B-25583, MAY 23, 1942, 21 COMP. GEN. 1039

B-25583, MAY 23, 1942, 21 COMP. GEN. 1039

TRANSPORTATION - FREIGHT FORWARDER SERVICES A REQUEST FOR A "RULING" AS TO WHETHER THE GENERAL ACCOUNTING OFFICE "WILL APPROVE" FREIGHT CHARGES FOR FUTURE FREIGHT FORWARDER SERVICES PAID IN CONFORMITY WITH THE RATE BASES SUGGESTED IN THE REQUEST FOR DECISION IS SUBJECT TO THE RULE THAT AN ADVANCE DECISION OF THE COMPTROLLER GENERAL DETERMINES ONLY QUESTIONS OF LAW, RATHER THAN QUESTIONS OF FACT, AND IS NOT CONTROLLING IN THE AUDIT OF SUBSEQUENT PAYMENTS IN THE SAME OR ANY OTHER CASE IF THE FACTS ARE DIFFERENT FROM THE STATEMENT OF FACTS ON WHICH THE DECISION IS RENDERED. THE DETERMINATION OF ADMINISTRATIVE OFFICERS TO WHOM AUTHORITY IS DELEGATED BY THE HEAD OF THE DEPARTMENT, THAT THE NEEDS OF THE GOVERNMENT REQUIRE THE SERVICES OF FREIGHT FORWARDERS, WILL NOT BE QUESTIONED BY THE GENERAL ACCOUNTING OFFICE, BUT WHETHER THE SERVICES SO PROCURED WERE AVAILABLE AT LAWFULLY FILED AND PUBLISHED TARIFF RATES OPEN TO THE PUBLIC IS A QUESTION OF LAW FOR DETERMINATION BY THE ACCOUNTING OFFICERS, AND AN ERRONEOUS ADMINISTRATIVE DETERMINATION WITH RESPECT THERETO WOULD NOT BE CONTROLLING. THERE IS NO OBJECTION TO A LIMITATION TO BE INCLUDED IN CONTRACTS FOR SPECIAL SERVICES RENDERED BY FREIGHT FORWARDERS AT OTHER THAN LAND GRANT RATES, THAT "THE MAXIMUM RATES CHARGED SHALL BE THE LOWEST STANDARD LESS CARLOAD/ALL-RAIL RATES OR CHARGES AND THAT THE TOTAL CHARGE FOR A MILITARY SHIPMENT WILL NOT BE GREATER THAN THE CHARGE FOR A MINIMUM CARLOAD * * * AT THE STANDARD CARLOAD ALL-RAIL RATE * * *, NOTWITHSTANDING THE EXISTENCE OF LOWER RAIL-WATER OR ALL-WATER RATES," PROVIDED THE SERVICES RENDERED ARE NOT AVAILABLE TO THE PUBLIC AT LARGE ON THE BASIS OF LOWER LAWFULLY FILED AND PUBLISHED TARIFF RATES. IF THE SERVICES RENDERED AS SPECIAL UNDER A CONTRACT FOR TRANSPORTATION BY FREIGHT FORWARDERS AT OTHER THAN LAND-GRANT RATES ARE NOT AVAILABLE AT RATES PUBLISHED IN THE TARIFFS OF CARRIERS OTHER THAN FREIGHT FORWARDERS, THEN THE CLASSIFICATIONS AND RATINGS PRESCRIBED FOR USE IN CONNECTION WITH THESE LATTER RATES, WHICH DIFFER FROM THE CLASSIFICATIONS AND RATINGS OF FREIGHT FORWARDERS, WOULD NOT BE CONTROLLING AS A TARIFF REQUIREMENT UPON THE CHARGES OF THE FORWARDERS.

