A-29601, DECEMBER 17, 1929, 9 COMP. GEN. 250
Highlights
THE CONTRACTOR IS CHARGEABLE WITH THE DIFFERENCE BETWEEN THE COMMERCIAL RATES FROM THE TWO POINTS OF DELIVERY TO THE GOVERNMENT DESTINATIONS AND NOT WITH THE DIFFERENCE BETWEEN THE LAND-GRANT RATES. RELATIVE TO THE PROPER BALANCE THAT IS TO BE COLLECTED FROM THE THREE FORKS PORTLAND CEMENT CO. BECAUSE THE SHIPMENT WAS MADE FROM TRIDENT INSTEAD OF HANOVER. THERE WAS DEDUCTED THE NET DIFFERENCE RESULTING FROM SUBTRACTION OF THE LAND-GRANT RATE FROM HANOVER TO AUGUSTA FROM THE LAND-GRANT RATE FROM TRIDENT TO AUGUSTA. THERE WAS CONSIDERED A SIMILAR SITUATION IN DECISION DATED DECEMBER 5. IT WAS HELD: * * * THE DAMAGES TO THE GOVERNMENT ARE NOT THE DIFFERENCE BETWEEN THE NET RATE AFTER DEDUCTION OF LAND GRANT FROM THE COMMERCIAL RATE BUT THE DIFFERENCE BETWEEN THE COMMERCIAL RATE VIA THE ALL-RAIL ROUTE AND THE COMMERCIAL RATE VIA THE INTERCOASTAL ROUTE.
A-29601, DECEMBER 17, 1929, 9 COMP. GEN. 250
CONTRACTS - INCREASED COSTS - TRANSPORTATION CHARGES WHERE A CONTRACT REQUIRES DELIVERY F.O.B. A CERTAIN POINT FOR SHIPMENT TO GOVERNMENT DESTINATIONS AND THE CONTRACTOR MAKES DELIVERY F.O.B. SOME OTHER POINT, THE CONTRACTOR IS CHARGEABLE WITH THE DIFFERENCE BETWEEN THE COMMERCIAL RATES FROM THE TWO POINTS OF DELIVERY TO THE GOVERNMENT DESTINATIONS AND NOT WITH THE DIFFERENCE BETWEEN THE LAND-GRANT RATES, IF ANY, OVER THE ROUTES. (MODIFIED BY 9 COMP. GEN. 368.)
COMPTROLLER GENERAL MCCARL TO THE SECRETARY OF THE INTERIOR, DECEMBER 17, 1929:
THERE HAS BEEN RECEIVED IN REFERENCE TO SETTLEMENT NO. K-49013-I, DATED AUGUST 16, 1929, OF THE ACCOUNTS OF HARRY CADEN, SPECIAL FISCAL AGENT, UNITED STATES RECLAMATION SERVICE, YOUR LETTER OF OCTOBER 30, 1929, RELATIVE TO THE PROPER BALANCE THAT IS TO BE COLLECTED FROM THE THREE FORKS PORTLAND CEMENT CO. ON ACCOUNT OF EXCESS FREIGHT CHARGES PAID BY THE GOVERNMENT FOR CEMENT DELIVERED UNDER ITS PROPOSAL OF DECEMBER 15, 1927, AND ACCEPTANCE THEREOF OF JANUARY 19, 1928 (CONTRACT NO. I-2R-1208), ON A QUANTITY OF CEMENT SHIPPED FROM TRIDENT, MONT., TO AUGUSTA, MONT., WHEN THE CONTRACT REQUIRED DELIVERY F.O.B. HANOVER, MONT., FOR SHIPMENT TO AUGUSTA, MONT., ON GOVERNMENT BILL OF LADING.
IT APPEARS THAT UNDER THE TERMS OF THE CONTRACT THE CONTRACTOR AGREED TO FURNISH THE RECLAMATION SERVICE OF THE INTERIOR DEPARTMENT, F.O.B. HONOVER, MONT., FOR SHIPMENT TO AUGUSTA, MONT., 100,000 BARRELS OF CEMENT WHICH MIGHT BE ORDERED DURING THE PERIOD FROM THE DATE OF THE CONTRACT TO AND INCLUDING DECEMBER 31, 1928. IT APPEARS THAT PRIOR TO AUGUST 13, 1928, THE CONTRACTOR DELIVERED AT TRIDENT, MONT., FOR SHIPMENT TO AUGUSTA, MONT., 2,622,000 POUNDS OF CEMENT AND THAT AFTER AUGUST 13, 1928, IT DELIVERED AT TRIDENT FOR SHIPMENT TO AUGUSTA 3,146,000 POUNDS OF CEMENT.
