B-173725, SEP 16, 1971

B-173725, SEP 16, 1971

COMMERCIAL SERVICES - LATE PAYMENT CHARGES DECISION AUTHORIZING PAYMENT TO THE BRISTOL TENNESSEE ELECTRIC SYSTEM IN THE AMOUNT OF $42.50 AS LATE PAYMENT CHARGES AGAINST THE JACOB CREEK JOB CORPS CENTER FOR FAILURE TO REMIT AN AMOUNT DUE ON THEIR ELECTRIC UTILITY BILL. GAO MUST CONCLUDE UNDER THE FACTS OF THIS CASE THAT SINCE THE GOVERNMENT ACCEPTED THIS UTILITY SERVICE WITH THE UNDERSTANDING THAT ITS OBLIGATION FOR PAYMENT WOULD BE GOVERNED BY THE PUBLISHED RATE SCHEDULE, IT IS ALSO BOUND BY THE LATE PAYMENT CLAUSE CONTAINED WITHIN THAT SCHEDULE.

TO MR. RALPH W. ACCARDI:

REFERENCE IS MADE TO YOUR LETTER OF JULY 15, 1971, WITH ENCLOSURES, IN WHICH YOU REQUEST A DECISION IN ACCORDANCE WITH 31 U.S.C. 82D AS TO WHETHER YOU MAY PROPERLY CERTIFY FOR PAYMENT THE AMOUNT OF $42.50 CHARGED AGAINST THE JACOB CREEK JOB CORPS CENTER BY THE BRISTOL TENNESSEE ELECTRIC SYSTEM AS A LATE PAYMENT CHARGE FOR FAILING TO REMIT THE AMOUNT DUE ON THEIR ELECTRIC UTILITY BILL WITHIN THE 10-DAY PERIOD REQUIRED BY THE COMPANY.

YOU STATE THAT IT APPEARS THIS ADDITIONAL LATE PAYMENT CHARGE REPRESENTS A FORM OF INTEREST AND QUESTION ITS VALIDITY IN VIEW OF OUR HOLDING IN 5 COMP. GEN. 649 (1926) AS STATED IN THE SYLLABUS, THAT -

"IN THE ABSENCE OF SPECIFIC AUTHORITY THEREFORE, THE UNITED STATES MAY NOT BE OBLIGATED TO PAY INTEREST ON THE AMOUNT OF AN INVOICE NOT PAID WITHIN A SPECIFIED TIME."

IT IS WELL SETTLED THAT THE PAYMENT OF INTEREST BY THE GOVERNMENT OF THE UNITED STATES ON ITS UNPAID ACCOUNTS MAY NOT BE MADE EXCEPT WHERE INTEREST IS STIPULATED BY CONTRACT OR IS PROVIDED BY THE LAWS OF THE UNITED STATES. SEE 22 COMP. GEN. 772 (1943); 33 COMP. GEN. 263 (1953); 45 COMP. GEN. 169 (1965); AND THE COURT CASES CITED IN THOSE DECISIONS.

YOU STATE THAT NO WRITTEN CONTRACT BETWEEN THE PARTIES WAS EXECUTED IN ACCORDANCE WITH SECTION 4-4.410-2 OF THE AGRICULTURE PROCUREMENT REGULATIONS, AMENDMENT NO. 19, AND THAT ARRANGEMENTS WERE MADE BY VERBAL REQUEST WITH RATES TO BE BASED ON THE PUBLISHED "GENERAL POWER RATE, SCHEDULE C-4."

YOU ALSO NOTE THAT THE LATE PAYMENT PROVISION IS INCLUDED ON THE REVERSE SIDE OF THIS RATE SCHEDULE UNDER THE HEADING "PAYMENT."

WE MUST CONCLUDE UNDER THESE FACTS THAT SINCE THE GOVERNMENT ACCEPTED THIS UTILITY SERVICE WITH THE UNDERSTANDING THAT ITS OBLIGATION FOR PAYMENT WOULD BE GOVERNED BY THE PUBLISHED RATE SCHEDULE, IT IS ALSO BOUND BY THE LATE PAYMENT CLAUSE CONTAINED WITHIN THAT SCHEDULE.

THEREFORE, IN ACCORDANCE WITH OUR DECISIONS PREVIOUSLY CITED, THE LATE PAYMENT CHARGE OF $42.50 SHOULD BE CERTIFIED FOR PAYMENT. THE INVOICE IS RETURNED HEREWITH.