B-130894, MAR. 15, 1957

B-130894: Mar 15, 1957

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GENERAL SERVICES ADMINISTRATION: REFERENCE IS MADE TO YOUR LETTER OF FEBRUARY 28. COVERING DISCOUNT ALLEGED TO HAVE BEEN ERRONEOUSLY DEDUCTED IN MAKING PAYMENT FOR CERTAIN QUANTITIES OF DUPLICATING PAPER FURNISHED THE FEDERAL SUPPLY SERVICE. DELIVERY OF THE SUPPLIES WAS ACCOMPLISHED IN JULY 1956. CLAIM FOR PAYMENT WAS FILED ON THE CONTRACTOR'S INVOICE DATED JULY 20. THE EXTENDED TOTALS WERE LISTED. THERE WAS PRINTED ON THE FACT OF THE CONTRACTOR'S INVOICE. NO DISCOUNT DEDUCTION WAS NOTED ON THE CONTRACTOR'S INVOICE. THE CONTRACTOR WAS NOTIFIED OF APPROVAL OF PAYMENT FOR THE SUPPLIES BUT WAS ADVISED THAT THERE WAS BEING DEDUCTED FROM THE GROSS AMOUNT SHOWN ON THE CONTRACTOR'S INVOICE A CASH DISCOUNT OF 2 PERCENT.

B-130894, MAR. 15, 1957

TO MR. H. A. WILKINSON, AUTHORIZED CERTIFYING OFFICER, GENERAL SERVICES ADMINISTRATION:

REFERENCE IS MADE TO YOUR LETTER OF FEBRUARY 28, 1957, WITH ENCLOSURES, REQUESTING AN ADVANCE DECISION AS TO THE PROPRIETY OF AUTHORIZING PAYMENT ON A VOUCHER FOR $201.38 IN FAVOR OF THE CARPENTER PAPER COMPANY, DENVER, COLORADO, COVERING DISCOUNT ALLEGED TO HAVE BEEN ERRONEOUSLY DEDUCTED IN MAKING PAYMENT FOR CERTAIN QUANTITIES OF DUPLICATING PAPER FURNISHED THE FEDERAL SUPPLY SERVICE, DENVER FEDERAL CENTER, PURSUANT TO CONTRACT NO. GS -08S-8983, DATED MAY 2, 1956.

IT APPEARS THAT IN RESPONSE TO TELEGRAPHIC INVITATIONS ISSUED BY THE FEDERAL SUPPLY SERVICE ON APRIL 10, 1956, THE CLAIMANT SUBMITTED A BID DATED APRIL 12, 1956, WHEREIN IT OFFERED TO SUPPLY ITEMS 12, 13 AND 14 OF THE BIDDING SCHEDULE AT THE SPECIFIED UNIT PRICES OF $1.0836, $1.0836 AND $1.0253 PER REAM, RESPECTIVELY. OPPOSITE THE SPACE PROVIDED ON THE ORIGINAL BID FORM FOR "CASH DISCOUNT TERMS," THE CLAIMANT INSERTED THE WORD "NET.' HOWEVER, IN EXECUTING THE CONFIRMING BID ON STANDARD FORM 33, AND CONTEMPORANEOUS PURCHASE ORDER NO. 56D-11744-1, EACH DATED MAY 2, 1956, THE CONTRACTING OFFICER INADVERTENTLY INSERTED DISCOUNT TERMS OF 2 PERCENT, 30 DAYS. PRIOR TO DELIVERY, THE CONTRACTOR REQUESTED THE CONTRACTING OFFICER TO DELETE THE ERRONEOUS DISCOUNT TERMS INCLUDED IN THE CONFIRMING CONTRACT AND PURCHASE ORDER. THE LATTER COMPLIED WITH THIS REQUEST BY THE ISSUANCE OF AMENDMENT NO. 1, DATED MAY 10, 1956, TO THE CONTRACT, WHICH READ: "DELETE 2 PERCENT-30 DAYS. MAKE ORDER: NET 30 DAYS.'

DELIVERY OF THE SUPPLIES WAS ACCOMPLISHED IN JULY 1956, AND CLAIM FOR PAYMENT WAS FILED ON THE CONTRACTOR'S INVOICE DATED JULY 20, 1956, WHEREIN THE QUANTITIES, THE APPLICABLE UNIT PRICES, AND THE EXTENDED TOTALS WERE LISTED. HOWEVER, THERE WAS PRINTED ON THE FACT OF THE CONTRACTOR'S INVOICE, IN A BLOCK ESPECIALLY DESIGNED FOR SUCH PURPOSE, THE TERMS:

"UNLESS OTHERWISE INDICATED 2 PERCENT CASH DISCOUNT 10TH PROX.

NET AND PAST DUE THEREAFTER.'

NO DISCOUNT DEDUCTION WAS NOTED ON THE CONTRACTOR'S INVOICE, THE GROSS AMOUNT THEREOF BEING CLAIMED.

BY ADMINISTRATIVE DIFFERENCE STATEMENT DATED AUGUST 7, 1956, THE CONTRACTOR WAS NOTIFIED OF APPROVAL OF PAYMENT FOR THE SUPPLIES BUT WAS ADVISED THAT THERE WAS BEING DEDUCTED FROM THE GROSS AMOUNT SHOWN ON THE CONTRACTOR'S INVOICE A CASH DISCOUNT OF 2 PERCENT, AMOUNTING TO $201.38. WHEN PAYMENT WAS ACTUALLY MADE IS NOT DISCLOSED, BUT BY LETTER OF SEPTEMBER 10, 1956, OR WITHIN APPROXIMATELY 30 DAYS, THE CONTRACTOR PROTESTED THE DEDUCTION, STATING THAT WHEN ITS INVOICE WAS TYPED THE INVOICE CLERK FAILED TO NOTE THE TERMS OF THE CONTRACT AND INADVERTENTLY SHOWED THEREFOR ITS NORMAL CASH DISCOUNT.

IT IS OBVIOUS FROM THE FOREGOING RECITATION OF THE FACTS THAT IT WAS THE UNDERSTANDING AND AGREEMENT OF THE GOVERNMENT AND THE CONTRACTOR THAT NO DISCOUNT WAS TO BE ALLOWED. IT APPEARS EQUALLY CLEAR, ESPECIALLY IN VIEW OF ITS PROMPT PROTEST OF THE DISCOUNT DEDUCTION THAT THE CONTRACTOR'S ERRONEOUS NOTATION OF A DISCOUNT ON ITS INVOICE DID NOT CONSTITUTE AN OFFER OF A DISCOUNT INDEPENDENT OF THE CONTRACT TERMS FOR THE PURPOSE OF INDUCING PROMPT PAYMENT. THE FACTS HERE ARE READILY DISTINGUISHABLE FROM THOSE INVOLVED IN 25 COMP. GEN. 890, CITED IN YOUR LETTER, WHEREIN THE ERRORS ALLEGED TO HAVE BEEN MADE WERE REPEATED IN COUNTLESS INSTANCES OVER A PERIOD OF THREE YEARS AND WERE NOT BROUGHT TO THE ATTENTION OF THE ADMINISTRATIVE AGENCIES CONCERNED BEFORE THE END OF THAT PERIOD.

ACCORDINGLY, THE DISCOUNT DEDUCTED IN THIS INSTANCE SHOULD BE REFUNDED TO THE CONTRACTOR.

THE VOUCHER, WHICH MAY BE CERTIFIED FOR PAYMENT, AND THE RELATED PAPERS ARE RETURNED HEREWITH.