A-25280, MARCH 27, 1929, 8 COMP. GEN. 500

A-25280: Mar 27, 1929

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ON SUCH SHIPMENTS THE UNITED STATES IS OBLIGATED TO PAY THE TRANSPORTATION CHARGES AND THE CONTRACTOR TO DEDUCT FROM HIS BILL AN AMOUNT EQUIVALENT TO FREIGHT CHARGES ON A LIKE SHIPMENT FROM HIS SHIPPING POINT TO WASHINGTON. WHERE THE CONTRACTOR ALLEGES THAT THE ACTUAL SHIPPING POINT IS NOT THE SHIPPING POINT ON WHICH HIS WASHINGTON. PRICE WAS BASED. OR THAT HE HAS PAID TRANSPORTATION CHARGES ON A FIELD SHIPMENT WHICH THE UNITED STATES WAS OBLIGATED TO PAY. IF IT BE CLEARLY ESTABLISHED THAT THE CONTRACTOR PAID TRANSPORTATION EXPENSES WHICH THE GOVERNMENT WAS OBLIGATED TO PAY ON A PARTICULAR SHIPMENT CREDIT SHOULD BE ALLOWED THEREFOR NOT TO EXCEED THE SAVING TO THE UNITED STATES. FREIGHT CHARGES AND OTHER TRANSPORTATION EXPENSES WHICH THE CONTRACTOR MAY ALLEGE TO HAVE BEEN ABSORBED BY SHIPMENT FROM FACTORY TO WAREHOUSE.

A-25280, MARCH 27, 1929, 8 COMP. GEN. 500

GENERAL SUPPLY COMMITTEE CONTRACTS - ADJUSTMENT OF TRANSPORTATION CHARGES UNDER THE PROVISIONS OF PARAGRAPH 12 OF FORM A AS SET FORTH IN THE GENERAL SCHEDULE OF SUPPLIES FOR 1928 AND INCORPORATED BY REFERENCE IN CONTRACTS FOR SUPPLIES LISTED THEREIN, TRANSPORTATION CHARGES SAVED BY DELIVERY OF SHIPMENTS OF 100 POUNDS OR MORE TO POINTS OTHER THAN WASHINGTON, D.C., ACCRUE TO THE UNITED STATES. ON SUCH SHIPMENTS THE UNITED STATES IS OBLIGATED TO PAY THE TRANSPORTATION CHARGES AND THE CONTRACTOR TO DEDUCT FROM HIS BILL AN AMOUNT EQUIVALENT TO FREIGHT CHARGES ON A LIKE SHIPMENT FROM HIS SHIPPING POINT TO WASHINGTON, D.C. WHERE THE CONTRACTOR ALLEGES THAT THE ACTUAL SHIPPING POINT IS NOT THE SHIPPING POINT ON WHICH HIS WASHINGTON, D.C., PRICE WAS BASED, OR THAT HE HAS PAID TRANSPORTATION CHARGES ON A FIELD SHIPMENT WHICH THE UNITED STATES WAS OBLIGATED TO PAY, AND REFUSES TO ACCEPT PAYMENT ON THE USUAL BASIS, DISBURSING OFFICERS SHOULD NOT ATTEMPT TO ADJUST THE MATTER, BUT SHOULD SUBMIT THE VOUCHER TO THE GENERAL ACCOUNTING OFFICE FOR PREAUDIT OR DIRECT SETTLEMENT AS A CLAIM. IF IT BE CLEARLY ESTABLISHED THAT THE CONTRACTOR PAID TRANSPORTATION EXPENSES WHICH THE GOVERNMENT WAS OBLIGATED TO PAY ON A PARTICULAR SHIPMENT CREDIT SHOULD BE ALLOWED THEREFOR NOT TO EXCEED THE SAVING TO THE UNITED STATES, BUT FREIGHT CHARGES AND OTHER TRANSPORTATION EXPENSES WHICH THE CONTRACTOR MAY ALLEGE TO HAVE BEEN ABSORBED BY SHIPMENT FROM FACTORY TO WAREHOUSE, ETC., PRIOR TO THE PARTICULAR ORDER ARE TOO SPECULATIVE TO SERVE AS A BASIS FOR THE ALLOWANCE OF CREDIT TO THE CONTRACTOR.

