B-97055, SEPTEMBER 29, 1950, 30 COMP. GEN. 125

B-97055: Sep 29, 1950

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WAS SUBSEQUENTLY MODIFIED TO PROVIDE FOR A REDUCTION IN THE CONTRACT PRICE DUE TO FAILURE OF THE SUPPLIES TO MEET GOVERNMENT SPECIFICATIONS. PAYMENT WAS MADE WITHIN THE SPECIFIED NUMBER OF DAYS AFTER RECEIPT OF A CORRECTED INVOICE. REFUND OF THE DISCOUNT DEDUCTED IS UNAUTHORIZED. EVEN THOUGH PAYMENT AS MADE WAS NOT WITHIN THE SPECIFIED NUMBER OF DAYS AFTER RECEIPT OF THE SUPPLIES. 1950: REFERENCE IS MADE TO YOUR LETTER OF JUNE 29. SINCE THERE IS NOT HERE INVOLVED ANY QUESTION CONCERNING THE PURCHASER'S RIGHT. THIS DECISION WILL BE CONFINED TO THE QUESTION AS TO THE PROPRIETY OF THE GOVERNMENT'S ACTION IN HAVING RETURNED CERTAIN OF YOUR INVOICES FOR CORRECTION BEFORE MAKING PAYMENTS THEREON.

B-97055, SEPTEMBER 29, 1950, 30 COMP. GEN. 125

CONTRACTS - DISCOUNTS - PAYMENTS DELAYED BY CONTRACT MODIFICATION WHERE A CONTRACT, ORIGINALLY SPECIFYING UNIT PRICES FOR SUPPLIES AND CONTAINING AN OFFER OF DISCOUNT FOR PAYMENT WITHIN A SPECIFIED NUMBER OF DAYS AFTER DELIVERY OR RECEIPT OF A CORRECT INVOICE, WAS SUBSEQUENTLY MODIFIED TO PROVIDE FOR A REDUCTION IN THE CONTRACT PRICE DUE TO FAILURE OF THE SUPPLIES TO MEET GOVERNMENT SPECIFICATIONS, AND PAYMENT WAS MADE WITHIN THE SPECIFIED NUMBER OF DAYS AFTER RECEIPT OF A CORRECTED INVOICE, REFUND OF THE DISCOUNT DEDUCTED IS UNAUTHORIZED, EVEN THOUGH PAYMENT AS MADE WAS NOT WITHIN THE SPECIFIED NUMBER OF DAYS AFTER RECEIPT OF THE SUPPLIES, THE INVOICE PROPERLY HAVING BEEN RETURNED FOR CORRECTION IN ACCORDANCE WITH THE CONTRACT AS MODIFIED.

COMPTROLLER GENERAL WARREN TO AMOS-JAMES GROCER COMPANY, SEPTEMBER 29, 1950:

REFERENCE IS MADE TO YOUR LETTER OF JUNE 29, 1950, IN EFFECT REQUESTING REVIEW OF SETTLEMENT DATED SEPTEMBER 13, 1949, WHICH DISALLOWED YOUR CLAIM FOR $910.61, REPRESENTING DISCOUNT DEDUCTED IN MAKING PAYMENT TO YOU FOR SUPPLIES FURNISHED THE NEW CUMBERLAND GENERAL DEPOT, PENNSYLVANIA, UNDER ITEMS NOS. 3 AND 4 OF CONTRACT NO. W-04-493 QM-2287, DATED SEPTEMBER 2, 1948, AS AMENDED BY MODIFICATIONS A AND B.

SINCE THERE IS NOT HERE INVOLVED ANY QUESTION CONCERNING THE PURCHASER'S RIGHT, UNDER ,ESTABLISHED" TRADE CUSTOMS, TO MAKE AUTHORIZED DEDUCTIONS FOR SWELL ALLOWANCES, ET CETERA, WITHIN CONTEMPLATION OF THE RECOVERY CLAUSE OF YOUR SAID CONTRACT, SUCH AS DISCUSSED IN YOUR LETTER, THIS DECISION WILL BE CONFINED TO THE QUESTION AS TO THE PROPRIETY OF THE GOVERNMENT'S ACTION IN HAVING RETURNED CERTAIN OF YOUR INVOICES FOR CORRECTION BEFORE MAKING PAYMENTS THEREON, WHICH IS THE QUESTION INVOLVED IN YOUR CLAIM.

