A-3942, AUGUST 14, 1924, 4 COMP. GEN. 177

A-3942: Aug 14, 1924

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THE CONTRACTOR WAS OVERPAID BY A DISBURSING OFFICER. THE FACT THAT SEVERAL YEARS HAVE ELAPSED SINCE THE OVERPAYMENT WAS MADE IS IMMATERIAL. WAS SET OFF TO APPLY AGAINST AN OVERPAYMENT MADE FOR COAL ON VOUCHER 58. ADJUSTMENTS WERE TO BE MADE FOR VARIATIONS IN THE COAL DELIVERED ABOVE OR BELOW A CERTAIN PERCENTAGE OF THE GUARANTY. THE CONTRACTOR WAS OVERPAID THE SUM OF $29.70. WHICH AMOUNT WAS WITHHELD IN THE SETTLEMENT IN QUESTION TO WHICH OBJECTION HAS BEEN MADE. STATES: THIS DELIVERY WAS MADE ON A CONTRACT FOR TWELVE MONTHS. THIS COMPANY WAS UNDER CONTRACT AND BOND FOR THE FAITHFUL PERFORMANCE OF THE REQUIREMENTS OF SAID CONTRACT. NOTHING WAS SAID ABOUT ANY PENALTY UNTIL LATE IN THE YEAR OF 1923.

A-3942, AUGUST 14, 1924, 4 COMP. GEN. 177

ACCOUNTING - SET-OFF - CONTRACTS THE UNITED STATES HAS A COMMON-LAW RIGHT TO SET OFF AGAINST AMOUNTS DUE A CONTRACTOR ANY INDEBTEDNESS OF THE CONTRACTOR TO THE UNITED STATES, REGARDLESS OF THE LAPSE OF TIME BETWEEN TRANSACTIONS. WHERE, THROUGH AN ERROR IN CALCULATING THE VALUE OF COAL FURNISHED THE GOVERNMENT UNDER A CONTRACT, THE CONTRACTOR WAS OVERPAID BY A DISBURSING OFFICER, THE AMOUNT THUS OVERPAID MAY BE PROPERLY SET OFF AGAINST AN AMOUNT DUE THE CONTRACTOR FOR FURNISHING ICE TO ANOTHER DEPARTMENT OF THE GOVERNMENT, AND THE FACT THAT SEVERAL YEARS HAVE ELAPSED SINCE THE OVERPAYMENT WAS MADE IS IMMATERIAL.

DECISION BY COMPTROLLER GENERAL MCCARL, AUGUST 14, 1924:

THE EXPORT FUEL AND ICE CO. REQUESTED, JULY 7, 1924, REVIEW OF THAT PART OF SETTLEMENT NO. 032988, DATED JUNE 19, 1924, WHEREIN THE SUM OF $29.70, OF THE AMOUNT OF $75.15 ALLOWED IN PAYMENT FOR ICE FURNISHED THE POST OFFICE AND COURTHOUSE AT PENSACOLA DURING JANUARY, FEBRUARY, AND MARCH, 1924, WAS SET OFF TO APPLY AGAINST AN OVERPAYMENT MADE FOR COAL ON VOUCHER 58, ACCOUNTS OF CAPT. J. E. WYKE, A.Q.M., FOR THE MONTH OF APRIL, 1917.

THE OVERPAYMENT IN QUESTION AROSE BY REASON OF THE FAILURE OF CAPTAIN WYKE TO MAKE PROPER DEDUCTION FROM A PAYMENT MADE FOR COAL FURNISHED FORT BARRANCAS, FLA., UNDER CONTRACT DATED JUNE 15, 1916, FOR SUPPLYING COAL TO SAID POST DURING THE FISCAL YEAR ENDING JUNE 30, 1917. UNDER SAID CONTRACT THE CONTRACTOR AGREED TO DELIVER BITUMINOUS LUMP COAL TO FORT BARRANCAS AT $3.20 PER TON, GUARANTEED TO CONTAIN, AS SHOWN BY ANALYSIS, B.T.U. 14,650, ASH NOT TO EXCEED 5 PERCENT, AND MOISTURE NOT TO EXCEED 2 PERCENT. ADJUSTMENTS WERE TO BE MADE FOR VARIATIONS IN THE COAL DELIVERED ABOVE OR BELOW A CERTAIN PERCENTAGE OF THE GUARANTY.