DECISION BY COMPTROLLER GENERAL MCCARL, MARCH 27, 1929:

THERE ARE FOR CONSIDERATION VARIOUS QUESTIONS ARISING IN THE SETTLEMENT OF THE COAST GUARD ACCOUNTS OF IRA L. PECK, SPECIAL DISBURSING AGENT, TREASURY DEPARTMENT, WHEREIN CREDIT WAS WITHHELD IN VARIOUS SUMS ON ACCOUNT OF THE NONDEDUCTION OF AMOUNTS EQUAL TO THE LOWEST REGULARLY ESTABLISHED FREIGHT CHARGES FROM POINTS OF SHIPMENT TO WASHINGTON, D.C., ON VOUCHERS COVERING PAYMENTS TO VARIOUS GENERAL SUPPLY CONTRACTORS FOR SUPPLIES DELIVERED TO SOUTH BROOKLYN, N.Y., IN ACCORDANCE WITH THE INDIVIDUAL CONTRACTS AND PARAGRAPH 12 OF FORM A OF THE GENERAL SUPPLY SCHEDULE FOR 1928.

IT APPEARS THAT THE INDIVIDUAL CONTRACTS, EXECUTED ON STANDARD FORM "CONTRACTS FOR SUPPLIES LISTED IN THE GENERAL SCHEDULE OF SUPPLIES," SHOW THE CONTRACTOR'S PLACE OF BUSINESS AND COVER THE FURNISHING OF CERTAIN MATERIALS, SUPPLIES, AND EQUIPMENT DESCRIBED IN THE GENERAL SCHEDULE OF SUPPLIES FOR USE BY THE EXECUTIVE DEPARTMENTS AND OTHER ESTABLISHMENTS OF THE GOVERNMENT OF THE UNITED STATES OF AMERICA IN WASHINGTON, D.C., FOR USE BY THE GOVERNMENT OF THE DISTRICT OF COLUMBIA, AND FOR USE BY SUCH FIELD SERVICES AS ARE INCLUDED IN THE SPECIFICATIONS FOR THE VARIOUS CLASSES OF SUPPLIES, AND FOR DIRECT DELIVERY FROM CONTRACTOR'S SHIPPING POINT ON GOVERNMENT BILL OF LADING IN ACCORDANCE WITH PARAGRAPH 12 OF FORM A, WHICH, AS THUS INCORPORATED BY REFERENCE IN THE CONTRACTS, PROVIDES:

DELIVERIES IN THE DISTRICT OF COLUMBIA MUST BE MADE, AT THE EXPENSE OF THE CONTRACTOR, WITHIN THE DOORS OF THE STOREROOM DESIGNATED IN THE ORDER. UNLESS OTHERWISE PROVIDED IN THE SPECIFICATIONS, ARTICLES SHALL BE DELIVERED IN SUITABLE TRADE PACKAGES, WHICH SHALL REMAIN THE PROPERTY OF THE GOVERNMENT. WHEN IT IS PROVIDED THAT CONTAINERS ARE TO BE RETURNED, IT IS UNDERSTOOD THAT IT SHALL BE AT THE RISK AND EXPENSE OF THE CONTRACTOR. CONTRACTORS ARE OBLIGATED TO HONOR ALL ORDERS FOR THE VARIOUS CLASSES OF SUPPLIES FOR FIELD SERVICES SPECIFICALLY COVERED BY ADVERTISEMENTS AND PROPOSALS FOR CONVEYANCE TO DESTINATIONS ON GOVERNMENT BILLS OF LADING FROM CONTRACTORS'SHIPPING POINTS. ON ANY SUCH SHIPMENT THAT AMOUNTS TO 100 POUNDS OR MORE THE CONTRACTOR SHALL DEDUCT FROM HIS INVOICE THE AMOUNT OF FREIGHT, AT THE LOWEST REGULARLY ESTABLISHED RATE FOR THE SHIPMENT INVOLVED, FROM HIS POINT OF SHIPMENT TO WASHINGTON, D.C., AS PUBLISHED BY OR ON FILE WITH THE INTERSTATE COMMERCE COMMISSION OR THE UNITED STATES SHIPPING BOARD. ON SHIPMENTS WEIGHTING LESS THAN 100 POUNDS THE CONTRACTOR SHALL PAY TRANSPORTATION COSTS TO POINTS WHERE THE CHARGES ARE NOT GREATER THAN TO WASHINGTON, D.C. THE ENTIRE TRANSPORTATION COSTS ON SHIPMENTS OF LESS THAN 100 POUNDS WILL BE ASSUMED BY THE GOVERNMENT TO ALL OTHER DESTINATIONS. ANY DEPARTMENT OR ESTABLISHMENT MAY ORDER SUPPLIES OR FIELD SERVICES NOT MENTIONED IN THE ADVERTISEMENTS AND PROPOSALS UNDER THE ABOVE CONDITIONS, PROVIDED THE CONTRACTOR DOES NOT OBJECT TO FURNISHING THE SUPPLIES COVERED BY SUCH ORDER. THE UNIT INSERTED OPPOSITE EACH ITEM INDICATES THE SMALLEST QUANTITY WHICH A CONTRACTOR WILL BE REQUIRED TO DELIVER UPON A SINGLE ORDER, EXCEPT IN CASES WHERE A MINIMUM ORDER IS STATED. ALL WEIGHTS ARE UNDERSTOOD TO BE NET UNLESS OTHERWISE STATED.