IT APPEARS THAT IN MAKING DEDUCTIONS FROM THE CONTRACT PRICE OF THE EXCESS FREIGHT CHARGES PAID BY THE GOVERNMENT, BECAUSE THE SHIPMENT WAS MADE FROM TRIDENT INSTEAD OF HANOVER, THERE WAS DEDUCTED THE NET DIFFERENCE RESULTING FROM SUBTRACTION OF THE LAND-GRANT RATE FROM HANOVER TO AUGUSTA FROM THE LAND-GRANT RATE FROM TRIDENT TO AUGUSTA. THERE WAS CONSIDERED A SIMILAR SITUATION IN DECISION DATED DECEMBER 5, 1929, A- 29421, OF THIS OFFICE, IN WHICH, AFTER CITING LOUISVILLE AND HASHVILLE RAILROAD V. UNITED STATES, 267 U.S. 395, PAGE 402, IT WAS HELD:
* * * THE DAMAGES TO THE GOVERNMENT ARE NOT THE DIFFERENCE BETWEEN THE NET RATE AFTER DEDUCTION OF LAND GRANT FROM THE COMMERCIAL RATE BUT THE DIFFERENCE BETWEEN THE COMMERCIAL RATE VIA THE ALL-RAIL ROUTE AND THE COMMERCIAL RATE VIA THE INTERCOASTAL ROUTE. AS STATED, THIS DIFFERENCE IS $120.64, WHICH SHOULD HAVE BEEN DEDUCTED IN THE SETTLEMENT UNDER REVIEW.
THE COMMERCIAL RATE FROM HANOVER TO AUGUSTA PRIOR TO AUGUST 13, 1928, WAS 20.5 CENTS PER HUNDREDWEIGHT, AS STATED IN TARIFF G.N.-1190 E, AND THE COMMERCIAL RATE FROM TRIDENT TO AUGUSTA DURING THE SAME PERIOD WAS 33 CENTS PER HUNDREDWEIGHT, AS STATED IN TARIFF NO. PAC. 717-I AND G.N.-950- E, OR A DIFFERENCE OF 12.5 CENTS PER HUNDREDWEIGHT. THERE WAS NO CHANGE AFTER AUGUST 13 IN THE RATE FROM HANOVER TO AUGUSTA, BUT THE COMMERCIAL RATE FROM TRIDENT WAS FIXED AT 29 CENTS PER HUNDREDWEIGHT IN TARIFF NO. PAC.-3303-B, SUPPLEMENT 1, OR A DIFFERENCE OF 8.5 CENTS PER HUNDREDWEIGHT.
SINCE THERE WERE SHIPMENTS AGGREGATING 2,622,000 POUNDS PRIOR TO AUGUST 13 FROM TRIDENT TO AUGUSTA, AND 3,146,400 POUNDS AFTER AUGUST 13 FROM TRIDENT TO AUGUSTA, THE COMMERCIAL CHARGE THEREON WAS $5,951.94 IN EXCESS OF THE COMMERCIAL CHARGE WHICH WOULD HAVE ACCRUED HAD THE CONTRACTOR DELIVERED THE CEMENT AT HANOVER FOR SHIPMENT AT GOVERNMENT EXPENSE TO AUGUSTA. THERE HAS BEEN COLLECTED FROM THE CONTRACTOR ON VOUCHERS HERETOFORE PAID BY HARRY CADEN THE SUM OF $2,566.92 AS EXCESS FREIGHT CHARGES ON THESE SHIPMENTS; HENCE THERE REMAINS DUE THE GOVERNMENT THE DIFFERENCE BETWEEN $5,951.94, WHICH SHOULD HAVE BEEN COLLECTED, AND SAID AMOUNT OF $2,566.92 COLLECTED, OR $3,385.02.
YOU ARE ADVISED, THEREFORE, THAT THE SUM REMAINING TO BE COLLECTED FROM THE CONTRACTOR AS EXCESS FREIGHT CHARGES TO THE GOVERNMENT IS $3,385.02, AND THE DISALLOWANCES IN THE ACCOUNTS OF HARRY CADEN WILL BE STATED ACCORDINGLY.