B-123931, SEP. 2, 1955

B-123931, SEP. 2, 1955

TO SWITLIK PARACHUTE COMPANY, INC.:

REFERENCE IS MADE TO YOUR LETTERS OF JULY 15 AND AUGUST 1, 1955, WHEREIN YOU REQUEST RECONSIDERATION OF OUR ACTION IN HAVING DISALLOWED YOUR CLAIM FOR $5,182.11, REPRESENTING DISCOUNT, COMPUTED AT THE RATE OF ONE PERCENT ON THE AMOUNT OF $518,211.78 WHICH WAS REFUNDED BY YOU TO THE GOVERNMENT PURSUANT TO THE TERMS OF SUPPLEMENTAL AGREEMENT NO. 6 TO YOUR BASIC CONTRACT NO. AF 33/038/ 15018, DATED AUGUST 4, 1950, WITH THE DEPARTMENT OF THE AIR FORCE.

BRIEFLY SUMMARIZED, IT IS YOUR POSITION THAT THE PROMPT PAYMENT DISCOUNTS WHICH PREVIOUSLY HAD BEEN DEDUCTED BY THE DEPARTMENT OF THE AIR FORCE IN MAKING PAYMENTS TO YOU UNDER YOUR ORIGINAL CONTRACT WERE NOT CONSIDERED BY THE PARTIES DURING THE COURSE OF THE NEGOTIATIONS WHICH PRECEDED THE EXECUTION OF THE PRICE RENEGOTIATION AGREEMENT OF AUGUST 15, 1952, AND SINCE PROMPT PAYMENT DISCOUNTS, AGGREGATING APPROXIMATELY $47,983.48, HAD BEEN TAKEN BY THE GOVERNMENT IN ACCORDANCE WITH THE TERMS OF THE ORIGINAL CONTRACT, COMPUTED, OF COURSE, UPON THE BASIS OF ONE PERCENT OF THE ORIGINAL CONTRACT CONSIDERATION OF $4,798,347.83, YOU FEEL YOU ARE PROPERLY ENTITLED TO REFUND OF THE DISCOUNTS AMOUNTING TO $5,182.11 WHICH THERETOFORE HAD BEEN TAKEN ON THE AMOUNT OF $518,211.78 REFUNDED BY YOU PURSUANT TO THE RENEGOTIATION SETTLEMENT REFERRED TO.

THE CONTRACTING AUTHORITIES FOR THE GOVERNMENT TAKE THE POSITION, HOWEVER, THAT THE MATTER OF PROMPT PAYMENT DISCOUNTS PREVIOUSLY TAKEN UNDER YOUR CONTRACT WAS TAKEN INTO CONSIDERATION AT THE TIME THE NEGOTIATIONS WERE BEING CONDUCTED AND THAT IT DEFINITELY WAS A FACTOR USED IN THE DETERMINATION OF THE AMOUNT OF THE FINAL SETTLEMENT.

SUPPLEMENTAL AGREEMENT NO. 6 SPECIFICALLY PROVIDES FOR A REVISED CONTRACT CONSIDERATION OF $4,280,136.05 FOR THE ARTICLES FURNISHED, IN SUBSTITUTION FOR THE ORIGINAL CONTRACT PRICE OF $4,798,347.83--- A REDUCTION OF $518,211.78. HOWEVER, FOR THE SPECIFIC PURPOSE OF CLARIFYING ANY DOUBTS CONCERNING THE GOVERNMENT'S RIGHT TO RETAIN THE DISCOUNTS WHICH HAD PREVIOUSLY BEEN TAKEN UNDER THE TERMS OF CLAUSE 32/F) OF THE ORIGINAL CONTRACT, THERE WAS INCORPORATED INTO THE FIRST CLAUSE OF THE SUPPLEMENTAL AGREEMENT, IMMEDIATELY FOLLOWING A STATEMENT OF THE REVISED CONSIDERATION, A MODIFYING CLAUSE WHICH READ: "* * * SUBJECT, HOWEVER, TO THE DISCOUNTS FOR PROMPT PAYMENT WHICH HAVE PREVIOUSLY BEEN TAKEN" UNDER THE DISCOUNT CLAUSE OF THE ORIGINAL SUPPLIES CONTRACT. THERE WAS THUS RESERVED TO THE GOVERNMENT THE RIGHT TO RETAIN THE ENTIRE AMOUNT OF THE DISCOUNTS WHICH HAD ACCRUED TO IT UNDER THE TERMS OF THE ORIGINAL CONTRACT. EVEN IF, AS YOU ALLEGE, THE ITEM OF DISCOUNT WAS NOT DISCUSSED BY THE PARTIES, NOR INTENDED TO BE MADE PART OF SUPPLEMENTAL AGREEMENT NO. 6, THE FACT REMAINS THAT YOU SIGNED THE AGREEMENT, THEREBY EVIDENCING YOUR UNEQUIVOCAL ASSENT TO THE TERMS AND CONDITIONS THEREIN INCORPORATED, INCLUDING THE CLAUSE SPECIFICALLY RELATING TO DISCOUNT. SEE, IN THIS CONNECTION, SIMPSON V. UNITED STATES, 172 U.S. 372; BRAWLEY V. UNITED STATES, 96 ID. 168, 173- 174; CF. COLD BLAST TRANSPORTATION COMPANY V. KANSAS CITY BOLT AND NUT COMPANY, 114 F. 77, 80-81.

MOREOVER, THE SETTLEMENT AGREEMENT PROCEEDED TO FIX THE EXACT AMOUNT TO BE REFUNDED BY YOU, WHICH AMOUNT WAS COMPUTED EXACTLY AS CONTEMPLATED BY THE PROVISION QUOTED ABOVE--- THAT IS, BY ALLOWING THE GOVERNMENT TO RETAIN THE FULL AMOUNT OF DISCOUNT ALREADY TAKEN. BY EXECUTING THE AGREEMENT AND REFUNDING THE AMOUNT CALLED FOR, WITHOUT ANY QUESTION, YOU MUST BE HELD TO HAVE ADOPTED BOTH THE LANGUAGE USED AND THE PRACTICAL INTERPRETATION PUT UPON IT BY THE COMPUTATION OF THE REFUND.

IN CONCLUSION, IT SHOULD BE STATED THAT WHILE WE HAVE ALLOWED REFUND OF THE DISCOUNT WHICH PREVIOUSLY HAD BEEN DEDUCTED ON THE AMOUNT REFUNDED BY THE CONTRACTOR UNDER A RENEGOTIATION SETTLEMENT (33 COMP. GEN. 364), THE FACTS IN THAT CASE ARE CLEARLY DISTINGUISHABLE FROM THOSE HERE INVOLVED, IN THAT THE SETTLEMENT AGREEMENT INVOLVED IN THE CASE CITED CONTAINED NO CLAUSE EXPRESSLY PROVIDING FOR THE RETENTION BY THE GOVERNMENT OF THE DISCOUNTS WHICH THERETOFORE HAD BEEN TAKEN, AS DID SUPPLEMENTAL AGREEMENT NO. 6 TO THE CONTRACT HERE INVOLVED.

ACCORDINGLY, THE ACTION HERETOFORE TAKEN WITH RESPECT TO YOUR CLAIM IS AFFIRMED.