COMPTROLLER GENERAL WARREN TO THE SECRETARY OF WAR, MAY 23, 1942:

I HAVE YOUR LETTER OF MAY 8, 1942, AS FOLLOWS:

I HAVE CAREFULLY CONSIDERED YOUR LETTER OF MAY 4, 1942, FILE B-25583, IN REPLY TO MY LETTER OF APRIL 23, 1942, IN WHICH YOU HAVE RULED, IN SUBSTANCE, THAT WHERE NEEDS OF THE GOVERNMENT REQUIRE TRANSPORTATION SERVICE BY FREIGHT FORWARDERS WHICH IS NOT AVAILABLE AT THE PUBLISHED TARIFF RATES OF THE RAILROADS, AN AGREEMENT WITH THE FORWARDERS TO FURNISH TRANSPORTATION SERVICE AT OTHER THAN LAND-GRANT RATES, WOULD APPEAR TO BE AUTHORIZED AND THAT WHERE PAYMENTS FOR SUCH SPECIAL SERVICE ARE MADE IN ACCORDANCE WITH A CONTRACT FOR THE APPLICATION OF AGREED RATES YOUR OFFICE WILL NOT WITHHOLD CREDIT FOR SUCH PAYMENTS MERELY BECAUSE SUCH AGREED RATES WERE IN EXCESS OF NET LAND-GRANT RATES APPLICABLE FOR SERVICE OVER LAND-GRANT RAILROADS.

YOU FURTHER CALL ATTENTION TO THE FACT THAT THE PROPOSED CONTRACT CLAUSE, COPY OF WHICH IS QUOTED ON PAGE 2 OF YOUR LETTER OF MAY 4, 1942, MAKES REFERENCE TO CERTAIN OTHER CLAUSES, THE PROVISIONS OF WHICH ARE NOT SHOWN AND THAT ACCORDINGLY MY QUESTIONS CANNOT BE ANSWERED MORE SPECIFICALLY THAN AS INDICATED IN YOUR LETTER WHICH YOU STATE WILL BE CONTROLLING IN THE AUDIT OF THE PAID ACCOUNTS BY YOUR OFFICE.

I AM ATTACHING HERETO A COPY OF PROPOSED " FREIGHT FORWARDER SERVICE AGREEMENT WITH WAR DEPARTMENT," WHICH CONTAINS THE PROPOSED CONTRACT CLAUSES IN QUESTION, AND FURNISHES YOU THE DESIRED INFORMATION.

CONSIDERATION OF THE RULING MADE IN YOUR LETTER OF MAY 4, 1942, HAS RAISED SEVERAL ADDITIONAL POINTS AS TO WHICH YOUR SUPPLEMENTAL RULING IS HEREBY REQUESTED. THESE QUESTIONS ARE AS FOLLOWS:

(1) ON PAGE 12-13 OF YOUR LETTER OF MAY 4, 1942, YOU STATE AS FOLLOWS:

"ACCORDINGLY, YOU ARE INFORMED THAT WHERE IT IS ADMINISTRATIVELY DETERMINED THAT THE NEEDS OF THE GOVERNMENT SERVICE REQUIRE A HANDLING BY FORWARDERS, IN CONNECTION WITH TRANSPORTATION, THAT IS NOT AVAILABLE AT THE PUBLISHED TARIFF RATES OF THE RAILROADS BUT IS PROCURABLE FROM FORWARDERS, AN AGREEMENT WITH THE FORWARDERS TO FURNISH SUCH TRANSPORTATION SERVICE AT OTHER THAN LAND-GRANT RATES WOULD APPEAR TO BE AUTHORIZED; AND WHERE THE RECORD IN CONNECTION WITH DISBURSEMENTS SHOWS THAT PAYMENTS FOR SUCH SPECIAL SERVICES ARE MADE PURSUANT TO AND IN ACCORDANCE WITH A CONTRACT FOR THE APPLICATION OF AGREED RATES, THIS OFFICE WILL NOT BE REQUIRED TO WITHHOLD CREDIT FOR SUCH PAYMENTS MERELY BECAUSE SUCH AGREED RATES WERE IN EXCESS OF NET LAND-GRANT RATES APPLICABLE FOR SERVICE OVER LAND-GRANT RAILROADS.'