IN CONSIDERING A SIMILAR PROVISION, IT WAS HELD BY THE COMPTROLLER OF THE TREASURY IN DECISION OF NOVEMBER 17, 1920, 27 COMP. DEC. 465, 467, THAT:

THE EVIDENT INTENT AND PURPOSE OF THIS PROVISION OF THE SCHEDULE IS THAT WHEN PRICES ARE QUOTED F.O.B. WASHINGTON, AND PRESUMABLY THE FREIGHT FROM FACTORY OR PLACE OF BUSINESS TO WASHINGTON HAS BEEN ADDED TO THE FACTORY OR F.O.B. PLACE OF BUSINESS PRICE, THAT FREIGHT SHALL BE DEDUCTED FROM THE QUOTED PRICE IF A SHIPMENT IS ACCEPTED AT THE FACTORY OR PLACE OF BUSINESS.

IF A CONTRACTOR HAS ONLY ONE FACTORY OR PLACE OF BUSINESS FROM WHICH ALL SHIPMENTS ARE MADE, THE APPLICATION OF THE PARAGRAPH IS CLEAR, BUT WHERE THERE ARE TWO OR MORE FACTORIES OR PLACES OF BUSINESS FROM WHICH SHIPMENTS MAY BE MADE, ITS CORRECT INTERPRETATION AND APPLICATION IS MORE DIFFICULT.

I THINK THAT THE "SHIPPING POINT" BETWEEN WHICH AND WASHINGTON THE CONTRACTOR IS REQUIRED TO DEDUCT THE ESTABLISHED FREIGHT RATE IS NOT NECESSARILY THE POINT OF ACTUAL SHIPMENT OF ANY GIVEN ORDER BUT THE SHIPPING POINT UPON WHICH THE F.O.B. WASHINGTON PRICE IS BASED. THE DEDUCTION IF ESTABLISHED UPON THIS BASIS, REMAINS CONSTANT, BUT IF BASED UPON THE POINT OF ACTUAL SHIPMENT IT MAY VARY BEYOND ANY REASONABLE PRESUMPTION OF THE INTENT OF THE PARTIES; AS, FOR INSTANCE, IF SHIPMENT IN THE INSTANT CASE HAD BEEN MADE FROM A WAREHOUSE IN SAN FRANCISCO FOR DELIVERY, SAY, AT OAKLAND, AND THE CONTRACTOR'S WASHINGTON PRICE HAD BEEN BASED UPON DELIVERIES FROM THE PHILADELPHIA WAREHOUSE TO WASHINGTON.

DEDUCTION OF FREIGHT UNDER THIS PARAGRAPH SHOULD BE BASED UPON THE LOWEST REGULAR ESTABLISHED RATE FROM THAT SHIPPING POINT OF THE CONTRACTOR WHICH IS THE BASIS FOR HIS F.O.B. WASHINGTON PRICE TO WASHINGTON. WHAT IS THAT SHIPPING POINT IS NECESSARILY A QUESTION OF FACT TO BE DETERMINED IN THE CASES AS THEY ARISE. IF DEDUCTION OF A RATE LESS THAN THAT BETWEEN THE POINT OF ACTUAL SHIPMENT AND WASHINGTON IS CLAIMED BY A CONTRACTOR THE BURDEN OF PROOF IS UPON HIM TO SHOW THAT DEDUCTION TO EQUALIZE THE PRICE WITH WASHINGTON SHOULD BE BASED UPON SOME OTHER SHIPPING POINT.

IN DECISION OF THIS OFFICE DATED MARCH 26, 1928, A-22024, IT WAS HELD THAT WHERE SHIPMENT WAS MADE ON GOVERNMENT BILL OF LADING FROM A POINT WHERE ORDER WAS ACCEPTED AND EXECUTED AS SHIPPING POINT TO A DESTINATION OTHER THAN WASHINGTON, D.C., A DEDUCTION WAS REQUIRED FROM THE INVOICE PRICE OF THE REGULAR TARIFF RATE FOR FREIGHT FROM SHIPPING POINT TO WASHINGTON, D.C. THIS, REGARDLESS OF DESTINATION OR THE FACT AS TO WHERE THE CONTRACTOR MANUFACTURED THE COMMODITY OR THAT STOCK WAS SHIPPED IN CARLOAD LOTS TO STOCK ROOMS AT SHIPPING POINT OR TO WASHINGTON. IT MAY, THEREFORE, BE STATED AS A GENERAL RULE, THAT THE PRICES QUOTED IN THE GENERAL SUPPLY CONTRACTS, EXCEPT AS OTHERWISE PROVIDED, CONTEMPLATE DELIVERY IN WASHINGTON, D.C., AND THAT UNDER THE CONTRACTS, WHERE THE SHIPMENT IS IN EXCESS OF 100 POUNDS, ANY ADVANTAGE RESULTING FROM DELIVERY AT OTHER POINTS IS TO ACCRUE TO THE UNITED STATES.

