBER 1 1/2 INCHES THICK, LESS DISCOUNT OF 2 PERCENT 10 DAYS, AND 1 PERCENT 20 DAYS; AND $98 PER M FEET FOR LUMBER 2 INCHES THICK, LESS DISCOUNT OF 2 PERCENT 10 DAYS, AND 1 PERCENT 20 DAYS.

IT APPEARS THAT IN NOVEMBER, 1930, QUANTITIES OF WHITE ASH LUMBER WERE ORDERED UNDER THE CONTRACT, AND THAT ON NOVEMBER 24, 1930, THE CONTRACTOR DELIVERED REQUIRED QUANTITIES OF SAID LUMBER TO THE SUPPLY OFFICER OF THE UNITED STATES NAVY YARD, CHARLESTON, S.C. THE CONTRACT PRICES FOR SUCH DELIVERIES, WITHOUT DISCOUNT, WERE AS FOLLOWS:

TABLE 3,682 B.M. FEET WHITE ASH LUMBER, AT $74 PER M -------------- - $285.79 3,733 B.M. FEET WHITE ASH LUMBER, AT 95 PER M ------------- -- 354.64 5,216 B.M. FEET WHITE ASH LUMBER, AT 98 PER M ------------ --- 511.17

TOTAL CONTRACT PRICE, WITHOUT ANY DISCOUNT ------------ 1,151.60

THE RECORD SHOWS THAT THE CONTRACTOR WAS PAID FOR THE QUANTITIES OF LUMBER SO DELIVERED, ON VOUCHER NO. 32562, THE SUM OF $1,128.57, BY CHECK OF THE TREASURER OF THE UNITED STATES NO. 102425, DATED DECEMBER 23, 1930, THE SUM OF $23.03 HAVING BEEN DEDUCTED FROM THE ABOVE MENTIONED TOTAL CONTRACT PRICE TO COVER THE 2 PERCENT DISCOUNT ALLEGED TO BE DUE THE GOVERNMENT FOR PROMPT PAYMENT, IN ACCORDANCE WITH THE TERMS OF THE CONTRACT.

ARTICLE 8 OF THE CONTRACT PROVIDED:

PAYMENTS.--- THE CONTRACTOR SHALL BE PAID, UPON THE SUBMISSION OF PROPERLY CERTIFIED INVOICES OR VOUCHERS, THE PRICES STIPULATED HEREIN FOR ARTICLES DELIVERED AND ACCEPTED OR SERVICES RENDERED, LESS DEDUCTIONS, IF ANY, AS HEREIN PROVIDED * * *.

THE SCHEDULE NO. 3436, MADE A PART OF THE CONTRACT, PROVIDED:

DISCOUNT.--- SUBJECT TO THE CONDITIONS SPECIFIED IN BID, DISCOUNT WILL BE ALLOWED FOR PAYMENT WITHIN CALENDAR DAYS AS FOLLOWS:

WITHIN 10 DAYS, 2 PERCENT; WITHIN 20 DAYS, 1 PERCENT.

THE CONDITIONS SPECIFIED IN THE CLAIMANT'S BID, WHICH WAS SUBMITTED ON THE STANDARD GOVERNMENT FORM OF BID NO. 31, CONTAINED THE FOLLOWING PROVISION RELATIVE TO SAID DISCOUNT TO BE ALLOWED:

DISCOUNT WILL BE ALLOWED FOR PROMPT PAYMENT AS STATED IN THE SCHEDULES.

(TIME WILL BE COMPUTED * * * FROM DATE OF DELIVERY AT DESTINATION OR PORT OF EMBARKATION WHEN FINAL INSPECTION AND ACCEPTANCE ARE AT THOSE POINTS, OR FROM DATE CORRECT BILL OR VOUCHER PROPERLY CERTIFIED BY THE CONTRACTOR IS RECEIVED IF THE LATTER DATE IS LATER THAN THE DATE OF DELIVERY.)