YOUR RULING IS REQUESTED AS TO WHETHER THE ADMINISTRATIVE DETERMINATION OF DULY AUTHORIZED OFFICERS OF THE WAR DEPARTMENT, TO WHOM AUTHORITY IS DELEGATED, WILL BE BINDING AND THAT THE FREIGHT CHARGES ASSESSED AND PAID PURSUANT THERETO, WILL NOT BE SUBJECT TO SUSPENSION OR DISALLOWANCE.

(2) YOUR RULING IS REQUESTED AS TO WHETHER YOU WILL APPROVE THE PAYMENT OF FREIGHT CHARGES AS PROVIDED BY SECTION 7 (D) OF THE PROPOSED CONTRACT.

(3) YOUR RULING IS REQUESTED AS TO WHETHER YOU WILL APPROVE THE PAYMENT OF FREIGHT CHARGES ASSESSED BY FORWARDERS IN ACCORDANCE WITH THE PROPOSED CONTRACT, NOTWITHSTANDING THE FACT THAT THE METHODS OF RATING AND CLASSIFICATION OF FREIGHT FORWARDERS DIFFER FROM THE METHODS EMPLOYED IN THE TARIFFS OF CARRIERS NOW SUBJECT TO FEDERAL REGULATION.

WITH REFERENCE TO THE QUESTIONS SO PRESENTED IT SEEMS APPROPRIATE TO INVITE ATTENTION TO THE FACT THAT AS STATED BY A FORMER COMPTROLLER GENERAL IN A DECISION, A.D. 6680, MAY 20, 1922, TO A COLLECTOR OF CUSTOMS-

THE FUNCTION OF AN ADVANCE DECISION OF THE COMPTROLLER GENERAL IS TO DECIDE DOUBTFUL QUESTIONS INVOLVED IN PAYMENTS TO BE MADE BY DISBURSING OFFICERS. SUCH A DECISION CANNOT PROPERLY BE MADE TO COVER AN ADVANCE EXAMINATION AND APPROVAL OF VOUCHERS WHICH IS AN AUDITING FUNCTION FOR EXERCISE IN THE SETTLEMENT OF DISBURSING ACCOUNTS.

YOUR REQUEST, THEREFORE, FOR A "RULING" AS TO WHETHER THIS OFFICE "WILL APPROVE" FREIGHT CHARGES PAID IN CONFORMITY WITH THE BASES SUGGESTED IN YOUR SUBMISSION, OR THAT SAID CHARGES "WILL NOT BE SUBJECT TO SUSPENSION OR DISALLOWANCE" MAKES IT NECESSARY TO POINT OUT THAT WHILE DECISIONS RENDERED TO DISBURSING OFFICERS OR HEADS OF DEPARTMENTS PURSUANT TO THE PROVISIONS OF SECTION 8 OF THE DOCKERY ACT OF JULY 31, 1894, 28 STAT. 207, AS AMENDED (31 U.S.C. 74),"UPON ANY QUESTION INVOLVING A PAYMENT TO BE MADE BY THEM OR UNDER THEM * * * SHALL GOVERN THE GENERAL ACCOUNTING OFFICE IN PASSING UPON THE ACCOUNT CONTAINING SAID DISBURSEMENT," IT HAS BEEN HELD UNIFORMLY BY THE ACCOUNTING OFFICERS THAT ADVANCE DECISIONS NECESSARILY ARE BASED UPON THE STATEMENT OF FACTS SUBMITTED AS THE BASIS FOR THE REQUEST FOR ADVANCE DECISION AND WHERE THE MATERIAL FACTS PERTAINING TO A PAYMENT MADE ARE SHOWN TO BE OTHERWISE THAN THOSE ON THE BASIS OF WHICH THE DECISION WAS RENDERED, THE DECISION IS NOT CONTROLLING IN THE AUDIT OF THE PAYMENT SO MADE. THUS, IN 22 COMP. DEC. 421, QUOTING FROM THE SYLLABUS, IT WAS HELD:

AN ADVANCE DECISION BY THE COMPTROLLER OF THE TREASURY DETERMINES ONLY QUESTIONS OF LAW, NOT OF FACT, THE CONCLUSION OF LAW BEING PREDICATED, FOR THE PURPOSES OF THE DECISION, UPON AN ASSUMED STATE OF FACTS.

