B-38761, DECEMBER 23, 1943, 23 COMP. GEN. 462

B-38761, DECEMBER 23, 1943, 23 COMP. GEN. 462

EMPTY CONTAINERS - DISPOSITION OF REFUNDS OF DEPOSITS WHERE AN EMPTY CONTAINER, UPON WHICH THE GOVERNMENT PLACED A DEPOSIT AT THE TIME OF DELIVERY OF ITS CONTENTS, IS NOT RETURNED WITHIN THE TIME LIMIT ALLOWED, AND UNDER THE TERMS OF THE PURCHASE ORDER THE SELLER CONSIDERS THAT TITLE THEREOF PASSES TO THE GOVERNMENT UPON EXPIRATION OF THE TIME LIMIT, THE AMOUNT THEREAFTER RECEIVED FROM THE CONTRACTOR UPON RETURN OF THE CONTAINER PARTAKES OF THE NATURE OF PROCEEDS FROM A SALE OF SURPLUS GOVERNMENT PROPERTY, AND, AS SUCH, SHOULD BE COVERED INTO THE TREASURY AS MISCELLANEOUS RECEIPTS, RATHER THAN CREDITED TO THE APPROPRIATION FROM WHICH PAYMENT WAS MADE AS IS THE CASE WITH RESPECT TO DEPOSITS FOR CONTAINERS RETURNED WITHIN THE PRESCRIBED TIME LIMIT.

COMPTROLLER GENERAL WARREN TO N. A. OLMSTEAD, DEPARTMENT OF AGRICULTURE, DECEMBER 23, 1943:

I HAVE YOUR LETTER OF DECEMBER 3, 1943, REFERENCE T-9.034, AS FOLLOWS:

THE ENCLOSED VOUCHER IN FAVOR OF COMMERCIAL SOLVENTS CORPORATION, 17 EAST 42ND STREET, NEW YORK 17, NEW YORK, FOR $43.87, LISTS A DRUM DEPOSIT CHARGE OF $5.00 AND YOUR DECISION IS DESIRED AS TO WHETHER FUNDS UNDER THE CONTROL OF THE BUREAU OF ANIMAL INDUSTRY ARE AVAILABLE FOR THE PAYMENT OF DEPOSIT CHARGES ON RETURNABLE CONTAINERS. COPIES OF CORRESPONDENCE WITH THE VENDOR REGARDING THESE CHARGES ARE ENCLOSED FOR YOUR INFORMATION, TOGETHER WITH A COPY OF PURCHASE ORDER 6473A.

THE PURCHASING OFFICER OF THE BUREAU HAS ADVISED THAT MANY VENDORS ARE UNWILLING TO FURNISH SUPPLIES IN RETURNABLE CONTAINERS WITHOUT PAYMENT OF A DEPOSIT CHARGE TO GUARANTEE THE RETURN OF THE CONTAINER. IN SOME INSTANCES, QUOTATIONS AND BIDS HAVE BEEN SOLICITED REQUESTING THE VENDOR TO STATE THE NUMBER OF DAYS DURING WHICH THE CONTAINER WOULD BE LOANED TO THE BUREAU FREE OF CHARGE AND THE RENTAL RATE TO BE PAID IF THE CONTAINER WAS NOT RETURNED PRIOR TO THE EXPIRATION OF THE FREE-LOAN PERIOD. SOME VENDORS HAVE REFUSED TO FURNISH CONTAINERS ON THIS BASIS AND INSIST UPON PAYMENT OF A DEPOSIT CHARGE AT THE TIME PAYMENT IS MADE FOR THE SUPPLIES. IF FUNDS UNDER CONTROL OF THE BUREAU OF ANIMAL INDUSTRY MAY LEGALLY BE USED FOR PAYMENT OF DEPOSIT CHARGES, ANSWERS ARE DESIRED TO THE FOLLOWING QUESTIONS:

1. MAY THE AMOUNT RECEIVED FROM THE VENDOR AS A REFUND OF THE DEPOSIT CHARGE BE DEPOSITED TO THE CREDIT OF THE APPROPRIATION FROM WHICH THE DEPOSIT CHARGE WAS ORIGINALLY PAID?