THE NORMAL SITUATION WHICH THE CONTRACTS CONTEMPLATE, WITH RESPECT TO DELIVERIES TO POINTS OTHER THAN WASHINGTON IS THAT THEY SHALL BE FROM THE CONTRACTOR'S SHIPPING POINT ON WHICH THE WASHINGTON PRICE IS BASED AND THAT SUCH DELIVERIES SHALL BE AT THE EXPENSE OF THE GOVERNMENT, .E., ON GOVERNMENT BILLS OF LADING, THE CONTRACTOR BEING OBLIGATED ONLY TO DELIVER TO THE CARRIERS AND THEREUPON TO DEDUCT FROM HIS CONTRACT (WASHINGTON) PRICE THE SAVING OF FREIGHT CHARGES DUE TO THE FACT THAT THE SHIPMENT GOES FORWARD ON A GOVERNMENT BILL OF LADING, IRRESPECTIVE OF DESTINATION. PRACTICE, AS SHOWN BY THE VARIOUS TRANSACTIONS INVOLVED IN THE PRESENT ACCOUNT, THE CONTROVERSIES WHICH ARISE ARE GENERALLY DUE TO ONE OR BOTH OF TWO DEPARTURES FROM THIS NORMAL SITUATION, NAMELY:

1. THE SUPPLIES ARE SHIPPED FROM A POINT MORE DISTANT FROM WASHINGTON THAN THE ALLEGED SHIPPING POINT ON WHICH THE WASHINGTON PRICE IS BASED, OR FROM WHICH THE SUPPLIES WOULD HAVE BEEN SHIPPED HAD THE ORDER BEEN ONE FOR WASHINGTON DELIVERY. SEE THE EXAMPLE CITED IN 27 COMP. DEC. 465, 467, SUPRA, OF SUPPLIES SHIPPED FROM SAN FRANCISCO TO OAKLAND, WHEREAS, IF THE ORDER HAD BEEN FOR WASHINGTON DELIVERY THE SHIPPING POINT WOULD HAVE BEEN PHILADELPHIA. IT WOULD BE MANIFESTLY UNJUSTIFIED IN SUCH A CASE TO REQUIRE THE DEALER TO DEDUCT ON THE OAKLAND SHIPMENT THE ESTABLISHED FREIGHT CHARGES ON A LIKE SHIPMENT FROM SAN FRANCISCO TO WASHINGTON. IS EASILY CONCEIVABLE THAT SUCH CHARGES MIGHT EXCEED THE CONTRACT PRICE, BASED ON WASHINGTON DELIVERY FROM PHILADELPHIA.

2. THE CONTRACTOR, INSTEAD OF SHIPPING ON GOVERNMENT BILL OF LADING AS HE IS ENTITLED TO DO, PAYS THE FREIGHT OR OTHER TRANSPORTATION EXPENSE WHICH THE GOVERNMENT UNDER THE CONTRACTS IS OBLIGATED TO PAY.

WHERE EITHER OF THESE OR OTHER CIRCUMSTANCES ARE ALLEGED AS AFFECTING THE PRICE TO BE PAID THE CONTRACTOR, AND THE CONTRACTOR REFUSES TO ACCEPT PAYMENT ON THE USUAL BASIS, I.E., THE WASHINGTON PRICE LESS A DEDUCTION OF THE ESTABLISHED FREIGHT CHARGES FROM THE ACTUAL SHIPPING POINT TO WASHINGTON, DISBURSING OFFICERS SHOULD NOT ATTEMPT TO ADJUST THE MATTER OTHERWISE, BUT SHOULD FORWARD THE VOUCHERS WITH ALL CORRESPONDENCE AND WITH SUCH ADDITIONAL EVIDENCE AS THE CONTRACTOR MAY CARE TO SUBMIT, THROUGH ADMINISTRATIVE CHANNELS FOR RECOMMENDATION, ETC., TO THIS OFFICE FOR DIRECT SETTLEMENT AS CLAIMS.

