R. P. Dixon

• Decision Date: 30 November 1955
• Docket Number: B-125787
• Parties: CAPTAIN R. P. DIXON, JR., FC, FINANCE AND ACCOUNTING OFFICER, DEPARTMENT OF THE ARMY
• Court: Comptroller General of the United States

CAPTAIN R. P. DIXON, JR., FC, FINANCE AND ACCOUNTING OFFICER, DEPARTMENT OF THE ARMY

No. B-125787

Comptroller General of the United States

November 30, 1955

By second indorsement dated October 13, 1955, the chief of finance, department of the army, forwarded to this office your letter of September 30, 1955, alffc-fa, requesting an advance decision on the propriety of paying a voucher stated in favor of the Indiana BELL telephone company for $28 554.63, representing termination charges for telephone equipment at camp atterbury, Indiana, furnished under contract no. Da-49-068-sc-040, dated September 1, 1950, as amended. The use of the equipment was discontinued on April 30, 1954.

The amount claimed is itemized as follows:

Chart

3 position switchboard, 205

Selectors, 150 connectors and

1 power plant installed9/1/50;

16 mos. At $718.75 $11, 500.00

144 selectors and 75 connectors

Installed1/16/53; 441/2 mos. 17, 054.63

$28, 554.63

The telephone company contends that based on the established rates at the termination date (April 30, 1954), the termination charges are equal to 50 percent of the unbilled monthly rental for such equipment for the unexpired portion of the initial service period, and that therefore the termination rate is not constant but is subject to change with changing rates made pursuant to law after installation of the equipment. On the other hand, the office of the commanding general, headquarters fifth army, appears to be of the view that the termination rate effective at the date of installation determines the amount due the company for termination of the equipment prior to expiration of the contract term, and that the first item of the company's bill should therefore be only $9, 800, instead of $11, 500 as claimed. There is no controversy over the second item for $17, 054.63, since the equipment represented by that item was installed after the involved rate increased became effective.

Installation of the equipment was made under the above contract. The termination provision contained in the rider to the contract provides, as follows:

"Pursuant to the terms and conditions of this contract the whole or any part thereof May be terminated by the united states upon ten days' notice in writing to the contractor, "subject to any charges applicable thereto.' in the event of the termination of the following facilities furnished under this contract within the minimum service period of five (5) years at the same location, a termination charge shall apply, in accordance with the general tariff of the contractor, equal to such proportion of the basic termination charge for each group of facilities listed below as the unexpired portion of the minimum service period for each of these groups of facilities bears to the full minimum service period. It being understood further that where portions of the following facilities are terminated within the minimum service period, pro rate termination charges apply.'

The original termination charge is stipulated in the contract rider as $39, 450, and...