B-127618, APR. 30, 1956

B-127618: Apr 30, 1956

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INC.: REFERENCE IS MADE TO YOUR LETTER OF APRIL 4. ALLEGED TO HAVE BEEN WRONGFULLY TAKEN IN MAKING PAYMENTS TO YOU FOR SUPPLIES FURNISHED THE DEPARTMENT OF THE NAVY UNDER CONTRACT NO. WERE NOT MADE WITHIN THE SPECIFIED DISCOUNT PERIOD OF 20 CALENDAR DAYS. THE DISCOUNTS TAKEN ON SUCH INVOICES WERE NOT EARNED BY THE GOVERNMENT. CLAIM THAT YOU ARE ENTITLED TO A REFUND OF THE DISCOUNTS SO DEDUCTED. WHILE IT IS TRUE YOUR CONTRACT PROVIDED FOR A PRELIMINARY INSPECTION OF THE CONTRACT ARTICLES AT EITHER OF YOUR SAN FRANCISCO OR MILLBRAE PLANTS PRIOR TO SHIPMENT OF THE ITEMS. THE FACT REMAINS THAT BY ITS CLEAR AND UNEQUIVOCAL TERMS YOU ALSO WERE OBLIGATED NOT ONLY TO PACK. YOU WILL NOTE THAT ARTICLE 5.

B-127618, APR. 30, 1956

TO WESTERN SALES AND SUPPLY COMPANY, INC.:

REFERENCE IS MADE TO YOUR LETTER OF APRIL 4, 1956, REQUESTING RECONSIDERATION OF OUR SETTLEMENT OF FEBRUARY 6, 1956, WHICH DISALLOWED YOUR CLAIM FOR REFUND OF DISCOUNTS, AMOUNTING TO $969.86, ALLEGED TO HAVE BEEN WRONGFULLY TAKEN IN MAKING PAYMENTS TO YOU FOR SUPPLIES FURNISHED THE DEPARTMENT OF THE NAVY UNDER CONTRACT NO. N155S 14483, DATED DECEMBER 3, 1954.

IN YOUR COMMUNICATION OF APRIL 4, 1956, AND IN PRIOR CORRESPONDENCE RELATIVE TO THIS MATTER, YOU STRESS THE FACT THAT THE CONTRACT CALLED FOR INSPECTION OF THE MATERIALS AT EITHER OF YOUR PLANTS LOCATED ATSAN FRANCISCO OR MILLBRAE, CALIFORNIA, AND CONTEND THAT SINCE THE PAYMENTS ON YOUR SEVERAL INVOICES RENDERED DURING THE PERIOD MARCH 8 THROUGH MAY 31, 1955, WERE NOT MADE WITHIN THE SPECIFIED DISCOUNT PERIOD OF 20 CALENDAR DAYS, COMPUTED FROM THE RESPECTIVE DATES OF THE PLANT INSPECTIONS, THE DISCOUNTS TAKEN ON SUCH INVOICES WERE NOT EARNED BY THE GOVERNMENT. YOU, THEREFORE, CLAIM THAT YOU ARE ENTITLED TO A REFUND OF THE DISCOUNTS SO DEDUCTED.

WHILE IT IS TRUE YOUR CONTRACT PROVIDED FOR A PRELIMINARY INSPECTION OF THE CONTRACT ARTICLES AT EITHER OF YOUR SAN FRANCISCO OR MILLBRAE PLANTS PRIOR TO SHIPMENT OF THE ITEMS, THE FACT REMAINS THAT BY ITS CLEAR AND UNEQUIVOCAL TERMS YOU ALSO WERE OBLIGATED NOT ONLY TO PACK, CRATE AND MARK THE PACKAGES ACCORDING TO THE REQUIREMENTS OF THE SPECIFICATIONS, BUT ALSO TO DELIVER THE ARTICLES IN GOOD AND ACCEPTABLE CONDITION AT THE VARIOUS DESTINATION POINTS SPECIFIED. SEE ITEM NO. 104 3.1. IN ADDITION THERETO, YOU WILL NOTE THAT ARTICLE 5, GENERAL PROVISIONS OF THE CONTRACT, EXPRESSLY PROVIDED FOR A "FINAL ACCEPTANCE OR REJECTION OF THE SUPPLIES * * * AFTER DELIVERY" AT POINTS OF DESTINATION. THE SAID ARTICLE ALSO PROVIDED FOR THE REJECTION OF THOSE ARTICLES NOT FOUND TO BE IN CONFORMITY WITH THE CONTRACT REQUIREMENTS. HENCE, UNDER NO REASONABLE INTERPRETATION OF THE CONTRACT TERMS AND CONDITIONS COULD IT BE SAID THAT YOUR CONTRACTUAL OBLIGATIONS WITH RESPECT TO THE MATTERS OF DELIVERY OF THE ITEMS AND YOUR RESPONSIBILITY THEREFOR, CEASED IMMEDIATELY UPON THEIR INSPECTION AND PRELIMINARY ACCEPTANCE AT YOUR PLANTS.

MOREOVER, THE GOVERNMENT'S RIGHT TO THE DISCOUNTS IN QUESTION IS CLEARLY SUPPORTED BY ARTICLE 3, TERMS AND CONDITIONS OF THE CONTRACT, APPEARING ON THE REVERSE SIDE OF FORM NO. 30, INVITATION AND BID, WHICH READS:

"/B) IN CONNECTION WITH ANY DISCOUNT OFFERED, TIME WILL BE COMPUTED FROM DATE OF DELIVERY OF THE SUPPLIES TO CARRIER WHEN DELIVERY AND ACCEPTANCE ARE AT POINT OF ORIGIN, OR FROM DATE OF DELIVERY AT DESTINATION OR PORT OF EMBARKATION WHEN DELIVERY AND ACCEPTANCE ARE AT EITHER OF THOSE POINTS, OR FROM DATE CORRECT INVOICE OR VOUCHER (PROPERLY CERTIFIED BY THE CONTRACTOR) IS RECEIVED IN THE OFFICE SPECIFIED BY THE GOVERNMENT IF THE LATTER DATE IS LATER THAN THE DATE OF DELIVERY.'

