B-132029, JUL. 15, 1957

B-132029: Jul 15, 1957

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TO AMERICAN BUSINESS SYSTEMS: REFERENCE IS MADE TO YOUR LETTER DATED MAY 7. IT ALSO PROVIDED THAT IN THE EVENT THE CONTRACTOR FAILED TO DELIVER THE SUPPLIES WITHIN THE TIME SPECIFIED IT WOULD PAY THE GOVERNMENT AS LIQUIDATED DAMAGES THE SUM OF $25 PER CALENDAR DAY FOR EACH CALENDAR DAY IT WAS IN DEFAULT OF THE DELIVERY DATE SPECIFIED. THE RECORD SHOWS THAT COMPLETE DELIVERY AT DESTINATION WAS NOT MADE UNTIL DECEMBER 28. THERE WAS DEDUCTED THE SUM OF $625. SINCE THEY APPEAR TO HAVE BEEN RETAINED BY THE GOVERNMENT FOR APPROXIMATELY SEVEN DAYS. WAS ALLOWED BY THE SETTLEMENT OF APRIL 22. DESTINATION" REFERRED TO THE PAYMENT OR NON-PAYMENT OF THE TRANSPORTATION CHARGES AND DID NOT IMPLY A CONTINUING RESPONSIBILITY ON OUR PART WHILE THE MATERIALS WERE IN THE HANDS OF THE CARRIER.'.

B-132029, JUL. 15, 1957

TO AMERICAN BUSINESS SYSTEMS:

REFERENCE IS MADE TO YOUR LETTER DATED MAY 7, 1957, REQUESTING REVIEW OF THAT PART OF SETTLEMENT DATED APRIL 22, 1957, WHICH DISALLOWED $525 OF YOUR CLAIM FOR REMISSION OF $625 DEDUCTED AS LIQUIDATED DAMAGES FOR DELAY IN DELIVERY OF TABULATING FORMS FURNISHED THE DEPARTMENT OF THE ARMY UNDER CONTRACT NO. DSS-49-083-57-45, DATED OCTOBER 22, 1956.

THE CONTRACT PROVIDED FOR DELIVERY OF A QUANTITY OF FORMS, F.O.B. DESTINATIONS, BY DECEMBER 3, 1956. IT ALSO PROVIDED THAT IN THE EVENT THE CONTRACTOR FAILED TO DELIVER THE SUPPLIES WITHIN THE TIME SPECIFIED IT WOULD PAY THE GOVERNMENT AS LIQUIDATED DAMAGES THE SUM OF $25 PER CALENDAR DAY FOR EACH CALENDAR DAY IT WAS IN DEFAULT OF THE DELIVERY DATE SPECIFIED.

THE RECORD SHOWS THAT COMPLETE DELIVERY AT DESTINATION WAS NOT MADE UNTIL DECEMBER 28, 1956, OR AFTER A DELAY OF 25 DAYS. IN MAKING PAYMENT TO YOU UNDER THE CONTRACT, THERE WAS DEDUCTED THE SUM OF $625, FOR A DELAY OF 25 DAYS. HOWEVER, SINCE THE CONTRACT STATED THAT PROOFS SUBMITTED BY YOU TO THE PURCHASING OFFICER WOULD BE RETURNED WITHIN A MAXIMUM OF THREE DAYS, AND SINCE THEY APPEAR TO HAVE BEEN RETAINED BY THE GOVERNMENT FOR APPROXIMATELY SEVEN DAYS, THE SUM OF $100, REPRESENTING REMISSION OF LIQUIDATED DAMAGES FOR FOUR DAYS, WAS ALLOWED BY THE SETTLEMENT OF APRIL 22, 1957.

IN REQUESTING REVIEW OF THE ACTION TAKEN IN THE SETTLEMENT YOU STATE:

"IT HAS ALWAYS BEEN OUR UNDERSTANDING IN ANY CONTRACTS FOR ANY GOVERNMENT OR PRIVATE AGENCIES, THAT THE TERMS "F.O.B. DESTINATION" REFERRED TO THE PAYMENT OR NON-PAYMENT OF THE TRANSPORTATION CHARGES AND DID NOT IMPLY A CONTINUING RESPONSIBILITY ON OUR PART WHILE THE MATERIALS WERE IN THE HANDS OF THE CARRIER.'