WHERE SUCH CIRCUMSTANCES ARE ALLEGED, AND ARE NOT EXPRESSLY COVERED BY THE PARTICULAR CONTRACT INVOLVED, THE BURDEN OF PROOF AS TO THE ALLEGED FACTS IS STRICTLY ON THE CONTRACTOR, AND CREDIT MAY NOT BE ALLOWED FOR PAYMENTS MADE BY DISBURSING OFFICERS IN EXCESS OF THOSE PAYABLE ON THE USUAL BASIS AS STATED ABOVE, EXCEPT UPON CLEAR AND CONVINCING EVIDENCE THAT SUCH PAYMENTS WERE JUSTIFIED BY REASON OF THE FACT THAT THE SHIPPING POINT OF THE PARTICULAR ORDER WOULD HAVE BEEN DIFFERENT HAD IT BEEN FOR WASHINGTON DELIVERY AND THAT, THEREFORE, FREIGHT CHARGES ONLY FROM SUCH WASHINGTON DELIVERY POINT TO WASHINGTON SHOULD BE DEDUCTED, OR THAT THE CONTRACTOR HAS ACTUALLY PAID TRANSPORTATION EXPENSES ON THE PARTICULAR SHIPMENT WHICH THE UNITED STATES WAS OBLIGATED TO PAY AND THAT, THEREFORE, HE IS ENTITLED TO CREDIT FOR THE PAYMENT OF SUCH EXPENSES. IN THIS CONNECTION, IT MAY BE REAFFIRMED HERE THAT ALLOWANCE MAY NOT BE MADE FOR TRANSPORTATION EXPENSES WHICH THE CONTRACTOR ALLEGES TO HAVE BEEN INCURRED PREVIOUS TO THE ORDER IN SHIPPING STOCKS OF GOODS FROM FACTORIES, ETC., TO WAREHOUSES OR DISTRIBUTING CENTERS EITHER DIRECTLY OR BY ABSORPTION OF THE FREIGHT CHARGES PAID BY PRIOR DEALERS. SUCH CHARGES ARE TOO SPECULATIVE FOR ANY SAVINGS TO THE UNITED STATES TO BE ACCURATELY ASCERTAINED AND IT MUST BE HELD THAT THE CONTRACT ,SHIPPING POINT" SO FAR AS ADJUSTMENTS FOR THE PAYMENT OF TRANSPORTATION CHARGES BY THE CONTRACTOR ARE CONCERNED IS THE POINT FROM WHICH A PARTICULAR ORDER OF SUPPLIES IS ACTUALLY DELIVERED BY THE CONTRACTOR, IRRESPECTIVE OF WHERE THE GOODS WERE ORIGINALLY MANUFACTURED OR ANY TRANSPORTATION CHARGES INCURRED THEREON PRIOR TO THE DELIVERY UNDER THE GOVERNMENT'S ORDER. A 22024, MARCH 26, 1928, SUPRA.

A COMMUNICATION DATED NOVEMBER 16, 1928, FROM THE COMMANDANT OF THE COAST GUARD, ADDRESSED TO THIS OFFICE, RELATIVE TO SOME OF THE QUESTIONS ARISING IN THE ACCOUNTS OF DISBURSING AGENT PECK, IS IN PART AS FOLLOWS: VOUCHER NO. 2979. MR. PECK SUBMITS A LETTER FROM THE GENERAL SUPPLY COMMITTEE IN ANSWER TO AN INQUIRY FROM THE PURCHASING OFFICER OF THE COAST GUARD AT BROOKLYN, .Y., WHICH APPEARS TO HOLD THAT UNDER THE CONDITIONS SHOWN BY THIS VOUCHER, NAMELY, A DELIVERY WITHIN THE CITY OF NEW YORK BY A CHARACTER LOCATED AT THAT POINT AND WHICH, THEREFORE, DOES NOT INVOLVE ANY TRANSPORTATION CHARGES OTHER THAN THE COST OF LOCAL CARTAGE, AN ALLOWANCE EQUIVALENT TO TRANSPORTATION CHARGES TO WASHINGTON IS NOT REQUIRED. THE SUPERINTENDENT OF SUPPLIES FURTHER EXPLAINS THAT PARAGRAPH 6 OF THE SPECIAL INSTRUCTIONS (FORMERLY PARAGRAPH 12, FORM A) IS SUPPOSED TO COVER CASES WHERE A GOVERNMENT BILL OF LADING IS FURNISHED. UPON CONSIDERATION OF THE VOUCHER HERE IN QUESTION, THE SUPERINTENDENT OF SUPPLIES NOW CONCURS, AS DOES THIS OFFICE, IN THE VIEW TAKEN BY THE GENERAL ACCOUNTING OFFICE; NAMELY, THAT PRICES QUOTED IN THE GENERAL SUPPLY CONTRACTS, EXCEPT AS OTHERWISE STATED, CONTEMPLATE DELIVERY IN WASHINGTON, AND THAT ANY ADVANTAGE RESULTING FROM DELIVERY AT OTHER POINTS SHALL ACCRUE TO THE GOVERNMENT.

