A-74689, AUGUST 13, 1938, 18 COMP. GEN. 155

A-74689: Aug 13, 1938

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CONTRACTS - DISCOUNTS - INVOICE CORRECTION DELAYS WHERE THE CONTRACTS INVOLVED CONTAIN THE USUAL PROVISION THAT TIME IN CONNECTION WITH DISCOUNT OFFERED WOULD BE COMPUTED FROM DATE OF DELIVERY OR FROM DATE CORRECT BILL OR VOUCHER PROPERLY CERTIFIED WAS RECEIVED. WHICHEVER IS THE LATER. PAYMENT IS MADE WITHIN THE REQUIRED TIME AFTER THE CORRECTION OF THE INVOICES. ADJUSTMENT OF THE DISCOUNT DEDUCTION IS UNAUTHORIZED NOTWITHSTANDING THE CLAIMED DELAY IN PAYMENT. 1938: THERE IS BEFORE THIS OFFICE FOR CONSIDERATION YOUR LETTER OF AUGUST 26. THE RESPECTIVE CONTRACTS CONTAINED THE USUAL PROVISION THAT TIME IN CONNECTION WITH DISCOUNT OFFERED WOULD BE COMPUTED FROM DATE OF DELIVERY OR FROM DATE CORRECT BILL OR VOUCHER PROPERLY CERTIFIED WAS RECEIVED.

A-74689, AUGUST 13, 1938, 18 COMP. GEN. 155

CONTRACTS - DISCOUNTS - INVOICE CORRECTION DELAYS WHERE THE CONTRACTS INVOLVED CONTAIN THE USUAL PROVISION THAT TIME IN CONNECTION WITH DISCOUNT OFFERED WOULD BE COMPUTED FROM DATE OF DELIVERY OR FROM DATE CORRECT BILL OR VOUCHER PROPERLY CERTIFIED WAS RECEIVED, WHICHEVER IS THE LATER, AND PAYMENT IS MADE WITHIN THE REQUIRED TIME AFTER THE CORRECTION OF THE INVOICES, ADJUSTMENT OF THE DISCOUNT DEDUCTION IS UNAUTHORIZED NOTWITHSTANDING THE CLAIMED DELAY IN PAYMENT, THE TIMELY FURNISHING OF THE GOVERNMENT INSPECTION REPORTS BEING IN THEMSELVES NOTICE OF THE ERRORS IN BILLING WITHOUT ALSO REQUIRING THE RETURN OF THE INCORRECT INVOICES, AND THE DATE OF ISSUANCE OF THE CHECKS, RATHER THAN THE DATE RECEIVED BY THE CONTRACTOR, BEING FOR CONSIDERATION AS THE DATE OF PAYMENT IN CASES OF THIS NATURE.

ACTING COMPTROLLER GENERAL ELLIOTT TO THE OZAN LUMBER CO., AUGUST 13, 1938:

THERE IS BEFORE THIS OFFICE FOR CONSIDERATION YOUR LETTER OF AUGUST 26, 1937, PROTESTING THE DETERMINATIONS BY THIS OFFICE OF THE PROPER DISCOUNTS TO BE TAKEN IN CONNECTION WITH PAYMENTS UNDER CONTRACTS W 461-ENG-4280, 5096, 5056, 4400, AND 5379 OF AUGUST 16, 1932, JUNE 6, 1933, MAY 29, 1933, SEPTEMBER 15, 1932, AND SEPTEMBER 14, 1933, RESPECTIVELY.