ON ACCOUNT OF AN ERROR IN CALCULATING THE AMOUNT DUE BY REASON OF A DEFICIENCY IN B.T.U. CONTENTS IN 210.25 TONS DELIVERED MARCH 12, 1917, THE CONTRACTOR WAS OVERPAID THE SUM OF $29.70, WHICH AMOUNT WAS WITHHELD IN THE SETTLEMENT IN QUESTION TO WHICH OBJECTION HAS BEEN MADE.

IN CONNECTION WITH THIS MATTER, THE CONTRACTOR IN LETTER DATED JULY 5, 1924, STATES:

THIS DELIVERY WAS MADE ON A CONTRACT FOR TWELVE MONTHS, THIS COMPANY WAS UNDER CONTRACT AND BOND FOR THE FAITHFUL PERFORMANCE OF THE REQUIREMENTS OF SAID CONTRACT. NOTHING WAS SAID ABOUT ANY PENALTY UNTIL LATE IN THE YEAR OF 1923, ABOUT SIX YEARS AFTER THE MATTER WAS HISTORY. OUR BOND IS INVALID, THE MINES FROM WHICH WE PURCHASED THE COAL ARE CLOSED AND THIS COMPANY IS OWNED BY DIFFERENT CAPITAL, SO IT SEEMS UTTERLY RIDICULOUS TO COME TO US TODAY, SEVEN YEARS AFTER THE CAR OF COAL WAS DELIVERED AND ASK US TO MAKE PAYMENT FOR AN ERROR MADE BY THE WAR DEPARTMENT REPRESENTATIVE.

WHEN THE VOUCHER WAS RECEIVED FOR AUDIT IN THE LATTER PART OF 1917 THE AUDITOR FOR THE WAR DEPARTMENT (NOW THE MILITARY DIVISION OF THIS OFFICE) SUSPENDED CREDIT FOR THE AMOUNT OF THE OVERPAYMENT IN THE DISBURSING OFFICER'S ACCOUNTS, AND WHETHER ATTEMPT WAS MADE BY THE DISBURSING OFFICER TO RECTIFY THE MISTAKE BY SECURING A REFUND OR OTHERWISE IMMEDIATELY AFTER RECEIPT OF NOTICE THAT CREDIT FOR THE OVERPAYMENT HAD BEEN WITHHELD IS NOT SHOWN BY THE EVIDENCE ON FILE. THE RECORD DOES SHOW, HOWEVER, THAT IN JANUARY, 1924, THE CONTRACTOR WAS REQUESTED BY THE WAR DEPARTMENT TO REFUND THE AMOUNT THUS OVERPAID, BUT IT REFUSED TO DO SO ON THE GROUND THAT "IF ANY ERROR OF EXTENSION WAS MADE IN THE OFFICE OF THE POST QUARTERMASTER AND WAS NOT DISCOVERED BY ANYONE FOR A PERIOD OF NEARLY SEVEN YEARS, WE DO NOT FEEL THAT IT IS INCUMBENT ON US TO MAKE THE DEPARTMENT ANY PAYMENT AT THIS TIME.'

THE QUESTION OF WHETHER OR NOT ANY DEMAND REQUESTING A REFUND OF THE AMOUNT OF THE OVERPAYMENT WAS MADE ON THE CONTRACTOR SHORTLY AFTER THE OVERPAYMENT WAS DISCOVERED IS NOT MATERIAL. UNDER THE TERMS OF THE CONTRACT THE CONTRACTOR WAS LIABLE FOR ANY DEFICIENCY IN THE HEATING VALUE OF THE COAL BELOW THAT SPECIFIED, AND THE OVERPAYMENT WAS OCCASIONED BY REASON OF AN ERRONEOUS CALCULATION OF THE VALUE OF B.T.U. CONTENTS OF THE COAL DELIVERED. IT IS NO EXCUSE FOR THE CONTRACTOR TO CONTEND THAT NO DEMAND HAVING BEEN MADE FOR A REFUND FOR NEARLY SEVEN YEARS THAT IT IS NOT NOW LIABLE FOR THE OVERPAYMENT. THE UNITED STATES HAS AT ANY TIME THE COMMON-LAW RIGHT TO SET OFF AGAINST AMOUNTS DUE CREDITORS TO THE GOVERNMENT FROM SAID CREDITORS AND THE CONTENTION CAN NOT BE ACCEPTED TO DEFEAT THIS RIGHT. THE ACTION TAKEN IN SETTING OFF THE AMOUNT OF $27.70 AGAINST THE AMOUNT FOUND DUE THE COMPANY FOR ICE FURNISHED THE GOVERNMENT APPEARS TO HAVE BEEN PROPER AND UPON REVIEW THE SETTLEMENT IS SUSTAINED.