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CONTRACTOR WHO FAILED TO FOLLOW BILLING INSTRUCTIONS ON WRITTEN PURCHASE ORDER AND SENT INVOICE TO ORDERING OFFICE RATHER THAN AS SPECIFIED MAY NOT HAVE CLAIM REPRESENTING PROMPT PAYMENT DISCOUNT ALLOWED. TO PROFESSIONAL CARPET SERVICE: THIS IS IN REPLY TO YOUR LETTER DATED JUNE 17. DENIED YOUR CLAIM BECAUSE THE RECORD SHOWED THAT YOUR INVOICE IN THE AMOUNT OF $71.36 FOR SERVICES RENDERED UNDER PURCHASE ORDER NO. 786-C&MS-69(W) WAS IN FACT PAID WITHIN THE ALLOWABLE 20 DAYS FROM THE DATE THE INVOICE WAS RECEIVED IN THE OFFICE SPECIFIED IN THE PURCHASE ORDER. THIS CONCLUSION WAS BASED UPON THE PROVISION IN YOUR BASIC CONTRACT THAT THE DISCOUNT TIME WOULD BE COMPUTED FROM THE DATE OF DELIVERY.

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B-169682, AUG. 19, 1970

CONTRACTS -- PAYMENTS -- DISCOUNTS SUSTAINING DISALLOWANCE OF CLAIM FOR PROMPT PAYMENT DISCOUNT TAKEN BY AGRICULTURE. CONTRACTOR WHO FAILED TO FOLLOW BILLING INSTRUCTIONS ON WRITTEN PURCHASE ORDER AND SENT INVOICE TO ORDERING OFFICE RATHER THAN AS SPECIFIED MAY NOT HAVE CLAIM REPRESENTING PROMPT PAYMENT DISCOUNT ALLOWED.

TO PROFESSIONAL CARPET SERVICE:

THIS IS IN REPLY TO YOUR LETTER DATED JUNE 17, 1970, REQUESTING RECONSIDERATION OF THE DISALLOWANCE OF YOUR CLAIM FOR $33.54 REPRESENTING THE PROMPT PAYMENT DISCOUNT (47% - 20 DAYS) TAKEN BY THE U.S. DEPARTMENT OF AGRICULTURE, CONSUMER AND MARKETING SERVICE, UNDER CONTRACT NO. GS-03S- 29827.

BRIEFLY STATED, OUR LETTER OF JUNE 12, 1970, DENIED YOUR CLAIM BECAUSE THE RECORD SHOWED THAT YOUR INVOICE IN THE AMOUNT OF $71.36 FOR SERVICES RENDERED UNDER PURCHASE ORDER NO. 786-C&MS-69(W) WAS IN FACT PAID WITHIN THE ALLOWABLE 20 DAYS FROM THE DATE THE INVOICE WAS RECEIVED IN THE OFFICE SPECIFIED IN THE PURCHASE ORDER. THIS CONCLUSION WAS BASED UPON THE PROVISION IN YOUR BASIC CONTRACT THAT THE DISCOUNT TIME WOULD BE COMPUTED FROM THE DATE OF DELIVERY, OR FROM THE DATE THE CORRECT INVOICE WAS RECEIVED IN THE OFFICE SPECIFIED BY THE GOVERNMENT, WHICHEVER WAS LATER. PURCHASE ORDER NO. 786-C&MS-69(W) WAS ISSUED ON OCTOBER 24, 1968, AND SPECIFIED THAT INVOICES SHOULD BE SENT TO THE CONSUMER AND MARKETING SERVICE AT HYATTSVILLE, MARYLAND.

YOUR LETTER OF JUNE 17 RECOGNIZES THAT YOUR BASIC CONTRACT WITH GSA PROVIDES THAT PURCHASE ORDERS ARE TO BE ISSUED PRIOR TO PERFORMANCE. HOWEVER, YOU STATE THAT GSA ADVISED YOUR COMPANY, AND THE GOVERNMENT AGENCIES, THAT YOU WERE TO ACCEPT ORDERS OVER THE TELEPHONE. SINCE THE TELEPHONE ORDER IN THE INSTANT CASE WAS RECEIVED FROM THE CONSUMER AND MARKETING SERVICE IN WASHINGTON, D.C., YOU SENT YOUR INVOICE THERE. YOU FURTHER STATE THAT AFTER YOUR INVOICE WAS RECEIVED BY THE ORDERING OFFICE, YOU RECEIVED A WRITTEN CONFIRMING ORDER, RATHER THAN A PURCHASE ORDER, SPECIFYING OTHER BILLING INSTRUCTIONS. IT IS YOUR OPINION THAT IN THESE CIRCUMSTANCES YOU WERE JUSTIFIED IN SENDING YOUR INVOICE TO THE ORDERING OFFICE; THAT THE 20 DAY DISCOUNT PERIOD SHOULD THEREFORE START TO RUN FROM RECEIPT OF YOUR INVOICE BY THE ORDERING OFFICE; AND SINCE PAYMENT WAS NOT MADE WITHIN 20 DAYS AFTER RECEIPT OF THE INVOICE BY THE ORDERING OFFICE, THE GOVERNMENT IS NOT ENTITLED TO THE DISCOUNT.

THE RECORD DOES NOT INDICATE THAT THERE WAS ANY UNDERSTANDING ON THE PART OF THE CONSUMER AND MARKETING SERVICE REGARDING THE BILLING PROCEDURES TO BE FOLLOWED OTHER THAN THE INSTRUCTIONS APPEARING IN YOUR WRITTEN CONTRACT AND THOSE APPEARING IN PURCHASE ORDER NO. 786-C&MS 69(W), WHICH WAS DATED TWO DAYS PRIOR TO SCHEDULED PERFORMANCE OF THE WORK. WHILE YOU ALLEGE THAT THE ORDERING OFFICE ONLY ISSUED A CONFIRMING PURCHASE ORDER (WITH THE BILLING INSTRUCTIONS SET OUT ABOVE) AFTER RECEIPT OF YOUR INVOICE, WE ARE UNABLE TO ACCEPT THIS AS AN ESTABLISHED FACT SINCE YOUR INVOICE CONTAINS THE PURCHASE ORDER NUMBER. FURTHER, WHILE YOUR INVOICE IS NOT DATED, IT IS STAMPED AS RECEIVED BY CONSUMER AND MARKETING SERVICE IN WASHINGTON ON NOVEMBER 8, 1968.

UNDER THE CIRCUMSTANCES, WE FIND NO SUFFICIENT JUSTIFICATION FOR YOUR FAILURE TO FOLLOW THE BILLING INSTRUCTIONS APPEARING ON THE WRITTEN CONFIRMING ORDER FOR THE PURCHASE. ACCORDINGLY, SINCE IT APPEARS THAT PAYMENT WAS MADE TO YOU ON NOVEMBER 29, 1968, WHICH WAS WITHIN 20 DAYS OF RECEIPT OF YOUR INVOICE BY CONSUMER MARKETING SERVICE IN HYATTSVILLE, MARYLAND, ON NOVEMBER 12, 1968, OUR JUNE 12, 1970 DISALLOWANCE OF YOUR CLAIM MUST BE AFFIRMED.

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