THUS, IT APPEARS THAT UNDER THE TERMS OF THE CONTRACT THE GOVERNMENT WAS ENTITLED TO A 2 PERCENT DISCOUNT FROM THE STIPULATED BID PRICES OF $74, $95, AND $98 PER M. FEET FOR THE THREE KINDS OF WHITE ASH LUMBER DELIVERED NOVEMBER 24, 1930, IF PAYMENT FOR SAID LUMBER WAS MADE WITHIN 10 DAYS FROM THE DATE OF THE GOVERNMENT'S RECEIPT OF THE CORRECT INVOICE, BILL, OR VOUCHER THEREFOR, PROPERLY CERTIFIED BY THE CONTRACTOR, IF SUCH DATE WAS LATER THAN THE DATE OF DELIVERY OF THE LUMBER. THE EVIDENCE SHOWS THAT THE SHIPMENT OF LUMBER WAS DELIVERED TO AND ACCEPTED BY THE GOVERNMENT ON NOVEMBER 24, 1930; THAT CONTRACTOR'S ORIGINAL INVOICE THEREFOR, DATED NOVEMBER 20, 1930, HAVING BEEN FOUND BY THE CONTRACTING OFFICER TO BE INCORRECT WAS RETURNED TO THE CONTRACTOR FOR CORRECTION ON DECEMBER 6, 1930; THAT CONTRACTOR RESUBMITTED SAID ORIGINAL INVOICE, NOT CORRECTED, AND AGAIN SAME WAS RETURNED TO THE CONTRACTOR FOR CORRECTION ON DECEMBER 12, 1930; THAT A CORRECT INVOICE OF THE SAID SHIPMENT, PROPERLY CERTIFIED BY THE CONTRACTOR, WAS THEREAFTER SUBMITTED AND SAME WAS RECEIVED BY THE CONTRACTING OFFICER ON DECEMBER 15, 1930; AND THAT PAYMENT FOR THE LUMBER FURNISHED WAS MADE TO THE CONTRACTOR BY CHECK DATED DECEMBER 23, 1930, FOR $1,128.57, WHICH SAID CHECK APPEARS TO HAVE BEEN RECEIVED BY CONTRACTOR ON DECEMBER 24, 1930.

INASMUCH AS THE PAYMENT FOR THE LUMBER DELIVERED BY CONTRACTOR ON NOVEMBER 24, 1930, APPEARS TO HAVE BEEN MADE WITHIN 10 DAYS FROM THE DATE THE CONTRACTOR'S CORRECT INVOICE THEREFOR WAS RECEIVED BY THE CONTRACTING OFFICER, THE DEDUCTION OF THE 2 PERCENT DISCOUNT FROM SAID CONTRACT PRICE, AS ABOVE SHOWN, APPEARS TO HAVE BEEN IN ACCORDANCE WITH THE TERMS OF THE CONTRACT, AND, THEREFORE, LEGAL AND PROPER.

THE RESPONSIBILITY FOR PROMPTLY FURNISHING CORRECT INVOICE, OR BILL, FOR DELIVERIES UNDER THE CONTRACT WAS THAT OF THE CONTRACTOR, AND ITS CONTENTION THAT THE ERRORS IN THE ORIGINAL INVOICE DID NOT JUSTIFY AN EXTENSION OF THE DISCOUNT PERIOD IS NOT TENABLE, IN VIEW OF THE TERMS OF THE CONTRACT WITH REFERENCE TO DISCOUNTS, AS ABOVE SHOWN. SEE 9 COMP. GEN. 161.

RELATIVE TO CONTRACTOR'S CONTENTION THAT THE 2 PERCENT DISCOUNT WAS IMPROPERLY CHARGED BECAUSE THE PAYMENT WAS NOT MADE WITHIN 10 DAYS FROM THE DATE OF DELIVERY, THERE WOULD APPEAR TO BE NO MERIT IN SUCH CONTENTION, IN VIEW OF THE TERMS OF THE CONTRACT AS TO THE ALLOWANCE OF DISCOUNTS FOR PROMPT PAYMENT, AS ABOVE STATED.

ACCORDINGLY, UPON REVIEW, THE DISALLOWANCE OF THE CLAIM MUST BE, AND IS, SUSTAINED.