HAD THE DELIVERY REQUIREMENTS OF YOUR CONTRACT BEEN SATISFIED MERELY BY THE PRELIMINARY ACCEPTANCE OF THE ARTICLES AT YOUR PLANTS, OR BY DELIVERY OF THE INSPECTED ITEMS TO THE CARRIER AT POINTS OF ORIGIN, THEN THERE WOULD POSSIBLY BE SOME MERIT TO YOUR CONTENTION THAT THE DISCOUNTS TAKEN ON PAYMENTS MADE MORE THAN 20 DAYS THEREAFTER WERE NOT EARNED. BUT SUCH IS NOT THE CASE HERE. UNDER THE TERMS OF YOUR CONTRACT, THE CONSIDERATION AGREED TO BE PAID BY THE GOVERNMENT FOR YOUR SERVICES COVERED NOT ONLY DELIVERY AND INSPECTION OF THE ARTICLES AT YOUR PLANTS, BUT IT ALSO EMBRACED SUCH ADDITIONAL SERVICES AS PACKING, CRATING, MARKING AND DELIVERY OF THE ARTICLES IN GOOD AND SATISFACTORY CONDITION AT THE SPECIFIED POINTS OF ULTIMATE DESTINATION. HENCE, FINAL DELIVERY AND ACCEPTANCE OF THE ARTICLES WERE NOT ACCOMPLISHED, NOR DID YOU BECOME ENTITLED TO PAYMENT ON ANY OF YOUR INVOICES, UNTIL YOUR COMPLETE PERFORMANCE OBLIGATION HAD BEEN FULFILLED. UNDER THE PLAIN TERMS OF THE DISCOUNT PROVISIONS ABOVE QUOTED, THE PROMPT PAYMENT DISCOUNT OFFERED BY YOU WAS EARNED BY THE GOVERNMENT IN THOSE INSTANCES WHERE PAYMENT ON ANY OF YOUR INVOICES WAS MADE WITHIN 20 CALENDAR DAYS EITHER FROM DATE OF DELIVERY OF THE ARTICLES AT DESTINATION, OR FROM DATE OF RECEIPT OF YOUR COVERING INVOICE AT SUCH POINT, WHICHEVER WAS LATER. SEE 30 COMP. GEN. 10.

THE RECORD IN THE CASE DISCLOSES THAT, WITH THE POSSIBLE EXCEPTION OF YOUR INVOICE NO. 3940, THE LATE RECEIPT OF WHICH IS UNEXPLAINED, THE DATE OF DELIVERY OF EACH GROUP OF ITEMS AT DESTINATION WAS LATER IN POINT OF TIME, THAN THE DATE OF RECEIPT AT THE DESTINATION POINT OF YOUR COVERING INVOICE, AND THUS, THE 20-DAY DISCOUNT PERIOD WAS PROPERLY COMPUTED FROM SUCH LATER DATE IN ACCORDANCE WITH THE EXPRESS TERMS OF YOUR CONTRACT. FURTHER, THE RECORD SHOWS THAT THE PAYMENT MADE ON EACH OF SUCH INVOICES WAS MADE WITHIN 20 CALENDAR DAYS AFTER ARRIVAL OF EACH CONSIGNMENT AT THE SPECIFIED DESTINATION POINT, THUS CLEARLY INDICATING THAT THE DISCOUNTS DEDUCTED IN CONNECTION THEREWITH WERE EARNED BY THE GOVERNMENT.

CONCERNING YOUR INVOICE NO. 3940, DATED MARCH 31, 1955, THE RECORD SHOWS THAT WHILE THE CONSIGNMENT ARRIVED AT THE NAVAL SHIPYARD, BROOKLYN, NEW YORK, ON APRIL 20, 1955, THE COVERING INVOICE DID NOT ARRIVE AT SUCH POINT UNTIL JUNE 20, 1955, AND SINCE PAYMENT OF THE ACCOUNT WAS MADE BY THE OAKLAND FINANCE OFFICE ON JULY 7, 1955, OR 17 DAYS AFTER THE DATE OF ITS RECEIPT, IT IS CONSIDERED THAT THE DISCOUNT OF $11.52 WAS EARNED BY THE GOVERNMENT. GENERALLY, IN CASES SUCH AS THIS, WHERE THERE IS A CONTROVERSY AS TO THE CORRECTNESS OF THE FACTS REPORTED BY THE CLAIMANT AND THOSE REPORTED TO US BY THE ADMINISTRATIVE AGENCY CONCERNED, WE ARE LEFT WITH NO ALTERNATIVE BUT TO ACCEPT THE ADMINISTRATIVE VERSION OF THE FACTS, IN THE ABSENCE OF INCONTROVERTIBLE EVIDENCE TO THE CONTRARY. SEE 3 COMP. GEN. 51, 54; 17 8D. 799, 800, AND CASES THERE CITED.

ACCORDINGLY, UPON THE BASIS OF THE FACTS OF RECORD AND THE APPLICABLE LAW, THE ACTION TAKEN IN OUR SETTLEMENT OF FEBRUARY 6, 1956, MUST BE SUSTAINED.