THE EFFECT OF ADVANCE DECISIONS, INSOFAR AS QUESTIONS OF FACT ARE CONCERNED, WAS STATED THEREIN MORE SPECIFICALLY AS FOLLOWS:

THE DECISION CITED WAS NECESSARILY BASED UPON THE STATEMENT OF FACTS SUBMITTED.

THIS OFFICE HAS REPEATEDLY STATED THAT ADVANCE DECISIONS WHICH IT RENDERS MUST OF NECESSITY BE BASED UPON AND LIMITED TO THE PARTICULAR STATEMENT OF FACTS SUBMITTED. PRINCIPLES OF LAW THUS DECIDED AND ANNOUNCED MAY BE OF GENERAL APPLICATION, BUT QUESTIONS OF FACT REFERRED TO IN SUCH DECISIONS ARE NOT DECIDED; BUT FOR THE PURPOSES OF THE PARTICULAR CASE IN HAND THE STATEMENT OF FACT SUBMITTED IS AND MUST BE ACCEPTED. THE DECISION RENDERED CANNOT PROPERLY BE EXTENDED AND APPLIED TO ANY OTHER CASE OR TO THE SAME CASE WHEN THERE IS PRESENTED A STATE OF FACTS DIFFERENT FROM THE STATEMENT ON WHICH THE DECISION IS RENDERED.

IT WILL BE APPRECIATED, THEREFORE, THAT AN AUDIT OF THE PAID ACCOUNTS WILL BE NECESSARY AND THAT WHERE THE MATERIAL FACTS INVOLVED ARE FOUND TO BE OTHERWISE THAN THOSE ON THE ASSUMPTION OF WHICH THE DECISION WAS RENDERED AND SUCH AS TO MAKE INAPPLICABLE THE PRINCIPLES OF LAW THEREIN APPLIED, SUCH SUSPENSION OR DISALLOWANCE AS MAY BE NECESSARY ON THE BASIS OF THE ACTUAL FACTS OF RECORD WILL NOT BE PRECLUDED BY THE OPERATION OF THE ADVANCE DECISION.

CONSIDERING NOW YOUR QUESTION WHETHER "THE ADMINISTRATIVE DETERMINATION OF DULY AUTHORIZED OFFICERS OF THE WAR DEPARTMENT, TO WHOM AUTHORITY IS DELEGATED, WILL BE BINDING AND THAT THE FREIGHT CHARGES ASSESSED AND PAID PURSUANT THERETO, WILL NOT BE SUBJECT TO SUSPENSION OR DISALLOWANCE" IT IS TO BE NOTED THAT THE DECISION OF MAY 4, 1942, WAS BASED UPON THE ASSUMPTION THAT THE TRANSPORTATION SERVICES AVAILABLE OTHERWISE THAN AS PROCURABLE THROUGH FORWARDERS WOULD NOT AFFORD THE EXPEDITION OF MOVEMENT REQUISITE FOR THE GOVERNMENT'S PURPOSES AND THAT THE ENTIRE SERVICES TO BE PROCURED FROM THE FORWARDERS WERE NOT AVAILABLE AT LAWFULLY FILED TARIFF RATES. IN VIEW OF THE SITUATION SO UNDERSTOOD AS OBTAINING YOU WERE INFORMED---

* * * THAT WHERE IT IS ADMINISTRATIVELY DETERMINED THAT THE NEEDS OF THE GOVERNMENT SERVICE REQUIRE A HANDLING BY FORWARDERS, IN CONNECTION WITH TRANSPORTATION, THAT IS NOT AVAILABLE AT THE PUBLISHED TARIFF RATES OF THE RAILROADS BUT IS PROCURABLE FROM FORWARDERS, AN AGREEMENT WITH THE FORWARDERS TO FURNISH SUCH TRANSPORTATION SERVICE AT OTHER THAN LAND-GRANT RATES WOULD APPEAR TO BE AUTHORIZED; AND WHERE THE RECORD IN CONNECTION WITH DISBURSEMENTS SHOWS THAT PAYMENTS FOR SUCH SPECIAL SERVICES ARE MADE PURSUANT TO AND IN ACCORDANCE WITH A CONTRACT FOR THE APPLICATION OF AGREED RATES, THIS OFFICE WILL NOT BE REQUIRED TO WITHHOLD CREDIT FOR SUCH PAYMENTS MERELY BECAUSE SUCH AGREED RATES WERE IN EXCESS OF NET LAND-GRANT RATES APPLICABLE FOR SERVICE OVER LAND-GRANT RAILROADS.

