B-84960, MAY 25, 1949

B-84960, MAY 25, 1949

PRECIS-UNAVAILABLE

LIEUTENANT COLONEL C. G. DOYEL, F.D., U.S. ARMY:

REFERENCE IS MADE TO YOUR 1ST INDORSEMENT OF DECEMBER 29, 1948, TRANSMITTING A VOUCHER STATED IN FAVOR OF THE INLAND STEEL COMPANY IN THE AMOUNT OF $7,745.76, WITH THE REQUEST THAT AN ADVANCE DECISION BE RENDERED AS TO THE PROPRIETY OF PAYMENT THEREON. THE VOUCHER WAS FORWARDED TO THIS OFFICE BY THE CHIEF OF FINANCE ON MARCH 29, 1949, HIS FILE CSACF-EY 167/633198.

THE VOUCHER IS STATED TO COVER MATERIAL DELIVERED UNDER CONTRACT NO. W-11 -184-END(MSP-1128), DATED SEPTEMBER 10, 1948, PAYMENT FOR WHICH IS PROPOSED TO BE MADE FROM FUNDS APPROPRIATED UNDER THE FOREIGN AID APPROPRIATION ACT, 1949, 62 STAT. 1054. SECTION 202 OF THAT ACT-- WHICH NOW HAS BEEN INCORPORATED IN THE ECONOMIC COOPERATION ACT OF 1948 AS SECTION 112(1) THEREOF (PUBLIC LAW 47, APPROVED APRIL 19, 1949)-- PROVIDES THAT COMMODITIES SHALL NOT BE PURCHASED "AT PRICES HIGHER THAN THE MARKET PRICE PREVAILING IN THE UNITED STATES AT THE TIME OF THE PURCHASE ADJUSTED FOR DIFFERENCES IN THE COST OF TRANSPORTATION TO DESTINATION, QUALITY, AND TERMS OF PAYMENT." IN DECISION OF THIS OFFICE DATED AUGUST 4, 1948, B- 78649, TO THE ECONOMIC COOPERATION ADMINISTRATOR, IT WAS HELD THAT CERTIFICATES BY SUPPLIERS STATING THAT, TO THE BEST OF THEIR KNOWLEDGE AND BELIEF AND ON THE BASIS OF INFORMATION OBTAINED FROM SOURCES AVAILABLE TO THEM, THE PRICE CHARGED FOR COMMODITIES WAS NO HIGHER THAN THE MAXIMUM SPECIFIED IN SECTION 202, WOULD BE ACCEPTED AS PRIMA FACIE EVIDENCE FOR AUDIT PURPOSES OF COMPLIANCE WITH SAID SECTION. IT APPEARS THAT THE INLAND STEEL COMPANY WAS REQUESTED TO FURNISH SUCH A CERTIFICATE WITH RESPECT TO THE MATERIAL COVERED BY THE INSTANT VOUCHER AND, BY LETTER DATED DECEMBER 20, 1948, THAT COMPANY TRANSMITTED ITS INVOICE FOR THE MATERIAL, TOGETHER WITH A CERTIFICATE WHICH DIFFERED SLIGHTLY FROM THE ONE REQUESTED. THE COMPANY WAS REQUESTED TO CERTIFY THAT THE PRICES CHARGED BY IT WERE NO HIGHER THAN THE "MARKET PRICE PREVAILING IN THE UNITED STATES," AND THE CERTIFICATE FURNISHED STATES THAT SUCH PRICES ARE NO HIGHER THAN THE "EXPORT MARKET PRICE PREVAILING IN THE UNITED STATES." THE CONTRACTOR STATES IN ITS LETTER OF DECEMBER 20, 1948, THAT THE MATERIAL INVOLVED WAS PREPARED AND PACKED FOR EXPORT TO JAPAN- AS WAS REQUIRED BY ITS CONTRACT.

THE MAXIMUM PRICE SPECIFIED IN SECTION 202 OF THE FOREIGN AID APPROPRIATION ACT, 1949, THAT IS THE "MARKET PRICE PREVAILING IN THE UNITED STATES" AS ADJUSTED, IS NOT DEFINED EITHER AS THE "EXPORT" OR "DOMESTIC" MARKET PRICE. HOWEVER, SINCE COMMODITIES PURCHASED UNDER THE ECONOMIC COOPERATION ACT OF 1948 ARE TO BE EXPORTED AND A DOMESTIC MARKET PRICE ARE USUAL IN THE TRADE. IN FACT, THE SUPPLIER'S CERTIFICATE PRESCRIBED BY ECA EXPRESSLY DEFINES THE PREVAILING MARKET PRICE AS "THE EXPORT MARKET PRICE, WHERE SUCH A PRICE IS CUSTOMARY IN THE TRADE." SEE PARAGRAPH (7) OF SUCH CERTIFICATE AS SET FORTH IN SECTION 201.19 (D) OF ECA REGULATION 1, PAGE 2172, FEDERAL REGISTER FOR MAY 3, 1949.

THEREFORE, YOU ARE ADVISED THAT THE CERTIFICATE EXECUTED BY THE INLAND STEEL COMPANY WILL BE ACCEPTED BY THIS OFFICE FOR AUDIT PURPOSES AS PRIMA FACIE EVIDENCE OF COMPLIANCE WITH SECTION 202 OF THE FOREIGN AID APPROPRIATION ACT, 1949, AND SECTION 112(1) OF THE ECONOMIC COOPERATION ACT OF 1948, AS AMENDED.

ACCORDINGLY, PAYMENT ON THE VOUCHER, WHICH IS RETURNED HEREWITH, IS AUTHORIZED, IF OTHERWISE CORRECT.