THE RESPECTIVE CONTRACTS CONTAINED THE USUAL PROVISION THAT TIME IN CONNECTION WITH DISCOUNT OFFERED WOULD BE COMPUTED FROM DATE OF DELIVERY OR FROM DATE CORRECT BILL OR VOUCHER PROPERLY CERTIFIED WAS RECEIVED, WHICHEVER WAS THE LATER. IN CONNECTION WITH THE MAJORITY OF PAYMENTS UNDER THESE CONTRACTS, IT APPEARS THAT THE INVOICES AS ORIGINALLY SUBMITTED BY YOU FAILED TO CORRESPOND WITH THE INSPECTION REPORTS COVERING THE MATERIALS IN QUESTION WITH THE RESULT THAT CERTAIN ADJUSTMENTS WERE NECESSARY IN ORDER TO MAKE THE BILLS CORRECT. IN MANY INSTANCES CONSIDERABLE TIME ELAPSED BETWEEN THE DATE OF RECEIPT OF THE ORIGINAL INVOICE AND DATE WHEN THE INVOICE FINALLY WAS CORRECTED AND MADE READY FOR PAYMENT. IT IS YOUR CONTENTION THAT THIS DELAY WAS LARGELY ATTRIBUTABLE TO THE GOVERNMENT AND THAT THE TIME CONSUMED BY YOU IN MAKING THE ,NECESSARY CORRECTIONS AND SECURING THE O.K. OF OUR REPRESENTATIVE WAS NEGLIGIBLE.'

IT APPEARS TO BE YOUR UNDERSTANDING THAT WHEN INSPECTION REPORTS WERE RECEIVED BY THE UNITED STATES ENGINEER'S OFFICE AT KANSAS CITY, MO., THE ACCOUNTING OFFICIALS THERE MADE THE NECESSARY CORRECTIONS IN THE INVOICES. "THEN," ACCORDING TO YOUR LETTER OF AUGUST 26, 1937, "WHEN THEY HAVE PREPARED THE VOUCHERS TO THE BASIS OF CORRECTED INVOICES, THEY CALL UP OUR REPRESENTATIVE, MR. A. T. BRINK, OF KANSAS CITY, AND TELL HIM THAT THE VOUCHERS ARE READY FOR SIGNATURE.' YOUR LETTER CONTINUES:

* * * MR. BRINK HAS A RUNNING AUTHORITY TO SIGN VOUCHERS AND O.K. CORRECTED INVOICES, ETC., FOR OUR ACCOUNT. VERY LITTLE TIME IS CONSUMED IN HIS GETTING OVER TO THE GOVERNMENT ACCOUNTING OFFICE IN KANSAS CITY TO O.K. CORRECTED INVOICES AND/OR SIGN VOUCHERS AFTER HE HAS BEEN CALLED FOR THAT PURPOSE. GENERALLY SPEAKING, THIS IS ACCOMPLISHED WITHIN AN HOUR OR TWO AFTER HE HAS RECEIVED NOTICE FOR SUCH.

COMMENTING UPON YOUR VERSION OF THE MATTER AS THUS QUOTED, THE DISTRICT ENGINEER AT KANSAS CITY STATES IN FOURTH ENDORSEMENT OF NOVEMBER 27, 1937, THAT "THE NOTICE OF AUTHORIZATION OF MR. A. T. BRINK TO SIGN VOUCHERS ON BEHALF OF THE OZAN LUMBER CO. WAS NOT RECEIVED BY THIS OFFICE UNTIL OCTOBER 3, 1933.' THE RECORD INDICATES THAT UNDER FOUR OF THE CONTRACTS IN QUESTION--- NOS. W-461-ENG-5096, 4400, 4280, AND 5056--- ALL PAYMENTS, EXCEPT FINAL VOUCHER PAYMENTS AND IN SOME INSTANCES PAYMENTS COVERING CULLS, WERE MADE PRIOR TO OCTOBER 3, 1933, OR PRIOR TO RECEIPT OF THE AUTHORIZATION OF MR. BRINK TO APPROVE VOUCHERS OF YOUR FIRM. THE DISTRICT ENGINEER CONCLUDES FROM THESE FACTS THAT "IT IS THEREFORE BELIEVED THAT ALL VOUCHERS UNDER CONTRACTS NOS. W-461-ENG-4280, 4400, 5056, AND 5096 WERE TRANSMITTED TO THE CONTRACTOR'S HOME OFFICE, PRESCOTT, ARK., FOR SIGNATURE.'