IN YOUR BASIC LETTER OF JANUARY 27, 1949, YOU REFER TO FOUR OF YOUR INVOICES ON WHICH CASH DISCOUNTS WERE TAKEN IN AMOUNTS AGGREGATING $910.61, FOR WHICH REFUND IS NOW CLAIMED. THESE INVOICES, EVIDENCING FOUR SEPARATE SHIPMENTS OF SUPPLIES TO THE NEW CUMBERLAND GENERAL DEPOT ON THE RESPECTIVE DATES OF OCTOBER 26, OCTOBER 27, NOVEMBER 2, AND NOVEMBER 4, 1948, WERE MADE ON CARS NOS. NWX 50050, ART 16679, ART 23715 AND PFE 41442, ART 23919. YOU INDICATE THE DATES OF ARRIVAL OF THESE CARS AT DESTINATION AS NOVEMBER 10, 12, 16 AND 16, 1948, AND CONTEND THAT PAYMENTS THEREON WERE NOT ACCOMPLISHED UNTIL THE RESPECTIVE DATES DECEMBER 14 AND 22, 1948, OR BEYOND THE 20-DAY DISCOUNT PERIOD SPECIFIED IN YOUR CONTRACT. THEREFORE, YOU CLAIM THAT YOU ARE ENTITLED TO REFUND OF THE TWO PERCENT DISCOUNT TAKEN ON THE FOUR INVOICES DESIGNATED.

WITH RESPECT THERETO, THE RECORD ESTABLISHES THAT THE FOUR INVOICES INVOLVED ORIGINALLY WERE RECEIVED IN THE PURCHASING OFFICE ON OCTOBER 29, NOVEMBER 1, NOVEMBER 4, AND NOVEMBER 9, 1948, RESPECTIVELY, OR PRIOR TO THE DATES OF RECEIPT OF THE SUPPLIES AT DESTINATION. HOWEVER, UPON INSPECTION OF THE SUPPLIES AT POINTS OF ORIGIN, CONDUCTED BY AN AUTHORIZED REPRESENTATIVE OF THE U.S. DEPARTMENT OF AGRICULTURE, IT WAS FOUND THAT ITEM NO. 3 OF YOUR CONTRACT, COVERING 3,250 DOZEN TYPE I, NO. 10 CANS OF PEACHES, DID NOT COMPLY WITH THE REQUIREMENTS OF FEDERAL SPECIFICATIONS AS TO DRAINED WEIGHT, WHICH NECESSITATED FURTHER NEGOTIATIONS BETWEEN YOU AND THE PURCHASING AGENCY CONCERNING THE APPROPRIATE REVISIONS OF THE CONTRACT PRICE APPLICABLE TO THAT ITEM. THE AFORESAID NEGOTIATIONS RESULTED IN MODIFICATION " B" TO YOUR CONTRACT, WHICH, ACCORDING TO OFFICIAL RECORDS, WAS MAILED TO YOU FOR ACCEPTANCE ON NOVEMBER 19, 1948, AND, UPON ACCEPTANCE AND EXECUTION BY YOU, WAS RETURNED TO THE PURCHASING OFFICE ON NOVEMBER 26, 1948.

INASMUCH AS THE AFORESAID MODIFICATION AUTHORIZED APPROPRIATE DEDUCTIONS TO BE MADE IN THE SPECIFIED CONTRACT PRICE OF ITEM NO. 3, OBVIOUSLY IT COULD NOT HAVE BECOME EFFECTIVE UNTIL ITS FORMAL ACCEPTANCE BY YOU HAD BEEN ACCOMPLISHED AND NOTIFICATION OF SUCH ACCEPTANCE HAD BEEN TRANSMITTED TO THE CONTRACTING OFFICER FOR THE GOVERNMENT. IT NECESSARILY FOLLOWS THAT NO PAYMENTS UNDER THE SAID CHANGE ORDER WOULD HAVE BEEN JUSTIFIED PRIOR TO NOVEMBER 26, 1948, NOR COULD IT REASONABLY BE MAINTAINED THAT YOUR ORIGINAL INVOICES, BASED AS THEY WERE UPON THE ABANDONED UNIT PRICES SPECIFIED IN THE BASIC CONTRACT FOR SPECIFICATION SUPPLIES, WERE "CORRECT" WITHIN THE INTENT AND MEANING OF THE DISCOUNT CLAUSE, WHICH EXPLICITLY PROVIDES THAT TIME, IN CONNECTION WITH THE DISCOUNT OFFERED, IS FOR COMPUTATION EITHER FROM "DATE OF DELIVERY AT DESTINATION * * * OR FROM DATE CORRECT BILL OR VOUCHER * * * IS RECEIVED IF THE LATTER DATE IS LATER THAN THE DATE OF DELIVERY.' ( ITALICS SUPPLIED.) SINCE YOUR ORIGINAL BILLINGS UNDER ITEM NO. 3 WERE AT VARIANCE WITH THE UNIT PRICES SPECIFIED FOR THAT ITEM UNDER MODIFICATION " B," SUPRA, WHICH LATTER DOCUMENT WAS NECESSITATED BY YOUR FAILURE TO FURNISH SUPPLIES EQUIVALENT TO THE SPECIFICATION REQUIREMENTS, IT IS MANIFEST THAT THE ADMINISTRATIVE OFFICE WAS FULLY JUSTIFIED IN RETURNING THEM TO YOU EITHER FOR REBILLING OR FOR CORRECTION IN ACCORDANCE WITH THE REVISED UNIT PRICES AND TOTALS MUTUALLY AGREED UPON IN THE SAID MODIFICATION.

