A-16561, JANUARY 7, 1927, 6 COMP. GEN. 454

A-16561: Jan 7, 1927

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TRANSPORTATION - BILLS OF LADING WHERE MATERIALS ARE PURCHASED BY THE GOVERNMENT AT A PRICE FIXED F.O.B. THE GOVERNMENT IS ONLY LIABLE FOR REIMBURSEMENT TO THE CONTRACTOR OF THE AMOUNT IT WOULD HAVE COST HAD THE SHIPMENT MOVED UNDER A GOVERNMENT BILL OF LADING. BIDS WERE REQUESTED ON CERTAIN MATERIALS FOR USE AT THE NAVY YARD. UNDER THE DELIVERY CONDITIONS PRINTED ON THE BACK OF THE ADVERTISEMENT IT WAS PROVIDED THAT: IF THE CONTRACT COVERS DELIVERY F.O.B. AS THE SHIPMENT WILL BE MADE BY THE INSPECTOR ON A GOVERNMENT BILL OF LADING AFTER INSPECTION. THE MATERIAL WAS SHIPPED BY THE CONTRACTOR ON A COMMERCIAL BILL OF LADING AFTER INSPECTION BY A GOVERNMENT OFFICER AT A COST OF $11.33. SETTLEMENT OF THE CLAIM WAS MADE IN THE AMOUNT OF $7.49.

A-16561, JANUARY 7, 1927, 6 COMP. GEN. 454

TRANSPORTATION - BILLS OF LADING WHERE MATERIALS ARE PURCHASED BY THE GOVERNMENT AT A PRICE FIXED F.O.B. AT POINT OF ORIGIN TO BE FORWARDED AT THE EXPENSE OF THE UNITED STATES UNDER GOVERNMENT BILL OF LADING AND THE CONTRACTOR SHIPS THE MATERIAL ON A COMMERCIAL BILL OF LADING, PREPAYING THE FREIGHT CHARGES, THE GOVERNMENT IS ONLY LIABLE FOR REIMBURSEMENT TO THE CONTRACTOR OF THE AMOUNT IT WOULD HAVE COST HAD THE SHIPMENT MOVED UNDER A GOVERNMENT BILL OF LADING.

DECISION BY COMPTROLLER GENERAL MCCARL, JANUARY 7, 1927:

J. H. JOLLEY AND CO. REQUESTED NOVEMBER 17, 1926, REVIEW OF SETTLEMENT 0135875 DISALLOWING ITS CLAIM FOR $11.33 AS REIMBURSEMENT OF FREIGHT CHARGES PAID BY IT ON MATERIAL FURNISHED UNDER NAVAL SUPPLY ACCOUNT REQUISITION NO. 722, DATED MAY 8, 1925.

BY CIRCULAR ADVERTISEMENT DATED JUNE 10, 1925, BIDS WERE REQUESTED ON CERTAIN MATERIALS FOR USE AT THE NAVY YARD, PUGET SOUND, WASH. THE PROPOSAL REQUESTED ALTERNATE BIDS, AS FOLLOWS:

BID A: TO BE DELIVERED ALL TRANSPORTATION CHARGES PAID TO THE SUPPLY OFFICER, NAVY YARD, PUGET SOUND, WASHINGTON.

BID B: TO BE DELIVERED F.O.B. CARS OR ON WHARF AT OR NEAR CONTRACTOR'S WORKS, SHIPMENT TO BE MADE ON GOVERNMENT BILL OF LADING.

UNDER THE DELIVERY CONDITIONS PRINTED ON THE BACK OF THE ADVERTISEMENT IT WAS PROVIDED THAT:

IF THE CONTRACT COVERS DELIVERY F.O.B. WORKS, THE MATERIAL MUST NOT BE SHIPPED BY THE CONTRACTOR, AS THE SHIPMENT WILL BE MADE BY THE INSPECTOR ON A GOVERNMENT BILL OF LADING AFTER INSPECTION.

THE MATERIAL WAS SHIPPED BY THE CONTRACTOR ON A COMMERCIAL BILL OF LADING AFTER INSPECTION BY A GOVERNMENT OFFICER AT A COST OF $11.33. SETTLEMENT OF THE CLAIM WAS MADE IN THE AMOUNT OF $7.49, BEING THE AMOUNT IT WOULD HAVE COST THE GOVERNMENT HAD THE MATERIAL BEEN SHIPPED ON A GOVERNMENT BILL OF LADING AS SPECIFIED BY THE TERMS OF THE CONTRACT.

IN EXPLANATION OF THE SHIPMENT ON THE COMMERCIAL BILL OF LADING THE CLAIMANT STATES:

* * * WE WERE NEVER SUPPLIED WITH ANY GOVERNMENT B/L FROM ANY SOURCE AND WHEN THE INSPECTOR CALLED ON SATURDAY MORNING, AUGUST 15, AND PLACED HIS OFFICIAL STAMP ON THE BOX CONTAINING THE MATERIAL ORDERED EXAMINED AND PASSED, HE FORMERLY (FORMALLY) RELEASED THE SHIPMENT AND INSTRUCTED US TO MAKE THE SHIPMENT, WHICH WE DID ON REGULAR RAILROAD B/L BECAUSE, AS STATED, WE WERE NOT SUPPLIED WITH ANY GOVERNMENT B/L.

THE WELL-ESTABLISHED RULE IS THAT WHERE GOODS ARE PURCHASED AT A PRICE FIXED F.O.B. THE POINT OF ORIGIN TO BE FORWARDED AT THE EXPENSE OF THE UNITED STATES UNDER GOVERNMENT BILL OF LADING AND THE VENDOR MAKES THE SHIPMENT UNDER A COMMERCIAL BILL OF LADING, PREPAYING THE FREIGHT, THE GOVERNMENT IS LIABLE FOR REIMBURSEMENT TO THE VENDOR ONLY OF THE AMOUNT IT WOULD HAVE COST HAD THE SHIPMENT MOVED UNDER A GOVERNMENT BILL OF LADING. IT IS CLEAR THAT THE DIRECTIONS ALLEGED TO HAVE BEEN GIVEN BY THE OFFICER IN CHARGE OF THE INSPECTION OF THE MATERIAL HAVE NO LEGAL EFFECT IN IMPOSING UPON THE GOVERNMENT THE OBLIGATION TO PAY FREIGHT CHARGES IN EXCESS OF WHAT IT WOULD HAVE COST HAD THE MATERIALS BEEN SHIPPED IN ACCORDANCE WITH THE CONTRACT TERMS. IT WAS THE PLAIN DUTY OF THE CONTRACTOR, UPON THE ACCEPTANCE OF ITS BIDF.O.B. CONTRACTOR'S WORKS, TO APPLY FOR AND OBTAIN A GOVERNMENT BILL OF LADING ON WHICH TO MAKE THE SHIPMENT.