B-121012, SEPTEMBER 13, 1954, 34 COMP. GEN. 123

B-121012, SEPTEMBER 13, 1954, 34 COMP. GEN. 123

CONTRACTS - DISCOUNTS - COMMENCEMENT OF DISCOUNT PERIOD UNDER A CONTRACT WHICH PROVIDED A DISCOUNT FOR PAYMENTS MADE WITHIN 20 DAYS FROM DELIVERY OF SUPPLIES OR FROM RECEIPT BY THE GOVERNMENT PURCHASING OFFICE OF A "CORRECT" AND PROPERLY CERTIFIED VOUCHER, WHICHEVER DATE WAS LATER, DISCOUNTS WERE PROPERLY APPLIED TO PAYMENTS MADE WITHIN 20 DAYS AFTER RECEIPT OF THE CONTRACTOR'S INVOICE WHICH WAS SUBMITTED AFTER CONCLUSION OF CONTRACT NEGOTIATIONS WHICH DETERMINED THE CORRECT UNIT PRICE, EVEN THOUGH THE SUPPLIES HAD BEEN DELIVERED SEVERAL MONTHS PRIOR TO DATE OF PAYMENT.

ACTING COMPTROLLER GENERAL KELLER TO SOUTHERN ATHLETIC COMPANY, INC., SEPTEMBER 13, 1954:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF JUNE 18, 1954, REQUESTING REVIEW OF SETTLEMENT DATED JUNE 11, 1954, WHICH DISALLOWED YOUR CLAIM FOR REFUND OF DISCOUNT DEDUCTED IN THE SUM OF $681.71 IN MAKING PAYMENT TO YOU FOR A QUANTITY OF PARKA LINERS FURNISHED THE DEPARTMENT OF THE ARMY PURSUANT TO CONTRACT NO. DA-30-280-QM-22977, DATED DECEMBER 29, 1951, AS AMENDED.

THE FACTS PERTINENT TO THE MATTER ARE RECITED IN DETAIL IN THE SETTLEMENT AND, THEREFORE, NEED NOT BE REPEATED HEREIN.

YOU CONTEND, IN SUBSTANCE, THAT THE CONDITIONS OF YOUR DISCOUNT OFFER OF ONE PERCENT, 20 DAYS, AS RECITED IN THE CONTRACT, WERE NOT MET BY THE GOVERNMENT AND, THEREFORE, IT WAS NOT ENTITLED TO THE DISCOUNT OF $681.71 DEDUCTED FROM YOUR INVOICE DATED JUNE 1, 1953, PAID BY CHECK DATED JUNE 4, 1953. THE PRIMARY BASIS FOR SUCH CONTENTION IS THAT, DUE TO SUPERVENING NEGOTIATIONS CONDUCTED BY THE PARTIES AS TO THE CORRECT UNIT PRICE PAYABLE FOR THE ITEMS, YOU DID NOT RECEIVE PAYMENT FOR SEVERAL MONTHS SUBSEQUENT TO THE TIME OF ACTUAL DELIVERY OF THE SUPPLIES TO THE GOVERNMENT.

WITHOUT DISPUTING THE ACCURACY OF THE FACTS OR CIRCUMSTANCES AS RELATED BY YOU, MANIFESTLY YOUR POSITION IN THE MATTER OVERLOOKS THE EXPRESS CONDITION OF THE CONTRACT WHICH CLEARLY DEFINES THE MANNER IN WHICH TIME WILL BE COMPUTED FOR PURPOSES OF DISCOUNT. ARTICLE 3 (B) OF THE CONTRACT CONDITIONS PROVIDES FOR THE COMPUTING OF TIME FOR SUCH PURPOSE EITHER FROM DATE OF DELIVERY OF THE SUPPLIES, OR FROM DATE OF RECEIPT IN THE GOVERNMENT PURCHASING OFFICE OF YOUR "CORRECT" AND PROPERLY CERTIFIED INVOICE, WHICHEVER HAPPENS TO BE THE "LATER" DATE. THUS, EVEN THOUGH THE ARTICLES WERE DELIVERED SEVERAL MONTHS PRIOR TO THE DATE OF PAYMENT OF YOUR INVOICE DATED JUNE 1, 1953, THE 20-DAY DISCOUNT PERIOD SPECIFIED IN YOUR CONTRACT DID NOT COMMENCE TO RUN UNTIL JUNE 2, 1953, WHICH WAS THE DATE OF RECEIPT OF YOUR "CORRECT" INVOICE, REVISED TO CONFORM WITH THE PRICE INCREASES AUTHORIZED IN MODIFICATIONS NOS. 2, 4 AND 5. INASMUCH AS PAYMENT THEREON WAS MADE TWO DAYS LATER, OR ON JUNE 4, 1953, IT IS APPARENT THAT THE DISCOUNT WAS EARNED AND PROPERLY WAS FOR DEDUCTION FROM THE INVOICE.