THEREFORE, PAYMENTS ON SUCH REVISED BILLINGS DID NOT BECOME DUE UNTIL AFTER THE DATE OF THEIR RECEIPT IN THE DESIGNATED FINANCE OFFICE, AND SINCE THE FACTS IN THE CASE AFFIRMATIVELY ESTABLISH THAT YOUR CORRECTED INVOICES UNDER ITEM 3, SUPRA, COVERING THE THREE SHIPMENTS MADE ON CARS NOS. ART 16679, ART 23715, AND CAR NO. PFE 41442, ART 23919, DID NOT ARRIVE IN THE PURCHASING OFFICE UNTIL AS LATE AS DECEMBER 2, 1948, THAT DATE NECESSARILY MUST BE REGARDED AS CONTROLLING FOR DISCOUNT PURPOSES. FURTHERMORE, THE RECORD DISCLOSES THAT PAYMENTS ON THESE SHIPMENTS WERE MADE ON THE RESPECTIVE DATES DECEMBER 14 AND 22, 1948, OR WITHIN 20 DAYS FROM DATE OF RECEIPT OF THE ,CORRECT" BILLINGS THEREON, AND, THEREFORE, THE TWO PERCENT DISCOUNT TAKEN IN CONNECTION THEREWITH MUST BE CONSIDERED AS EARNED, SO AS TO ENTITLE THE GOVERNMENT TO THE RESPECTIVE SUMS OF $163.05, $178.20, AND $355.75, TOTALING $697,10.

WITH RESPECT TO YOUR INVOICE ON CAR NO. NWX 50050, COVERING A SHIPMENT OF SUPPLIES MADE FROM ARMONA, CALIFORNIA, UNDER ITEM 4 OF THE CONTRACT, IT IS ADMINISTRATIVELY REPORTED THAT THIS CAR DID NOT ARRIVE AT DESTINATION UNTIL DECEMBER 6, 1948, AS CONTRASTED TO YOUR ALLEGATION THAT THE SHIPMENT ARRIVED AT THE NEW CUMBERLAND GENERAL DEPOT ON NOVEMBER 10, 1948. THUS, THE MATTER RESOLVES ITSELF SOLELY INTO A DISPUTED QUESTION OF FACT BETWEEN YOU AND THE CONTRACTING OFFICER, WITH RESPECT TO WHICH YOUR ATTENTION IS INVITED TO ARTICLE 11 OF THE CONTRACT, WHICH READS, IN PERTINENT PART:

ARTICLE 11. DISPUTES. EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED IN THIS CONTRACT, ALL DISPUTES CONCERNING QUESTIONS OF FACT WHICH MAY ARISE UNDER THIS CONTRACT, AND WHICH ARE NOT DISPOSED OF BY MUTUAL AGREEMENT, SHALL BE DECIDED BY THE CONTRACTING OFFICER, WHO SHALL REDUCE HIS DECISION TO WRITING AND MAIL A COPY THEREOF TO THE CONTRACTOR AT HIS ADDRESS SHOWN HEREIN. WITHIN 30 DAYS FROM SAID MAILING THE CONTRACTOR MAY APPEAL IN WRITING TO THE SECRETARY OF WAR, WHOSE WRITTEN DECISION OR THAT OF HIS DESIGNATED REPRESENTATIVE OR REPRESENTATIVES THEREON SHALL BE FINAL AND CONCLUSIVE UPON THE PARTIES HERETO. * * *

IN VIEW THEREOF, AND IN THE ABSENCE OF ANY AFFIRMATIVE EVIDENCE DISPROVING THE CONTRACTING OFFICER'S FINDINGS AS TO THE DATE OF ARRIVAL OF CAR NO. NWX 50050 AT DESTINATION, HIS FINDINGS ON THE MATTER MUST BE REGARDED AS FINAL AND CONCLUSIVE UPON THIS OFFICE. SEE 20 COMP. GEN. 573, 578; 16 ID. 1105-1106; ID. 410; 15 ID. 241; 3 ID. 51. INASMUCH AS PAYMENT ON THIS INVOICE WAS MADE ON DECEMBER 14, 1948, OR WELL WITHIN THE 20-DAY DISCOUNT PERIOD, COMPUTED FROM THE REPORTED DATE OF DELIVERY OF THE SUPPLIES AT DESTINATION, THE DISCOUNT OF $213.51 DEDUCTED THEREON ALSO WAS EARNED.

ACCORDINGLY, THE SETTLEMENT OF SEPTEMBER 13, 1949, HEREBY IS AFFIRMED.

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