B-171077, MAR 19, 1971

B-171077, MAR 19, 1971

PROMPT PAYMENT DISCOUNTS - INVOICES DECISION SUSTAINING PRIOR SETTLEMENT WHICH DISALLOWED CLAIMS OF $114.91, $642.16, AND $1,475.04 CLAIMED BY YALE NECKWEAR COMPANY REPRESENTING DISCOUNT DEDUCTIONS ON DEFENSE SUPPLY AGENCY CONTRACTS. UNDER CONTRACT TERMS, 5 PERCENT DISCOUNTS WERE ALLOWED FOR PAYMENTS WITHIN SPECIFIED PERIODS COMPUTED FROM DATES OF DELIVERY AT DESTINATION OR FROM DATES CORRECT INVOICES OR VOUCHERS WERE RECEIVED WHICHEVER WAS LATER. BECAUSE THE PERTINENT PROVISIONS OF ASPR THAT INVOICE COPIES SHALL BE OVERSTAMPED "ORIGINAL INVOICE" AND OTHER COPIES "INVOICE COPY" WERE NOT FOLLOWED, THERE EXISTS NO LEGAL BASIS FOR PAYMENT OF THE CLAIMS.

TO YALE NECKWEAR COMPANY:

FURTHER REFERENCE IS MADE TO YOUR LETTER DATED SEPTEMBER 29, 1970, RELATIVE TO THE DISALLOWANCES OF YOUR CLAIMS FOR REFUND OF DISCOUNTS DEDUCTED IN MAKING PAYMENTS TO YOUR COMPANY UNDER DEFENSE SUPPLY AGENCY CONTRACTS NOS. DSA 100-67-C-0140, DSA 100-67-C-1681 AND DSA 100-67-C 4820. THE CLAIMS, IN THE AMOUNTS OF $114.91, $642.16 AND $1,475.04, RESPECTIVELY, WERE DISALLOWED BY SETTLEMENT DATED SEPTEMBER 22, 1970, ISSUED BY THE CLAIMS DIVISION OF OUR OFFICE.

UNDER THE TERMS OF THE CONTRACTS, A DISCOUNT OF 5 PERCENT WAS ALLOWED FOR PAYMENT WITHIN SPECIFIED PERIODS COMPUTED FROM DATES OF DELIVERY AT DESTINATIONS OR FROM DATES CORRECT INVOICES OR VOUCHERS WERE RECEIVED WHICHEVER WAS LATER. FOR THE FIRST TWO OF THE ABOVE CONTRACTS THE DISCOUNT TERMS WERE 5 PERCENT, 20 DAYS, AND FOR THE THIRD CONTRACT THE DISCOUNT TERMS WERE 5 PERCENT, 30 DAYS. INVOICES WERE REQUIRED TO BE SUBMITTED TO THE DISBURSING OFFICE AT THE DEFENSE CONTRACT ADMINISTRATION SERVICES REGIONAL OFFICE IN BOSTON, MASSACHUSETTS (DCASR, BOSTON).

WITH RESPECT TO THE $114.91 CLAIM, YOU SUBMITTED AN INVOICE DATED APRIL 18, 1967, MARKED "DUPLICATE" AND DESCRIBED AS COVERING A SHIPMENT ON DECEMBER 14, 1966, TO THE DEFENSE DEPOT, MEMPHIS, TENNESSEE, VIA THE ADLEY EXPRESS COMPANY. A COPY OF MATERIAL INSPECTION AND RECEIVING REPORT (MIRR), DD FORM 250, WAS RECEIVED BY THE DISBURSING OFFICE ON DECEMBER 27, 1966. IT WAS NOT AN INVOICE FOR THE ITEMS SHIPPED AND NO INVOICE APPEARS TO HAVE BEEN SUBMITTED BEFORE THE DISBURSING OFFICE RECEIVED THE APRIL 18, 1967, INVOICE WHICH HAD BEEN MARKED AS A DUPLICATE INVOICE. THE INVOICE DATED APRIL 18, 1967, REPORTEDLY WAS RECEIVED ON APRIL 21, 1967, AND IT WAS PAID BY CHECK DATED APRIL 26, 1967, WELL WITHIN THE CONTRACT DISCOUNT PERIOD OF 20 DAYS.

WITH REFERENCE TO THE CLAIM FOR $642.16, THE RECORD SHOWS THAT THE MATERIAL INVOLVED WAS RECEIVED AT DESTINATION ON MAY 16, 1967, AND THAT PAYMENT FOR THE MATERIAL WAS MADE BY CHECK DATED MAY 25, 1967. ALTHOUGH YOU HAVE INDICATED THAT YOU SUBMITTED AN INVOICE DATED APRIL 21, 1967, PAYMENT WAS MADE WITHIN THE CONTRACT DISCOUNT PERIOD WHICH IN THIS CASE RUNS FROM THE DATE OF DELIVERY AT DESTINATION, MAY 16, 1967.