THE WAR DEPARTMENT ALSO ADVISES THAT COPIES OF THE INSPECTION REPORTS ISSUED AT DESTINATION BY GOVERNMENT INSPECTORS WERE MAILED TO YOUR FIRM "ON THE DATES ON WHICH THE ORIGINAL INSPECTION REPORTS WERE FURNISHED THE OFFICE CERTIFYING THE INVOICE AS TO RECEIPT OF SHIPMENT.' A COMPARISON OF CHARGES MADE ON YOUR INVOICES, WITH THE MATERIALS SHOWN ON THESE INSPECTION REPORTS TO HAVE BEEN ACTUALLY RECEIVED AND ACCEPTED, CLEARLY INDICATED TO YOU THE ERRORS IN BILLING THAT EXISTED. THUS, IT IS AFFIRMATIVELY SHOWN THAT YOU WERE PROMPTLY MADE AWARE OF ANY ERRORS IN YOUR INVOICES. SINCE THE CONTRACT PLAINLY STATED THAT DISCOUNT SHOULD NOT BEGIN TO RUN PRIOR TO RECEIPT OF A CORRECT INVOICE, YOU WERE ON NOTICE FROM THE MOMENT YOU RECEIVED A COPY OF AN INSPECTION REPORT WHICH DIFFERED FROM YOUR INVOICES THAT A CORRECT INVOICE HAD NOT BEEN FURNISHED. THE PRINCIPAL PURPOSE SOUGHT TO BE ACCOMPLISHED BY RETURNING YOUR INVOICES FOR CORRECTION WAS TO PLACE YOU ON NOTICE THAT THEY WERE IN ERROR AND SINCE YOU HAD ACCESS TO THIS INFORMATION FROM THE COPIES OF INSPECTION REPORTS, JUST AS SOON AS YOU COULD HAVE RECEIVED IT THROUGH A PROMPT RETURN OF YOUR ORIGINAL BILL, IT APPEARS CLEAR THAT THE PRINCIPAL CAUSE OF DELAY IN RECEIPT BY THE GOVERNMENT OF A CORRECT INVOICE WAS THE RESULT OF YOUR FAILURE TO ACT UPON INFORMATION AVAILABLE TO YOU.

YOU STATE IN YOUR LETTER THAT "WE HAVE NEVER RENDERED ANY CORRECTED INVOICES ON THIS MATERIAL, NEITHER HAVE WE EVER RECEIVED A REQUEST FOR ONE.' YOUR FAILURE TO RENDER A CORRECTED INVOICE WHEN IT BECAME KNOWN TO YOU THAT THE OLD ONE WAS INCORRECT SEEMS TO HAVE BEEN A REAL CAUSE OF THE DELAY IN QUESTION. THE FACT THAT THE GOVERNMENT DID NOT FORMALLY REQUEST YOU TO FURNISH THAT WHICH YOU ALREADY KNEW MUST BE FURNISHED BEFORE THE TIME WITHIN WHICH DISCOUNT MIGHT BE TAKEN WOULD BEGIN TO RUN, DOES NOT SUPPORT YOUR CONCLUSION THAT THE GOVERNMENT WAS RESPONSIBLE FOR THE DELAY AND THEREFORE NOT ENTITLED TO DISCOUNT.

YOU ALSO INVITE ATTENTION TO DISCREPANCIES BETWEEN YOUR STATEMENTS AND THOSE OF THE GOVERNMENT AS TO THE DATES WHEN THESE VARIOUS ACCOUNTS WERE PAID, AND EXPRESS THE VIEW THAT DATE OF PAYMENT SHOULD BE CONSIDERED AS THE DATE WHEN THE CHECKS WERE ACTUALLY RECEIVED IN YOUR OFFICE. DECISIONS OF THIS OFFICE--- AS WELL AS THOSE OF THE COURT OF CLAIMS--- ARE TO THE EFFECT THAT IN CASES OF THIS NATURE THE DATE OF ISSUANCE OF THE CHECK MUST BE HELD TO BE THE DATE OF PAYMENT. A 80067, JULY 13, 1937; LLOYD-SMITH V. UNITED STATES, 71 CT.CLS. 74-80; AMERICAN POTASH CO. V. UNITED STATES, 80 CT.CLS. 160, 165; MORGENTHAU ET AL. V. FIDELITY AND DEPOSIT CO. OF MARYLAND, 94 FED./2D) 632.

UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE IT MUST BE HELD THAT THE DISCOUNT COMPUTATIONS MADE UNDER THE CONTRACTS IN QUESTION AND OF WHICH YOU WERE INFORMED BY LETTER OF JULY 12, 1937, WERE CORRECT AND MUST BE SUSTAINED.