B-160505, JAN. 11, 1967

B-160505, JAN. 11, 1967

TO THE SECRETARY OF AGRICULTURE:

REFERENCE IS MADE TO THE LETTER DATED DECEMBER 5, 1966, FROM THE ASSISTANT SECRETARY, RECOMMENDING REMISSION OF LIQUIDATED DAMAGES IN THE AMOUNT OF $8,062.80 ASSESSED AGAINST BNS INTERNATIONAL SALES CORPORATION, NEW YORK, NEW YORK, IN CONNECTION WITH CONTRACT NO. 12-25 100-15217.

IT APPEARS THAT YOUR RECOMMENDATION IS BASED UPON 41 U.S.C. 256A, WHICH PROVIDES FOR THE REMISSION BY THE HEAD OF A FEDERAL AGENCY OF LIQUIDATED DAMAGES WHICH HAVE BEEN ASSESSED FOR DELAY IF THERE IS A PROVISION IN THE CONTRACT WHICH PROVIDES FOR SUCH ASSESSMENT. THE PERTINENT PARTS OF THE INSTANT CONTRACT ARE PARAGRAPHS 530.11 AND 530.12 (B) WHICH ARE CONTAINED IN DEPARTMENT OF AGRICULTURE ANNOUNCEMENT PY-29 ENTITLED "CHICKEN EXPORT PAYMENT PROGRAM GMX 73A.' NEITHER OF THOSE PARAGRAPHS PROVIDES FOR LIQUIDATED DAMAGES FOR DELAY; THE FORMER PROVIDES FOR THE REFUND OF EXPORT PAYMENTS IN THE EVENT THE CHICKEN DID NOT ENTER THE APPLICABLE COUNTRY SPECIFIED IN THE CONTRACT OR, AFTER ENTRY, WAS TRANSHIPPED TO ANOTHER COUNTRY, WHILE THE LATTER PROVIDES FOR LIQUIDATED DAMAGES FOR FAILURE TO ENTER THE CHICKEN INTO THE APPLICABLE COUNTRY SPECIFIED IN THE CONTRACT. DELAY IS NOT MENTIONED AS A CONDITION IN EITHER PARAGRAPH. WE, THEREFORE, CANNOT APPROVE OF REMISSION UNDER 41 U.S.C. 256A.

WE NOTE, HOWEVER, THAT FAILURE TO MAIL EVIDENCE OF ENTRY WITHIN 60 CALENDAR DAYS AFTER THE EXPIRATION OF THE EXPORT PERIOD, OR ANY EXTENSION THEREOF, CONSTITUTES PRIMA FACIE EVIDENCE OF FAILURE TO ENTER THE CHICKEN INTO THE APPLICABLE COUNTRY. PRIMA FACIE PROOF IS MERELY AN ASSUMPTION OF A FACT OR FACTS AND IS REBUTTABLE BY ADDITIONAL PROOF. IN THIS CASE, WHEN PROPER EVIDENCE OF ENTRY WAS NOT FURNISHED, USDA APPARENTLY ASSUMED THAT ENTRY INTO THE APPLICABLE COUNTRY WAS NOT ACCOMPLISHED AND IT ASSESSED DAMAGES. SUBSEQUENTLY, USDA WAS FURNISHED WITH SATISFACTORY PROOF THAT ENTRY INTO THE APPLICABLE COUNTRY HAD BEEN ACCOMPLISHED. WE FEEL THAT THE INCLUSION OF THE PRIMA FACIE STANDARD INDICATES AN INTENTION ON THE PART OF USDA TO ACCEPT LATE PROOF. IF THE SOLE PURPOSE OF USDA WAS TO COLLECT DAMAGES UPON FAILURE TO FURNISH PROOF OF ENTRY WITHIN A SPECIFIED TIME PERIOD, LATE PROOF WOULD NOT BE MATERIAL. THIS WAS NOT THE CASE. RATHER, THE PRIMARY CONCERN SEEMS TO HAVE BEEN THE ACCOMPLISHMENT OF THE TASK, EVEN THOUGH LATE. INASMUCH AS THE CONTRACTING PARTIES CONTEMPLATED COMPLETION, WE MUST HOLD THAT THEY ALSO CONTEMPLATED PAYMENT UPON COMPLETION. THE PAYMENT CLAUSE OF THE CONTRACT STATES THAT PAYMENT SHALL BE MADE UPON RECEIPT OF THE REQUIRED DOCUMENTATION BY USDA AND, INASMUCH AS THE PURPOSES OF THE CONTRACT HAVE BEEN FULFILLED, WE FEEL IT IS WITHIN THE INTENTION OF THE PARTIES AND THE SPIRIT OF THE CONTRACT THAT PAYMENT IN FULL BE MADE TO THE CONTRACTOR.

ACCORDINGLY, THE AMOUNT OF $3,493.75 DUE BNS FROM THE AGRICULTURE STABILIZATION AND CONSERVATION SERVICE MAY BE PAID, SUBJECT TO THE ADJUSTMENT MENTIONED IN THE NEXT TO THE LAST PARAGRAPH OF THE DECEMBER 5, 1966, LETTER.