2. THE POINT MADE BY THE SUPERINTENDENT OF SUPPLIES, THAT THE CONTRACTOR MAKING DELIVERY LOCALLY IN NEW YORK CITY SHOULD BE ENTITLED TO OFFSET AGAINST ALLOWANCE FOR FREIGHT TO WASHINGTON THE COST OF DELIVERY IN NEW YORK CITY, WHICH, OF COURSE, IN MANY CASES WOULD BE GREATER THAN CARTAGE TO FREIGHT STATIONS FOR SHIPMENT, WOULD SEEM TO BE PERTINENT. FOR INSTANCE: IN THE CASE OF THIS SERVICE, DELIVERIES FROM POINTS ON MANHATTAN ISLAND TO THE COAST GUARD STORE (1ST AVENUE AND 58TH STREET, SOUTH BROOKLYN), WOULD INVOLVE NOT ONLY CONSIDERABLE TIME BUT ALSO PROBABLY FERRY CHARGES.

3. ANOTHER ANGLE OF THIS QUESTION WHICH IT IS BELIEVED SHOULD BE GIVEN CONSIDERATION IS THE BASIS FOR ADJUSTMENT WHEN A CONTRACTOR DELIVERS FROM A POINT WHICH WOULD NOT BE THE SHIPPING POINT FOR A DELIVERY TO WASHINGTON. FOR INSTANCE: THE GENERAL SUPPLY CONTRACT FOR ITEM 8670 (A) IS WITH PETER COOPER'S GLUE FACTORY, GOWANDA, NEW YORK WHICH IS PRACTICALLY EQUIDISTANT FROM WASHINGTON (454 MILES) AND NEW YORK (443 MILES). THIS CONCERN HAS MADE DELIVERY AT THE COAST GUARD STORE IN SOUTH BROOKLYN FROM A WAREHOUSE MAINTAINED IN NEW YORK (VOUCHER NO. 35, JULY ACCOUNT, SPECIAL DISBURSING AGENT PECK). IN SUCH A CASE SHOULD THE FREIGHT ALLOWANCE BE THE COST OF SHIPMENT FROM NEW YORK TO WASHINGTON, OR THE DIFFERENCE BETWEEN THE COST OF A LIKE SHIPMENT FROM THE FACTORY AT GOWANDA TO WASHINGTON AND FROM THE SAME POINT TO NEW YORK? THE LATTER APPEARS TO THIS OFFICE TO BE THE CORRECT BASIS, INASMUCH AS THE CONTRACTOR MANIFESTLY HAS ABSORBED THE COST OF SHIPMENT FROM GOWANDA TO NEW YORK CITY IN ANY DELIVERY MADE AT THAT POINT. IN ANOTHER CASE THE CONTRACTOR, NOT A MANUFACTURER, BEING LOCATED IN WASHINGTON, DELIVERY WAS MADE FROM A FACTORY AT NEW YORK CITY. THE CONTRACTOR MAINTAINS THAT THE MANUFACTURER WILL MAKE NO ALLOWANCE TO HIM BECAUSE OF SUCH DELIVERY IN LIEU OF DELIVERY AT WASHINGTON, AND IF AN ALLOWANCE IS REQUIRED EQUIVALENT TO THE FREIGHT TO WASHINGTON HE WILL IN THE FUTURE BE OBLIGED TO EITHER DECLINE TO ACCEPT ORDERS OR MAKE SHIPMENT FROM STOCK ON HAND IN WASHINGTON ON GOVERNMENT BILL OF LADING; IN WHICH CASE, OF COURSE, THE GOVERNMENT WOULD ACTUALLY BE PAYING TRANSPORTATION CHARGES BOTH WAYS BETWEEN NEW YORK AND WASHINGTON.

