B-162739, OCT. 1, 1968

B-162739, OCT. 1, 1968

TO CHICAGO TRANSPARENT, INC.:

REFERENCE IS MADE TO YOUR LETTER OF JULY 29, 1968, IN WHICH YOU HAVE ALLEGED A CLAIM AGAINST THE GENERAL SERVICES ADMINISTRATION (GSA) FOR IMPROPERLY DEDUCTING $315.00 UNDER PURCHASE ORDER NO. S-030870-TQ, ISSUED BY GSA PURSUANT TO CONTRACT NO. GS-07S-12082. ARTICLE 2 OF GSA FORM 1424, WHICH WAS MADE PART OF YOUR CONTRACT, AUTHORIZED THE GOVERNMENT TO DIVERT SHIPMENTS TO DESTINATIONS OTHER THAN THOSE NAMED IN THE CONTRACT, AND PROVIDED PROCEDURES TO BE FOLLOWED FOR ADJUSTING THE CONTRACT PRICE TO ACCOUNT FOR DIFFERENCES IN TRANSPORTATION COSTS BECAUSE OF SUCH DIVERSIONS AS FOLLOWS: "2. CHANGES

DELIVERY OPTIONS AND ADJUSTMENTS IN TRANSPORTATION COSTS

(APPLICABLE EXCEPT AS TO FEDERAL SUPPLY SCHEDULE CONTRACTS.) WITHIN THE SCOPE OF ARTICLE 2 OF THE GENERAL PROVISIONS (SUPPLY CONTRACT), STANDARD FORM 32, THE RIGHT IS RESERVED BY THE GOVERNMENT AT ITS OPTION TO:

(A) DIRECT DELIVERIES TO DESTINATIONS OR TO CONSIGNEES OTHER THAN THOSE ORIGINALLY NAMED IN THE CONTRACT FOR ANY PART OR ALL OF THE QUANTITIES ORIGINALLY STIPULATED IN THE CONTRACT;

(B) DIRECT SHIPMENTS IN QUANTITIES WHICH WILL REQUIRE A DIFFERENTIAL IN RATES FROM THOSE ON WHICH THE CONTRACT PRICES ARE BASED; AND

(C) DIRECT THE CONTRACTOR TO SHIP BY A MODE OF TRANSPORTATION OTHER THAN STIPULATED IN THE CONTRACT.

"THE RIGHTS RESERVED ABOVE MAY BE EXERCISED WITH RESPECT TO INDIVIDUAL ORDERS BY ANY OFFICE AUTHORIZED TO PLACE ORDERS UNDER THE CONTRACT. SHIPMENTS SHALL BE MADE AT THE LOWEST POSSIBLE COST COMMENSURATE WITH THE TYPE OF SERVICE REQUIRED. IN SUCH CASES, THE CONTRACTOR SHALL DEDUCT FROM HIS INVOICE THE TRANSPORTATION CHARGES WHICH WOULD HAVE APPLIED UNDER THE ORIGINAL CONTRACT, AND SHALL ADD THE TRANSPORTATION CHARGES FOR DELIVERIES ACTUALLY MADE. TRANSPORTATION CHARGES WILL, IN ALL CASES, BE BASED UPON THE LOWEST REGULARLY ESTABLISHED RATES ON FILE WITH THE INTERSTATE COMMERCE COMMISSION, THE U.S. MARITIME COMMISSION, ANY STATE REGULATORY BODY, OR LEGAL CONTRACT CARRIER RATES PROVIDED A CERTIFIED COPY OF SUCH LEGAL CONTRACT CARRIER RATES IS ON FILE WITH THIS ADMINISTRATION OR ACCOMPANIES THE CONTRACTOR'S INVOICE FOR PAYMENT. IN THESE CASES CONTRACTORS SHALL INVOICE FOR REIMBURSEMENT OF THE TRANSPORTATION CHARGES AS A SEPARATE ITEM WHICH SHALL BE SUPPORTED BY PAID FREIGHT BILLS OR EXPRESS RECEIPTS WHEN THE AMOUNT THEREOF IS IN EXCESS OF $25.'

THE SUBJECT PURCHASE ORDER CALLED FOR THE DIVERSION OF THE REQUIRED ITEMS, THE SHIPPING WEIGHT OF WHICH WAS 9,950 POUNDS, FROM SAN FRANCISCO TO HICKAM AIR FORCE BASE, HAWAII. YOUR INVOICE COVERING THIS ORDER DEDUCTED $227.86, ALLEGEDLY REPRESENTING THE TRANSPORTATION CHARGES WHICH WOULD HAVE APPLIED FOR SHIPMENT TO THE ORIGINAL DESTINATION OF SAN FRANCISCO, AND ADDED $801.95 TO COVER TRANSPORTATION COSTS TO HICKAM.

WE ARE ADVISED THAT THE LOWEST REGULARLY ESTABLISHED RATE FOR SHIPMENT OF THIS MATERIAL TO SAN FRANCISCO WAS $5.19 PER CWT. FOR TRUCK SHIPMENT, OR A TOTAL COST OF $516.41 FOR THE 9,950 POUNDS. THE $227.86 CREDITED ON YOUR INVOICE FOR SHIPPING COSTS TO SAN FRANCISCO WAS BASED ON THE RATE WHICH WOULD HAVE BEEN APPLICABLE IF THE SHIPMENT HAD BEEN MADE AT THE CARLOAD RATE BY RAIL. GSA HAS INFORMED US, HOWEVER, THAT THE QUANTITY SHIPPED HERE COULD NOT, UNDER REGULARLY ESTABLISHED TARIFFS, QUALIFY FOR THE CARLOAD RATE AND THEREFORE USE OF THAT RATE WOULD NOT HAVE BEEN APPROPRIATE IN DETERMINING TRANSPORTATION COSTS UNDER ARTICLE 2 OF YOUR CONTRACT. WE CONCUR IN THIS JUDGMENT. WHEN YOUR INVOICE WAS PAID THERE WAS DEDUCTED AN ADDITIONAL FREIGHT ALLOWANCE OF $288.55 ($516.41 MINUS $227.86), AND A PROMPT PAYMENT DISCOUNT OF $26.45, MAKING THE TOTAL OF $315 WHICH YOU CLAIM.

BASED UPON THE FOREGOING THE SUBJECT DEDUCTIONS APPEAR TO HAVE BEEN CORRECT AND THEREFORE YOUR CLAIM MUST BE DENIED.