IN REGARD TO THE CLAIM FOR $1,475.04, THE RECORD SHOWS THAT THE ITEMS SHIPPED WERE OFFERED FOR INSPECTION AND ACCEPTANCE AT ORIGIN ON NOVEMBER 3, 1967. IT WAS ORIGINALLY REPORTED THAT THE MATERIAL WAS ACCEPTED BY THE GOVERNMENT ON NOVEMBER 21, 1967. HOWEVER, IN A RECENT REPORT FROM DCASR, BOSTON, IT IS STATED THAT THE MATERIAL WAS DELIVERED AT DESTINATION ON NOVEMBER 27, 1967, AND THAT A CORRECTED COPY OF A PARTIALLY EXECUTED MIRR, ALSO REFERRED TO AS A "SHIPPING COPY" OF DD FORM 250, WAS NOT RECEIVED AT THE DISBURSING OFFICE UNTIL DECEMBER 20, 1967. IN ACCORDANCE WITH AN AGREEMENT REACHED IN A TELEPHONE CONVERSATION OF DECEMBER 21, 1967, WITH A REPRESENTATIVE OF YOUR COMPANY, THE CORRECTED COPY OF THE DD FORM 250 WAS MARKED TO IDENTIFY IT AS AN INVOICE, AND PROCESSED FOR PAYMENT. THE INVOICE AMOUNT OF $29,500.80, LESS A DISCOUNT OF 5 PERCENT, OR $1,475.04, WAS PAID BY CHECK DATED DECEMBER 26, 1967, OR WITHIN THE 30-DAY CONTRACT DISCOUNT PERIOD, COMPUTED EITHER FROM THE REPORTED DATE OF DELIVERY AT DESTINATION OR FROM THE REPORTED DATE OF RECEIPT OF A CORRECTED PARTIALLY EXECUTED MIRR, DD FORM 250.

YOUR LETTER OF SEPTEMBER 29, 1970, RELATES PRIMARILY TO THE CLAIMS FOR $114.91 AND $1,475.04. YOU CONTEND THAT IN THOSE CASES THE "SHIPPING COPIES" OF DD FORM 250, SHOWING SHIPPING DATES AND SHIPPING DESTINATIONS, DESCRIPTIONS OF AND PRICING INFORMATION CONCERNING THE MATERIALS SHIPPED, WERE SENT TO DCASR, BOSTON, AT TIMES OF SHIPMENT, AND THAT THOSE DOCUMENTS WERE, IN FACT, YOUR INVOICES FOR THE MATERIALS DELIVERED. YOU STATE THAT FOUR IDENTICAL INVOICES WERE SENT ON THE SAME DAY TO VARIOUS DESTINATIONS, ONE ORIGINAL DD FORM 250 TO DPS BOSTON, ONE COPY TO DPS PHILADELPHIA, ONE COPY TO HARTFORD AND ONE COPY TO EACH DESTINATION.

DCASR, BOSTON, DENIES HAVING RECEIVED A "SHIPPING COPY" OF DD FORM 250 IN CONNECTION WITH THE SHIPMENT WHICH WAS STATED AS HAVING BEEN MADE ON DECEMBER 14, 1966. THE FORM WHICH IT RECEIVED ON DECEMBER 27, 1966, REPORTEDLY WAS THE DESTINATION ACCEPTANCE COPY WHICH WOULD HAVE BEEN REQUIRED IN SUPPORT OF ANY PAYMENT FOR THE ITEMS SHIPPED.

THE INVOICE INSTRUCTIONS OF THE CURRENT SECTION I-306 OF THE ARMED SERVICES PROCUREMENT REGULATION, APPENDIX I, ENCOURAGE THE USE OF COPIES OF DD FORMS 250 AS INVOICES IN LIEU OF COMMERCIAL FORMS. HOWEVER, IT IS PROVIDED THAT FOUR INVOICE COPIES SHALL BE PREPARED AND MARKED IN LETTERS APPROXIMATELY ONE INCH HIGH, THE FIRST COPY TO BE MARKED, "ORIGINAL INVOICE," AND THE OTHER THREE COPIES, "INVOICE COPY." THE EQUIVALENT PROVISION OF ASPR IN EFFECT AS OF THE DATES ON WHICH SHIPMENTS WERE MADE BY YOUR COMPANY UNDER THE THREE CONTRACTS WITH THE DEFENSE SUPPLY AGENCY, STATED IN PERTINENT PART: "THE INVOICE COPIES SHALL BE OVERSTAMPED AS FOLLOWS IN LETTERS APPROXIMATELY ONE INCH HIGH, FIRST COPY: "ORIGINAL INVOICE," OTHER COPIES: "INVOICE COPY." THE PROVISION WAS ADOPTED BECAUSE SUCH IDENTIFICATION ON THE DD FORM 250 WHEN USED AS AN INVOICE REPRESENTS A REAL NEED IN ORDER TO PROPERLY CARRY OUT THE GOVERNMENT'S BUSINESS AND PARTICULARLY TO PREVENT IMPROPER OR DUPLICATE PAYMENTS.

IN THE CIRCUMSTANCES, IT IS OUR OPINION THAT THERE EXISTS NO LEGAL BASIS FOR PAYMENT OF THE CLAIMS FOR $114.91, $642.16 AND $1,475.04. ACCORDINGLY, THE SETTLEMENT UNDER WHICH THE THREE CLAIMS WERE DISALLOWED IS SUSTAINED.