Claim for Reimbursement of Prompt Payment Discounts

A firm requested review of a previous settlement disallowing a claim for reimbursement of prompt payment discounts taken by the Navy. The contract, for escort/guard services, contained a provision permitting a 5 percent, 20-day prompt payment discount. The issue was whether the contracting officer actually received a true copy of the instrument of assignment. By letter dated December 14, 1978, the disbursing officer advised the assignee that he had received two copies of the notice of assignment from the contracting officer, and that he required an original and one copy of the notice of assignment and a true copy of the instrument of assignment from the assignee. The assignee was further advised that payment of an already submitted invoice was being held pending receipt of these documents. The protester alleged that the Navy did not notify the assignee or the contractor of any problem with the assignment of the contract until February 1979, almost 80 days after the contracting officer received notice of the assignment. The Navy took the discount on the theory that the 20 days did not begin to run until March 8, 1979, since this was the date it received the correct invoice by the terms of the contractor's discount clause. As a practical matter, the invoices were incorrect under the discounts clause and not for payment until the assignment documents were received by the officals designated to receive them. Furthermore, legislation specifically provides that it is the responsibility of the assignee to provide appropriate documentation to the disbursing officer, as well as to the contracting officer. The settlement disallowing the protester's claim was correct and was sustained.