THIS CONCLUSION RECOGNIZED THAT THE QUESTION WHETHER THE NEEDS OF THE GOVERNMENT WOULD REQUIRE THE PROCUREMENT OF A GIVEN SERVICE IS ONE FOR DETERMINATION ADMINISTRATIVELY AND IT IS THE PURPOSE OF THIS OFFICE TO GIVE EFFECT WITHOUT QUESTION TO SUCH DETERMINATION. HOWEVER, THE QUESTION WHETHER A SERVICE SO PROCURED WAS AVAILABLE AT LAWFULLY FILED AND PUBLISHED TARIFF RATES OPEN TO THE PUBLIC IS A QUESTION OF LAW AND, OF COURSE, AN ERRONEOUS ADMINISTRATIVE DETERMINATION IN THIS RESPECT WOULD NOT BE CONTROLLING UPON THE ACCOUNTING OFFICERS. IN THIS CONNECTION IT MAY BE POINTED OUT THAT THE DECISION EXPRESSLY ASSUMED THAT OPPORTUNITIES FOR THE FURNISHING OF SPECIAL SERVICES ON THE PART OF FORWARDERS PROBABLY WOULD OCCUR EITHER IN CONNECTION WITH THE ASSEMBLING OF SEPARATE LOTS AT ORIGIN, OR IN THEIR DISTRIBUTION AT DESTINATION, OR IN THE EXPEDITION OF MOVEMENT NOT AVAILABLE OTHERWISE THAN IN FORWARDER SERVICE. THERE HAS NOW COME TO ATTENTION, HOWEVER, THE FACT THAT BY VIRTUE OF PUBLIC LAW 558, APPROVED MAY 16, 1942, 56 STAT. 284, BEING ENTITLED " AN ACT TO AMEND THE INTERSTATE COMMERCE ACT, AS AMENDED, TO PROVIDE FOR THE REGULATION OF FREIGHT FORWARDERS," IT IS PROVIDED IN SECTION 404 (A), THAT " IT SHALL BE THE DUTY OF EVERY FREIGHT FORWARDER TO PROVIDE AND FURNISH, UPON REASONABLE REQUEST THEREFOR, THE SERVICE SUBJECT TO THIS PART COVERED BY ITS PERMIT ISSUED UNDER THIS PART," AND THE REQUIREMENT IS MADE, AS PROVIDED IN SECTION 405 (A), THAT "EVERY FREIGHT FORWARDER SHALL FILE WITH THE COMMISSION AND PRINT, AND KEEP OPEN TO PUBLIC INSPECTION, TARIFFS SHOWING ITS RATES AND CHARGES FOR SERVICE SUBJECT TO THIS PART, AND ALL CLASSIFICATIONS, RULES, REGULATIONS, AND PRACTICES WITH RESPECT THERETO.' WHEN, THEREFORE, THE REQUIREMENTS OF THESE PROVISIONS SHALL HAVE BEEN COMPLIED WITH THE SITUATION THEN EXISTING WILL BE MATERIALLY CHANGED FROM THAT WHICH OBTAINED WHEN THIS MATTER RECEIVED CONSIDERATION IN THE DECISION OF MAY 4, 1942, AND THE AUDIT OF ACCOUNTS INVOLVING PAYMENTS AS FOR SERVICES DENOMINATED ,SPECIAL" NECESSARILY WILL BE MADE IN THE LIGHT OF SERVICES AVAILABLE AT THE LAWFULLY FILED AND PUBLISHED RATES OF THE FORWARDERS INVOLVED, EFFECTIVE AS OF THE TIME OF SAID SERVICES.

