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B-214479 1 (1984-07-26)

handle is hein.gao/gaobadlve0001 and id is 1 raw text is: THE COMPTEOLLEN UENERAL OICIION OP THE UNITEO mTATES WASHINGTON, O.C. 054U FILE: B-214479 DATE: July 26, 1984 MATTER OF:Social Security Administration--Late Payment Charges for Utility Services DIQEST: A regulated public utility's approved tariff constitutes a contract between the parties for service. The Prompt Payment Act and GAO decisions provide that contract payment terms must be given effect as written, even though the Government's liability for late charges is difficult to avoid due to the very short period designated by the tariff for timely payments. By letter dated February 3, 1984 (reference SMF-235), the Director of the Social Security Administration's (SSA) Divi- sion of Finance requested our opinion on several problems related to invoices from the General Telephone Company of the Southwest (hereafter GTE). Southwest, with its parent company, General Telephone ana Electronics, is the sole supplier of telephone services in some localities, and it serves SSA field offices in Texas and in other states. To illustrate its problem, SSA cites the Texas General Exchange Tariff, approved by the Texas Public Utility Commission, under the terms of which GTE has assessed late charges on its bills to SSA for fiscal years 1983 and 1984, totalling $7,937.39 as of the date of the request. SSA has been disputing these charges, claiming that the more liberal terms of the Prompt Payment Act, 31 U.S.C. SS 3901-09 (1982), should control late payments rather than the terms of the tariff. For the reasons explained below, the Texas late charges are properly payable by SSA, and are not contrary to the Prompt Payment Act. The tariff provides that GTE's commercial accounts are due 15 days after invoices are postmarked (or prepared if no postmark exists). A one time only late charge of 5 percent is assessed on delinquent commercial accounts on the 16th day. The problem is that there is a statutory requirement that long distance charges be certified as official Government business by the agency making the calls. 31 U.S.C. S 1348 (1982). In view of the processing time required in sending invoices to Baltimore for final certification and payment, according to SSA, it is extremely difficult for it to make timely payment

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