AS STATED ABOVE, DISBURSING OFFICERS SHOULD NOT ATTEMPT TO ADJUST MATTERS SUCH AS ARE SHOWN TO BE INVOLVED IN THE QUOTED COMMUNICATION. IF A CONTRACTOR IS NOT WILLING TO ALLOW DEDUCTION FOR FREIGHT CHARGES FROM THE ACTUAL SHIPPING POINT TO WASHINGTON, OR CLAIMS AN ADDITIONAL AMOUNT ON ACCOUNT OF PAYING FREIGHT OR OTHER DELIVERY CHARGES THAT SHOULD HAVE BEEN BORNE BY THE GOVERNMENT, THE VOUCHERS SHOULD BE SUBMITTED HERE FOR DIRECT SETTLEMENT. RELATIVE TO THE SETTLEMENT OF SUCH CLAIMS AND THE ADJUSTMENT OF CREDIT IN DISBURSING OFFICER'S ACCOUNTS FOR PAST PAYMENTS, SO FAR AS THE QUESTIONS INVOLVED IN THE QUOTED SUBMISSION ARE CONCERNED, IT MAY BE STATED FIRST THAT CREDIT FOR DELIVERY EXPENSES INCURRED BY THE CONTRACTOR MAY BE ALLOWED ONLY UPON A CLEAR SHOWING OF THE ACTUAL EXPENSES INCURRED BY THE CONTRACTOR, WITH RESPECT TO A PARTICULAR ORDER, IN EXCESS OF THE EXPENSES WHICH WOULD HAVE BEEN INCURRED IN DELIVERY OF THE ORDER TO A COMMON CARRIER FOR SHIPMENT ON GOVERNMENT BILL OF LADING AS CONTEMPLATED BY THE CONTRACT, AND THEN ONLY IN AN AMOUNT NOT IN EXCESS OF THE TRANSPORTATION CHARGES SAVED TO THE UNITED STATES BY REASON OF THE CONTRACTOR'S DELIVERY. THUS WHERE A CONTRACTOR PREPAYS FREIGHT ON AN ORDER FOR DELIVERY TO A FIELD STATION INSTEAD OF USING A GOVERNMENT BILL OF LADING HE MAY BE ALLOWED REIMBURSEMENT THEREFOR NOT TO EXCEED WHAT IT WOULD HAVE COST THE GOVERNMENT HAD THE SHIPMENT BEEN ON GOVERNMENT BILL OF LADING. WHEN THE CONTRACTOR DELIVERS DIRECT BY TRUCK AND CAN SHOW THE AMOUNT THAT SUCH DELIVERY ACTUALLY COST HIM OVER THE COST OF DELIVERY TO A FREIGHT STATION, HE MAY BE REIMBURSED NOT TO EXCEED SUCH AMOUNT AND NOT TO EXCEED WHAT THE GOVERNMENT SAVED THEREBY.

AS TO THE FIRST MATTER STATED IN THE QUOTED PARAGRAPH 3 (RE PETER COOPER'S GLUE FACTORY) FREIGHT SHOULD BE DEDUCTED FROM NEW YORK CITY, THE ACTUAL SHIPPING POINT, TO WASHINGTON, WITH NO ALLOWANCE FOR ESTIMATED FREIGHT CHARGES ALLEGED TO HAVE BEEN PREVIOUSLY ABSORBED BETWEEN GOWANDA AND NEW YORK CITY. SUCH ALLEGED ABSORBED FREIGHT CHARGES ARE TOO SPECULATIVE TO SERVE AS A BASIS FOR ADDITIONAL ALLOWANCE UNDER THE CONTRACT. IF THE CONTRACTOR COULD CLEARLY SHOW THAT THE SHIPMENT WOULD HAVE BEEN FROM GOWANDA IF IT HAD BEEN FOR DELIVERY AT WASHINGTON, SETTLEMENT AS A CLAIM SHOULD BE ON THE BASIS OF FREIGHT CHARGES FROM GOWANDA TO WASHINGTON INSTEAD OF FROM NEW YORK CITY TO WASHINGTON. CONTRACTOR COULD SHOW TRANSPORTATION EXPENSES IN DIRECT DELIVERY BY TRUCK IN NEW YORK CITY IN EXCESS OF DELIVERY EXPENSES REQUIRED BY THE CONTRACT WITH A CORRESPONDING SAVING TO THE GOVERNMENT, THIS, ALSO, WOULD BE FOR CONSIDERATION AS A CLAIM.

RELATIVE TO THE SECOND CASE STATED OF THE DEALER AT WASHINGTON WHO ALLEGES THAT THE MANUFACTURER AT NEW YORK REFUSES TO MAKE HIM AN ALLOWANCE FOR NEW YORK DELIVERY INSTEAD OF WASHINGTON DELIVERY, IT NEED ONLY BE SAID THAT THE ALLEGED SITUATION APPEARS MOST UNUSUAL, BUT THERE APPEARS TO BE NO BASIS UNDER THE GENERAL SUPPLY COMMITTEE CONTRACTS ADJUSTMENTS WITH HIS MANUFACTURER FOR FREIGHT SAVINGS. IF THE SHIPMENT IS CONSIGNED TO THE GOVERNMENT FROM NEW YORK, THE CONTRACT REQUIRES THAT THERE BE DEDUCTED FROM THE CONTRACTOR'S BILL AN AMOUNT EQUIVALENT TO FREIGHT CHARGES ON THE SUPPLIES FROM NEW YORK TO WASHINGTON. AS A CREDIT AGAINST SUCH DEDUCTION, THERE WOULD PROPERLY BE FOR CONSIDERATION IN A CLAIMS SETTLEMENT BY THIS OFFICE, ANY AMOUNT ALLEGED TO HAVE BEEN EXPENDED FOR DIRECT DELIVERY TO THE GOVERNMENT BY TRUCK IN NEW YORK CITY INSTEAD OF BY FREIGHT ON A GOVERNMENT BILL OF LADING, ON THE BASIS HERETOFORE STATED.