2. IF A CONTAINER ON WHICH A DEPOSIT CHARGE HAS BEEN PAID IS DESTROYED WHILE IT IS IN POSSESSION OF THE BUREAU WITHOUT NEGLIGENCE ON THE PART OF THE BUREAU EMPLOYEE, IS THE BUREAU ENTITLED TO A REFUND OF THE AMOUNT PAID AS A DEPOSIT?

IF IT IS YOUR DECISION THAT FUNDS UNDER CONTROL OF THE BUREAU OF ANIMAL INDUSTRY ARE NOT AVAILABLE FOR PAYMENT OF DEPOSIT CHARGES IS THERE ANY OBJECTION TO THE PURCHASE BY THE BUREAU OF THE CONTAINER FURNISHED WITH THE INITIAL PURCHASE OF SUPPLIES FROM A PARTICULAR VENDOR AND EXCHANGING THIS CONTAINER FOR THE CONTAINER TO BE FURNISHED WITH THE NEXT SUBSEQUENT PURCHASE FROM THE SAME VENDOR IN ORDER TO AVOID PAYMENT OF DEPOSIT CHARGES?

THE VOUCHER ITEMIZES THE CHARGE AS FOLLOWS:

CHART:

DRUM GOLD SHIELD ETHYL ABSOLUTE ALCOHOL USP 200

PROOF TAX FREE-----------------------54 WG ?743 $40.12

LESS: CREDIT 1 RETURNABLE DRUM-------$1.25 $1.25

PLUS: DRUM DEPOSIT CHARGE------------$5.00 $5.00

$43.87

THE PURCHASE HERE INVOLVED RESULTED FROM AN OPEN MARKET QUOTATION OF OCTOBER 11, 1943, AND ON THE PURCHASE ORDER ISSUED OCTOBER 15, 1943, APPEARS A NOTATION AS FOLLOWS:

NOTE: AN ALLOWANCE OF $1.25 TO BE MADE FOR INVOICE VALUE OF ALCOHOL. DRUM TO BE CHARGED AT $5.00 WHICH IS RETURNABLE FOR FULL CREDIT IF RETURNED TO PLANT OF ORIGIN, FREIGHT COLLECT, IN GOOD CONDITION WITHIN 45 DAYS FROM DATES OF INVOICE.

IN RESPONSE TO AN ADMINISTRATIVE INQUIRY REGARDING THE ABOVE NOTE AND THE BILL AS PRESENTED BY THE VENDOR IT WAS STATED IN THE COMPANY'S LETTER OF NOVEMBER 24, 1943, AS FOLLOWS:

PLEASE KNOW THAT ALL OF OUR SALES OF INDUSTRIAL ALCOHOL ARE IN ACCORD WITH CEILING PRICES ESTABLISHED BY THE O.P.A. THE CREDIT WHICH WE ALLOWED YOU FOR ONE RETURNABLE DRUM OF $1.25 REPRESENTS THE USED VALUE OF THE CONTAINER AND IS IN ACCORD WITH THE O.P.A. USED DRUM PRICE CEILING IN EFFECT AT THE TIME WE ISSUED OUR QUOTATION COVERING YOUR PURCHASE ON OCTOBER 11, 1943.

TO CONSERVE STEEL REQUIRED FOR THE MANUFACTURE OF STEEL DRUMS THE O.P.A. MAXIMUM PRICE REGULATION NO. 28 PROVIDES THAT THE SELLER MAY REQUIRE THE BUYER TO RETURN A CONTAINER AND HE MAY CHARGE A REASONABLE DEPOSIT FOR THE RETURN OF SUCH CONTAINER. OUR DEPOSIT CHARGE IS THEREFORE $5.00 FOR THE DRUM WHICH CONTAINER IS RETURNABLE FOR FULL CREDIT IF IT IS RETURNED TO OUR PLANT OF ORIGIN IN GOOD CONDITION WITHIN 45 DAYS FROM DATE OF OUR INVOICE. IN OTHER WORDS YOU PAY US THE DEPOSIT CHARGE OF $5.00 AND IF YOU DO NOT ELECT TO RETURN THE CONTAINER FOR FULL CREDIT THE TITLE OF THE DRUM OF COURSE WOULD AUTOMATICALLY PASS TO YOU UPON YOUR FAILURE TO RETURN THE DRUM WITHIN THE PERIOD SPECIFIED. THE PURPOSE OF THE DEPOSIT CHARGE FOR CONTAINERS AS PROVIDED IN THE O.P.A. REGULATION IS TO KEEP THE DRUMS IN SERVICE FOR AS MANY TRIPS AS THEY WILL STAND. STILL, CONTAINERS ARE VERY SHORT AND THE DEPOSIT SYSTEM IS THE BEST COURSE TO FOLLOW FROM A CONSERVATION STANDPOINT.

