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B-184351 1 (1976-01-27)

handle is hein.gao/gaobaddrz0001 and id is 1 raw text is: VAAS H INGTON, [D.C. 205'4B FILE: B-184351 DATE: January 27, 1976 MATTER OF: Philadelphia Scientific Controls Inc. DIGEST: Government may not be deprived of its right to prompt o payment discount under contract where delay in making payment is occasioned by contractor. Therefore, Government is entitled to retain discount amount where failure to make payments to contractor within discount period solely was attributable to contractor's bankruptcy proceedings and payment was made promptly upon its -receipt of notice of appointment of receiver for bankrupt contractor. Philadelphia Scientific Controls Inc. (PSC) has requested reimbursement of prompt payment discounts totaling 8200. 29, taken by the Defense Supply Agency in payment of invoices under 13 contracts. Payment was withheld since the Government had received notice of the bankruptcy proceedings on PSC on Novenler 11, 1974, which was prior to any of thc billings involved in this case. Treasury checks were issued in payment on January 7, 1975, after the Government had received notice of the Order Appointing a Receiver on January 3, 1975. The main contention presented by PSC is that the prompt payment discounts taken by the Government are inappropriate in that the period for prompt payment as provided in each contract had expired by the time of payment on January 7, 1975. PSC bases this argument on grounds that the time from either the date of the acceptance of the shipment or the date of the invoice (whichever was later in point of time), to the date of the issuance of the Government checks, in each case, was in excess of the discount period provided by the applicable contract. The agency does not dispute the dates in question; rather it contends that the dates used by PSC to commence the running of the period were not appropriate in the instant case. This conten- tion is based on the fact that the Government was notified of the bankruptcy of PSC on November 11, 1974, and that it promptly paid the billings upon receipt of the notice of the court's Order Appointing a Receiver on January 3, 1975. -1-

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