PARAGRAPH 7 (D) OF THE PROPOSED AGREEMENT REFERRED TO IN YOUR SECOND QUESTION IS AS FOLLOWS:

7. FORWARDER FURTHER OFFERS:

(D) THAT THE MAXIMUM RATES CHARGED SHALL BE THE LOWEST STANDARD LESS CARLOAD/ALL-RAIL RATES OR CHARGES AND THAT THE TOTAL CHARGE FOR A MILITARY SHIPMENT WILL NOT BE GREATER THAN THE CHARGE FOR A MINIMUM CARLOAD OF THE SAME FREIGHT AT THE STANDARD CARLOAD ALL-RAIL RATE BETWEEN THE SAME ORIGIN AND DESTINATION, NOTWITHSTANDING THE EXISTENCE OF LOWER RAIL-WATER OR ALL- WATER RATES.

ON THE ASSUMPTION THAT THE SERVICE RENDERED IS NOT AVAILABLE TO THE PUBLIC AT LARGE ON THE BASIS OF LOWER LAWFULLY FILED AND PUBLISHED TARIFF RATES OR CHARGES, NO OBJECTION IS NOTED TO THE LIMITATION SO IMPOSED. THIS CONNECTION, ATTENTION IS INVITED TO MO. PAC. R.R. CO. V. UNITED STATES, 71 CT.CLS. 650, 661, IN WHICH IT WAS SAID "GOVERNMENT OFFICERS ARE WITHOUT AUTHORITY TO CONTRACT FOR RATES HIGHER THAN THOSE TENDERED TO THE PUBLIC IN DULY PUBLISHED AND AUTHORIZED TARIFFS.'

RELATIVE TO YOUR THIRD QUESTION, IF, AS APPARENTLY MUST BE ASSUMED, THE SERVICE RENDERED AS SPECIAL UNDER THE CONTRACT IS NOT AVAILABLE AT RATES PUBLISHED "IN THE TARIFFS OF CARRIERS NOW SUBJECT TO FEDERAL REGULATION," THAT IS, CARRIERS OTHER THAN FREIGHT FORWARDERS, THEN THE CLASSIFICATIONS AND RATINGS PRESCRIBED FOR USE IN CONNECTION WITH SAID RATES WOULD NOT BE CONTROLLING UPON THE CHARGES OF THE FORWARDERS. IN THIS CONNECTION, IT IS NOTED THAT PARAGRAPH 6 OF THE PROPOSED AGREEMENT PROVIDES FOR ATTACHMENT TO THE AGREEMENT OF A "COMPLETE FILE OF ALL FORWARDER'S TARIFFS INCLUDING NAME AND ADDRESS OF PUBLISHING AGENT, IF ANY" AND PARAGRAPH 7 (B) OF THE PROPOSED AGREEMENT STIPULATES THAT THE FORWARDER OFFERS "TO ASSESS CHARGES ON MILITARY SHIPMENTS NOT TO EXCEED THOSE MADE TO ANY OTHER SHIPPER OR RECEIVER FOR AN IDENTICAL SHIPMENT BETWEEN THE SAME POINTS.' IT IS ASSUMED THE PURPOSE OF THIS PROVISION IS TO PROTECT THE GOVERNMENT AGAINST THE PAYMENT OF MORE THAN REQUIRED BY THE FORWARDER TO BE PAID BY THE PUBLIC AT LARGE FOR LIKE TRANSPORTATION.

ACCORDINGLY, SUBJECT TO THE LIMITATIONS NOTED ABOVE THAT THE SERVICE PROCURED IS NOT AVAILABLE AT LAWFULLY FILED AND PUBLISHED TARIFF RATES AND THAT THE QUESTION OF WHETHER THE SERVICES PROCURED WERE SO AVAILABLE IS ONE OF LAW AS TO WHICH AN ADMINISTRATIVE DETERMINATION IS NOT NECESSARILY CONTROLLING UPON THE ACCOUNTING OFFICERS, I FIND NO OBJECTION TO THE MATTERS PRESENTED IN YOUR QUESTIONS.