IN DECISION OF JANUARY 30, 1940, B-8121, TO THE SECRETARY OF THE INTERIOR, IT WAS STATED:

IT HAS BEEN THE RULE OF THE ACCOUNTING OFFICERS OF THE GOVERNMENT FOR A NUMBER OF YEARS THAT WHEN SPECIFIC PROVISIONS IS MADE IN PURCHASE CONTRACTS OR AGREEMENTS FOR THE RETURN OF CONTAINERS TO THE CONTRACTOR AT A STIPULATED PRICE, THE AMOUNT PAID ORIGINALLY FOR SUCH CONTAINERS IS ONLY A TENTATIVE CHARGE AGAINST THE APPROPRIATION INVOLVED, AND THE RECEIPTS FROM THE RETURN OF SAID CONTAINERS ARE FOR DEPOSITING TO THE CREDIT OF THE APPROPRIATION FROM WHICH TENTATIVE PAYMENT WAS MADE.

THAT RULE HAS NO APPLICATION IN RESPECT OF THE AMOUNT OF THE CREDIT ALLOWED ON THE VOUCHER SUBMITTED, AS THERE IS NOT INVOLVED HERE THE REFUND OF THE DEPOSIT MADE FOR THE RETURN OF A CONTAINER. THE DRUM INVOLVED HERE WAS NOT RETURNED WITHIN THE 45 DAY PERIOD FROM DATE OF INVOICE DURING WHICH THE DEPOSIT WOULD HAVE BEEN REFUNDED. WHERE AN EMPTY CONTAINER, UNDER THE TERMS OF A PURCHASE SUCH AS HERE INVOLVED, IS NOT RETURNED WITHIN THE TIME LIMIT ALLOWED, THE SELLER CONSIDERS THAT TITLE THERETO PASSES TO THE UNITED STATES AND, IF SO, WHEN IT IS RETURNED AFTER IT HAS BECOME THE PROPERTY OF THE UNITED STATES, THE AMOUNT RECEIVED THEREFOR, FROM THE GOVERNMENT'S STANDPOINT, PARTAKES OF THE NATURE OF PROCEEDS FROM A SALE OF SURPLUS PROPERTY AND, AS SUCH, IS FOR COVERING INTO THE TREASURY AS MISCELLANEOUS RECEIPTS. WHERE A DEPOSIT IS REQUIRED TO INSURE THE RETURN OF A CONTAINER, THE RESPONSIBILITY OF THE BAILEE GENERALLY IS ENLARGED TO THE EXTENT OF AN INSURER AND THE RETURN OF THE CONTAINER IS A CONDITION PRECEDENT TO REFUND OF THE DEPOSIT. GENERALLY, THERE WOULD BE NO MERIT IN A CLAIM FOR REFUND OF A DEPOSIT WHERE THE CONTAINER HAS BEEN DESTROYED AND BECAUSE THEREOF IT CANNOT BE RETURNED.

ACCORDINGLY, YOU ARE ADVISED THAT THE APPROPRIATION AVAILABLE FOR THE PURCHASE OF THE ALCOHOL HERE INVOLVED IS AVAILABLE, ALSO, FOR PAYMENT OF DEPOSIT CHARGES REQUIRED BY THE TERMS OF THE AGREEMENT ON THE DRUM CONTAINING THE ALCOHOL PURCHASED, AND THAT THE $1.25 CREDIT ALLOWED FOR THE USED VALUE OF THE DRUM RETURNED SHOULD BE DEPOSITED AND COVERED INTO THE TREASURY AS MISCELLANEOUS RECEIPTS UNDER THE RECEIPT SYMBOL AND TITLE,"4260--- REFUND ON EMPTY CONTAINERS.'