IN WEBSTER'S NEW COLLEGIATE DICTIONARY, THE WORD "DELIVERY" IS DEFINED, IN PART, AS FOLLOWS:

"COMM. THE TRANSPORTATION OF A PURCHASE TO THE PURCHASER. 8. LAW. THE ACT OF PUTTING PROPERTY INTO THE LEGAL POSSESSION OF ANOTHER.'

IT IS OBVIOUS THAT YOU DID NOT--- MERELY BY PLACING THE FORMS IN THE CUSTODY OF A CARRIER OF PHILADELPHIA, PENNSYLVANIA, FOR SHIPMENT--- TRANSFER ACTUAL PHYSICAL POSSESSION OF THEM TO THE GOVERNMENT AT THAT POINT, SO AS TO EFFECT DELIVERY OF THE FORMS WITHIN THE GENERALLY ACCEPTED COMMERCIAL DEFINITION OF THE TERM. NOR COULD THE SHIPMENT OF THE FORMS RESULT IN A CONSTRUCTIVE TRANSFER OF POSSESSION SUCH AS MIGHT BE REGARDED IN LAW AS A DELIVERY THEREOF AT THE POINT OF SHIPMENT, BY TRANSFER OF TITLE TO THE PURCHASER. THERE IS NOTHING IN THE CONTRACT ITSELF TO EVIDENCE AN INTENTION THAT THE GOVERNMENT SHOULD TAKE TITLE TO THE GOODS AT POINT OF SHIPMENT AND, SINCE YOU DO NOT DENY THE CONTRACT OBLIGATED YOU TO TRANSPORT THE FORMS TO THEIR ULTIMATE DESTINATIONS AND TO PAY ALL FREIGHT CHARGES, THE UNIFORM SALES ACT OPERATES TO PREVENT THE PASSAGE OF TITLE TO THE GOVERNMENT PRIOR TO THE DELIVERY OF THE FORMS TO THE DESTINATIONS. SEE 19 COMP. GEN. 198, AND CASES THEREIN CITED. IT IS APPARENT FROM THE FOREGOING THAT THE FORMS WERE NOT "DELIVERED" UNTIL THEY WERE FINALLY RECEIVED AT THE SPECIFIED DESTINATIONS AND THAT YOU WERE RESPONSIBLE FOR THEM UNTIL SO DELIVERED.

IN CONNECTION WITH YOUR STATEMENT THAT YOU MAILED THE PROOFS ON NOVEMBER 2, 1956, AND THAT THEY SHOULD HAVE BEEN RECEIVED BY THE GOVERNMENT THE NEXT DAY, THE ADMINISTRATIVE OFFICE HAS REPORTED THAT THE PROOFS WERE RECEIVED BY IT ON FRIDAY, NOVEMBER 9, 1956. THE ADMINISTRATIVE RECORDS ALSO SHOW THAT THE FORMS SHIPPED BY YOU WERE RECEIVED AT WASHINGTON, D.C., ON DECEMBER 13; AT SHAW AIR FORCE BASE ON DECEMBER 11; AND AT SHELBY AIR FORCE DEPOT ON DECEMBER 14, 20, AND 28. OUR OFFICE, HAVING NO FIRST-HAND KNOWLEDGE OF THE FACTS, MUST NECESSARILY RELY ON THE REPORT OF THE ADMINISTRATIVE OFFICE WITH RESPECT TO THE FACTUAL SITUATIONS ARISING UNDER THE CONTRACT. IN THE ABSENCE OF EVIDENCE SUFFICIENT TO OVERCOME THE PRESUMPTION OF THE CORRECTNESS THEREOF, IT IS THE INVARIABLE RULE OF THE ACCOUNTING OFFICERS OF THE GOVERNMENT TO ACCEPT THE STATEMENT OF FACTS AS REPORTED BY THE ADMINISTRATIVE OFFICERS. THERE IS NOTHING IN THE PRESENT RECORD TO JUSTIFY THE REJECTION OF THE FACTS AS REPORTED BY THE ADMINISTRATIVE OFFICE.

THE SETTLEMENT OF APRIL 22, 1957, IS THEREFORE SUSTAINED.

CHECK NO. 52541, IN THE AMOUNT OF $100, IS RETURNED AND YOU ARE ADVISED THAT INSOFAR AS OUR OFFICE IS CONCERNED, THE CHECK MAY BE NEGOTIATED WITHOUT PREJUDICE TO ANY RIGHTS THE PAYEE MIGHT HAVE TO THE BALANCE CLAIMED.