B-182125, DEC 18, 1974

B-182125: Dec 18, 1974

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SUBSEQUENT AMENDMENT AND CONTRACTING OFFICER'S STATEMENT INDICATE IT WAS INTENTION OF PARTIES THAT CONTRACTOR BE PAID FULL PRICE NOTWITHSTANDING DELIVERY OF EQUIPMENT WAS TO BE DELAYED. THE ACTUAL INSTALLATION AND ACCEPTANCE DATES WERE NOVEMBER 9 AND 16. SINCE DELIVERY OF THE EQUIPMENT WAS NOT MADE ON THE FIRST DAY OF THE MONTH. ACDI'S NOVEMBER INVOICE WAS PAID ON A PRORATED BASIS IN THE AMOUNT OF $4. THE PURCHASE ORDER STATES THAT IF TERMINATION IS EFFECTED PRIOR TO JUNE 30. THE TERMINATION CHARGE IS TO BE EQUAL TO THE RENTAL CHARGE APPLICABLE TO THE REMAINING PERIOD THROUGH JUNE 30. AS SHOWN ON PURCHASE ORDER NO-74-1101 IS AMENDED TO INCLUDE THE FOLLOWING 'CHARGES FOR LEASE OF THE EQUIPMENT SHALL BE FROM NOV. 1.

B-182125, DEC 18, 1974

CONTRACTOR SHOULD BE PAID AMOUNT DEDUCTED FROM FIRST MONTHLY PAYMENT FOR USE OF COMPUTER EQUIPMENT DELIVERED AFTER BEGINNING OF MONTH UNDER LEASE DATED AFTER FIRST OF MONTH, SINCE TERMS OF LEASE, SUBSEQUENT AMENDMENT AND CONTRACTING OFFICER'S STATEMENT INDICATE IT WAS INTENTION OF PARTIES THAT CONTRACTOR BE PAID FULL PRICE NOTWITHSTANDING DELIVERY OF EQUIPMENT WAS TO BE DELAYED.

ALLIED COMPUTER DEALERS INCORPORATED:

BY LETTER A:F:AF:MEW DATED AUGUST 23, 1974, HE CHIEF, TMP UNIT, INTERNAL REVENUE SERVICE (IRS), REQUESTED OUR DECISION AS TO THE PROPRIETY OF PAYING A RECLAIM INVOICE FOR $4,100 SUBMITTED BY ALLIED COMPUTER DEALERS INCORPORATED (ACDI) PURSUANT TO PURCHASE ORDER NO-74 1101, DATED NOVEMBER 5, 1973, IN CONNECTION WITH THE LEASE OF COMPUTER EQUIPMENT FOR THE IRS NATIONAL COMPUTER CENTER, MARTINSBURG, WEST VIRGINIA.

ACDI MAINTAINED THAT IT HAD A FIXED-PRICE CONTRACT IN THE AMOUNT OF $72,000 (PAYABLE IN EIGHT MONTHLY INSTALLMENTS) TO PROVIDE COMPUTER EQUIPMENT FROM NOVEMBER 1973 TO JUNE 30, 1974. THE PURCHASE ORDER PROVIDED FOR INSTALLATION OF THE EQUIPMENT ON NOVEMBER 10, 17 AND 24, 1973. THE ACTUAL INSTALLATION AND ACCEPTANCE DATES WERE NOVEMBER 9 AND 16, 1973. SINCE DELIVERY OF THE EQUIPMENT WAS NOT MADE ON THE FIRST DAY OF THE MONTH, ACDI'S NOVEMBER INVOICE WAS PAID ON A PRORATED BASIS IN THE AMOUNT OF $4,900 INSTEAD OF THE FULL $9,000 BILLED. HOWEVER, THE PURCHASE ORDER STATES THAT IF TERMINATION IS EFFECTED PRIOR TO JUNE 30, 1974, THE TERMINATION CHARGE IS TO BE EQUAL TO THE RENTAL CHARGE APPLICABLE TO THE REMAINING PERIOD THROUGH JUNE 30, 1974, AND PURCHASE ORDER AMENDMENT 1, DATED JULY 11, 1974, STATES, "THE LEASE AGREEMENT, AS SHOWN ON PURCHASE ORDER NO-74-1101 IS AMENDED TO INCLUDE THE FOLLOWING 'CHARGES FOR LEASE OF THE EQUIPMENT SHALL BE FROM NOV. 1, 1973 THROUGH JUNE 30, 1974.'" FURTHER, THE CONTRACTING OFFICER HAS STATED THAT IT WAS INTENDED THAT THE PURCHASE ORDER BE FOR A FIRM FIXED PRICE.

IN THE CIRCUMSTANCES, WE CONCLUDE THAT THE CONTRACTOR WAS ENTITLED TO BE PAID $72,000 FOR THE TERM OF THE CONTRACT AND THAT IT WAS THE INTENTION OF THE CONTRACTING PARTIES THAT THE CONTRACTOR BE PAID THE FULL CONTRACT PRICE NOTWITHSTANDING DELIVERY OF THE EQUIPMENT WAS NOT TO BE ACCOMPLISHED ON THE FIRST DAY OF THE MONTH. THEREFORE, ACDI SHOULD BE PAID THE $4,100 DEDUCTED FROM THE FIRST MONTHLY PAYMENT.