B-129153, OCT. 22, 1956

B-129153: Oct 22, 1956

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TO CINDERELLA FOODS: FURTHER REFERENCE IS MADE TO YOUR LETTER OF AUGUST 23. IT APPEARS THAT DURING PERFORMANCE OF THE CONTRACT A CONSIDERABLE NUMBER OF THE CANS OF PEANUT BUTTER INCLUDED IN A CERTAIN DELIVERY OR DELIVERIES WERE FOUND TO BE IN A DEFECTIVE CONDITION UPON RECEIPT. THE CLAIM WAS ALLOWED IN THE ADJUSTED AMOUNT OF $4. YOU NOW HAVE FILED AN ADDITIONAL CLAIM FOR $692.62 REPRESENTING INTEREST ON THE $4. THE SETTLED RULE THAT THE UNITED STATES IN NOT LIABLE FOR INTEREST EXCEPT AS MAY BE EXPRESSLY PROVIDED BY STATUTE OR LAWFULLY ASSUMED BY CONTRACT IS CLEARLY EXEMPLIFIED IN THE CASES OF ANGARICA V. WITH RESPECT TO YOUR PLEA FOR EQUITABLE CONSIDERATION OF THE MATTER YOU ARE ADVISED THAT THE GENERAL ACCOUNTING OFFICE IS WITHOUT AUTHORITY TO SETTLE CLAIMS OF THIS KIND AGAINST THE UNITED STATES SOLELY ON MORAL OR EQUITABLE GROUNDS.

B-129153, OCT. 22, 1956

TO CINDERELLA FOODS:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF AUGUST 23, 1956, IN REGARD TO YOUR CLAIM FOR $696.62 ARISING OUT OF CONTRACT NO. DA 11-027 QM-56264, DATED APRIL 23, 1953.

UNDER THE CONTRACT YOU AGREED TO FURNISH TO THE VARIOUS DEPARTMENT OF THE ARMY INSTALLATIONS SPECIFIED THEREIN SUBSTANTIAL QUANTITIES OF PEANUT BUTTER FOR A TOTAL CONTRACT PRICE OF $371,902.08. IT APPEARS THAT DURING PERFORMANCE OF THE CONTRACT A CONSIDERABLE NUMBER OF THE CANS OF PEANUT BUTTER INCLUDED IN A CERTAIN DELIVERY OR DELIVERIES WERE FOUND TO BE IN A DEFECTIVE CONDITION UPON RECEIPT. THE DEPARTMENT OF THE ARMY WITHHELD AN AMOUNT OF MONEY TO COVER THE ADJUSTMENT FOR THIS CONDITION. SUBSEQUENTLY, YOU FILED A CLAIM FOR $4,782.82 BY REASON OF THE WITHHOLDING ACTION AND UPON A DETERMINATION THAT THE CAUSE OF THE DEFECT IN THE CANS COULD NOT PROPERLY BE ATTRIBUTED TO YOU, THE CLAIM WAS ALLOWED IN THE ADJUSTED AMOUNT OF $4,195.81. YOU NOW HAVE FILED AN ADDITIONAL CLAIM FOR $692.62 REPRESENTING INTEREST ON THE $4,195.81 AT THE RATE OF 6 PERCENT PER ANNUM FOR 1,010 DAYS, WHICH YOU ALLEGE COVERS THE PERIOD OF DELAY IN MAKING PAYMENT TO YOU OF THE AMOUNT DUE.

IN YOUR LETTER OF AUGUST 23, 1956, YOU MAKE INQUIRY AS TO THE AUTHORITY RELIED UPON BY OUR OFFICE IN THE SETTLEMENT OF JULY 27, 1956, IN DISALLOWING YOUR CLAIM FOR INTEREST. ALSO, YOU CONTEND THAT ASIDE FROM THE LEGAL QUESTION INVOLVED YOU SHOULD BE ENTITLED, IN EQUITY AND GOOD CONSCIENCE, TO RECEIVE A FAIR AMOUNT OF INTEREST IN THE MATTER IN VIEW OF THE PARTICULAR FACTS AND CIRCUMSTANCES INVOLVED.

THE SETTLED RULE THAT THE UNITED STATES IN NOT LIABLE FOR INTEREST EXCEPT AS MAY BE EXPRESSLY PROVIDED BY STATUTE OR LAWFULLY ASSUMED BY CONTRACT IS CLEARLY EXEMPLIFIED IN THE CASES OF ANGARICA V. BAYARD, 127 U.S. 251; UNITED STATES V. NORTH CAROLINA, 136 U.S. 211; UNITED STATES V. VERDIER, 164 U.S. 213; SHECKLES V. DISTRICT OF COLUMBIA, 246 U.S. 338; UNITED STATES V. NORTH AMERICAN TRANSPORTATION AND TRADING COMPANY, 253 U.S. 330; SEABOARD AIR LINE RY. CO. V. UNITED STATES, 261 U.S. 299; BOSTON SAND COMPANY V. UNITED STATES, 278 U.S. 41; UNITED STATES V. WORLEY, 281 U.S. 339; AND SMYTH V. UNITED STATES, 302 U.S. 329.

WITH RESPECT TO YOUR PLEA FOR EQUITABLE CONSIDERATION OF THE MATTER YOU ARE ADVISED THAT THE GENERAL ACCOUNTING OFFICE IS WITHOUT AUTHORITY TO SETTLE CLAIMS OF THIS KIND AGAINST THE UNITED STATES SOLELY ON MORAL OR EQUITABLE GROUNDS. SECTION 305 OF THE BUDGET AND ACCOUNTING ACT OF 1921, 42 STAT. 24, AMENDING SECTION 236, REVISED STATUTES, AUTHORIZES THE GENERAL ACCOUNTING OFFICE TO SETTLE AND ADJUST ALL CLAIMS AND DEMANDS WHATEVER BY THE GOVERNMENT OF THE UNITED STATES OR AGAINST IT. IT CONSISTENTLY HAS BEEN HELD BY THE ACCOUNTING OFFICERS OF THE GOVERNMENT THAT THIS ACT RESTRICTS THEIR JURISDICTION TO A CONSIDERATION AND ALLOWANCE OF CLAIMS WHICH CLEARLY ARE FOR PAYMENT IN ACCORDANCE WITH THE APPLICABLE LAW OR UNDER THE TERMS OF A VALID AGREEMENT EXECUTED PURSUANT TO LAW.