IN CONNECTION WITH THE PRESENT MATTER SEVERAL VOUCHERS HAVE BEEN SUBMITTED TO THIS OFFICE FOR DIRECT SETTLEMENT. AMONG THESE ARE VOUCHERS IN FAVOR OF DEALERS WHO MAINTAIN THAT THE CONTRACTS DO NOT REQUIRE DEDUCTION OF FREIGHT CHARGES TO WASHINGTON WHERE DELIVERY IS MADE AT THE CONTRACTOR'S EXPENSE ANYWHERE WITHIN THE WASHINGTON RADIUS OF THEIR SHIPPING POINTS. THIS IS TRUE ONLY WHERE SHIPMENTS WEIGH LESS THAN 100 POUNDS. IT IS PROVIDED IN PARAGRAPH 12 OF FORM A, SUPRA, THAT "ON SHIPMENTS WEIGHING LESS THAN 100 POUNDS THE CONTRACTOR SHALL PAY TRANSPORTATION COSTS TO POINTS WHERE THE CHARGES ARE NOT GREATER THAN TO WASHINGTON, D.C.' BUT WHERE SHIPMENTS ARE OVER 100 POUNDS, IT IS CLEAR THAT UNDER THE EXPRESS PROVISIONS OF SAID PARAGRAPH 12 OF FORM A, THE GOVERNMENT IS ENTITLED TO ANY SAVING OF FREIGHT CHARGES DUE TO DELIVERY AT POINTS NEARER THAN WASHINGTON. IT WOULD BE MANIFESTLY UNFAIR, AS WELL AS CONTRARY TO THE CONTRACT, FOR THE CONTRACTOR TO RETAIN SUCH SAVINGS IN VIEW OF THE FACT THAT THE CONTRACT PRICE IS THE WASHINGTON DELIVERY PRICE AND THE GOVERNMENT IS OBLIGATED TO PAY EXCESS FREIGHT CHARGES FOR DELIVERY TO FIELD POINTS MORE DISTANT THAN WASHINGTON FROM THE SHIPPING POINT. FOLLOWS THAT SETTLEMENT OF SUCH VOUCHERS MUST BE ON THE BASIS OUTLINED ABOVE, THAT IS, BY DEDUCTION OF FREIGHT CHARGES FROM THE SHIPPING POINT TO WASHINGTON WITH AN ALLOWANCE FOR ANY TRANSPORTATION CHARGES PAID BY THE CONTRACTOR WHICH THE GOVERNMENT WAS OBLIGATED TO PAY.

ANOTHER VOUCHER SUBMITTED WAS FOR A SHIPMENT OF LESS THAN 100 POUNDS ON GOVERNMENT BILL OF LADING BY THE EASTMAN KODAK CO. FROM ROCHESTER TO SOUTH BROOKLYN, N.Y. THE SHIPMENT BEING LESS THAN 100 POUNDS AND THE DISTANCE BEING LESS THAN TO WASHINGTON, THE CONTRACTOR SHOULD HAVE PAID THE TRANSPORTATION CHARGES. INSTEAD THE GOVERNMENT PAID THE FREIGHT, AND THE CONTRACTOR'S BILL, INSTEAD OF CARRYING A DEDUCTION THEREFOR, STATES THE F.O.B. ROCHESTER PRICES FOR THE ARTICLES FURNISHED INSTEAD OF THE GENERAL SUPPLY SCHEDULE PRICES. THIS IS NOT MATERIAL TO THE FINAL RESULT IF THE REDUCTION IN PRICES EQUALS THE FREIGHT CHARGES, ROCHESTER TO BROOKLYN, PAID BY THE GOVERNMENT, AND THE VOUCHER WILL BE SETTLED ACCORDINGLY. SHOULD BE STATED, HOWEVER, THAT IT IS MUCH PREFERABLE FROM AN ACCOUNTING STANDPOINT THAT THE BILLS CARRY THE TRUE CONTRACT PRICES, WITH FREIGHT ADJUSTMENTS SHOWN AS SEPARATE ITEMS.

THE SETTLEMENT OF DISBURSING AGENT PECK'S ACCOUNTS, SO FAR AS THE QUESTIONS HERE INVOLVED ARE CONCERNED, AND THE DIRECT SETTLEMENT AS CLAIMS OF THE UNPAID VOUCHERS SUBMITTED WILL BE ON THE BASIS SET FORTH HEREIN, SUBJECT TO FURTHER CONSIDERATION OF SPECIFIC QUESTIONS AS TO WHICH DOUBT MAY STILL EXIST.