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[Late Payment Charges for Utility Services]

B-214479 Jul 26, 1984
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Highlights

The Social Security Administration (SSA) requested an opinion as to whether the state tariff provisions or Prompt Payment Act provisions take precedence in assessing late payment charges on its bills from a telephone company which is the sole supplier of telephone services in some localities. SSA has been disputing these charges, claiming that the more liberal terms of the act should control late payments rather than the terms of the tariff. Because of the processing time involved, SSA finds it extremely difficult to make timely payments to the telephone company. The act provides that, where a contract spells out a specific payment date, it is the date specified in the contract that controls. In the absence of any other agreement, the terms of the state tariff must be regarded as being incorporated into the contract, and the more favorable provisions of the act do not apply where contract terms provide otherwise. Furthermore, the regulations issued under the act exempt all or nearly all public utility contracts from coverage. GAO found that the telephone company's claim for both its late charge and interest under the act was improper because the act provides no authority to compensate a vendor twice for delinquent payments. Payments for late charges dating from fiscal year 1983 should be made from 1983 funds. Finally, if tariffs and public utility codes in other states are similar to those in question, and are otherwise correct, these other late charges may also be paid.

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