A-35949, APRIL 13, 1931, 10 COMP. GEN. 462

A-35949: Apr 13, 1931

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CONTRACTS - ADJUSTMENT OF FREIGHT CHARGES WHERE A CONTRACT PROVIDES THAT THE MATERIAL IS TO BE DELIVERED AT A POINT TAKING A SPECIFIED RATE TO DESTINATION AND A PART OF THE SHIPMENT IS MADE FROM A POINT OTHER THAN THAT NAMED IN THE CONTRACT FOR WHICH SHIPMENT THERE IS A LESSER RATE TO DESTINATION. THE FREIGHT RATES ARE TO BE ADJUSTED ON THE BASIS OF THE TOTAL SHIPMENTS UNDER THE CONTRACT AND NOT ON THE BASIS OF EACH SEPARATE SHIPMENT UNDER THE CONTRACT. WHEREIN WAS DISALLOWED ITS CLAIM UNDER CONTRACT NO. 16663. THERE WAS DISALLOWED ALSO CLAIM FOR ITEMS OF 25 CENTS AND $19.18 DEDUCTED AS DISCOUNTS IN MAKING PAYMENT FOR LUMBER DELIVERED UNDER THE CONTRACT. THE REQUEST FOR REVIEW APPARENTLY CONCEDES THAT THE DISALLOWANCE OF THE CLAIM FOR THESE ITEMS WAS PROPER.

A-35949, APRIL 13, 1931, 10 COMP. GEN. 462

CONTRACTS - ADJUSTMENT OF FREIGHT CHARGES WHERE A CONTRACT PROVIDES THAT THE MATERIAL IS TO BE DELIVERED AT A POINT TAKING A SPECIFIED RATE TO DESTINATION AND A PART OF THE SHIPMENT IS MADE FROM A POINT OTHER THAN THAT NAMED IN THE CONTRACT FOR WHICH SHIPMENT THERE IS A LESSER RATE TO DESTINATION, THE FREIGHT RATES ARE TO BE ADJUSTED ON THE BASIS OF THE TOTAL SHIPMENTS UNDER THE CONTRACT AND NOT ON THE BASIS OF EACH SEPARATE SHIPMENT UNDER THE CONTRACT.

DECISION BY COMPTROLLER GENERAL MCCARL, APRIL 13, 1931:

THE NIEDERMEYER-MARTIN LUMBER CO. REQUESTED MARCH 5, 1931, REVIEW OF SETTLEMENT NO. 0169505 (2), DATED FEBRUARY 20, 1931, WHEREIN WAS DISALLOWED ITS CLAIM UNDER CONTRACT NO. 16663, DATED MARCH 4, 1930, FOR ITEMS OF $1.33, $2.82, AND $3.96, REPRESENTING AMOUNTS DEDUCTED ON ACCOUNT OF FREIGHT ADJUSTMENTS. THERE WAS DISALLOWED ALSO CLAIM FOR ITEMS OF 25 CENTS AND $19.18 DEDUCTED AS DISCOUNTS IN MAKING PAYMENT FOR LUMBER DELIVERED UNDER THE CONTRACT, BUT THE REQUEST FOR REVIEW APPARENTLY CONCEDES THAT THE DISALLOWANCE OF THE CLAIM FOR THESE ITEMS WAS PROPER.

THE CONTRACT OF MARCH 4, 1930, WHICH WAS ON STANDARD FORM NO. 32, STANDARD GOVERNMENT FORM OF SUPPLY CONTRACT, WAS FOR THE DELIVERY OF 440,000 BOARD FEET OF NO. 2, COMMON, AIR OR SHIPPING DRY, SPRUCE LUMBER OF VARIOUS DIMENSIONS, F.O.B. POINTS TAKING NO GREATER FREIGHT RATES TO THE NAVY YARD, WASHINGTON, D.C., THAT TILLAMOOK, OREG., FOR AN AGGREGATE OF $8,460. THERE WAS MADE A PART OF THE CONTRACT THE ADVERTISEMENT FOR PROPOSALS, WHICH REQUESTED ALTERNATE BIDS, AS FOLLOWS:

BID A: TO BE DELIVERED, ALL TRANSPORTATION CHARGES PAID, TO THE SUPPLY OFFICER, NAVY YARD, WASHINGTON, D.C., ONE-HALF OF EACH ITEM NOT LATER THAN MAY 1, 1930, AND THE REMAINDER OF EACH ITEM NOT LATER THAN JULY 1, 1930.

BID B: TO BE DELIVERED F.O.B. CARS OR ON WHARF ----------, ONE-HALF OF EACH ITEM NOT LATER THAN APRIL 1, 1930, AND THE REMAINDER OF EACH ITEM NOT LATER THAN JUNE 1, 1930.

UNDER BID B BIDDERS MUST STATE THE EXACT SHIPPING POINT OF THE MATERIAL THEY PROPOSE TO FURNISH AND IT IS AGREED THAT A CHANGE WILL BE MADE ONLY ON THE CONDITION THAT ANY ADDITIONAL TRANSPORTATION CHARGES PAYABLE BY THE GOVERNMENT SHALL BE CHARGED TO THE CONTRACTOR'S ACCOUNT AND THE AMOUNT INVOLVED DEDUCTED FROM PAYMENTS OTHERWISE DUE UNDER THE CONTRACT. CONTRACTORS ARE NOT ENTITLED TO A CREDIT FOR ANY SAVING IN TRANSPORTATION COSTS.

THE CONTRACTOR MADE ITS PROPOSAL ON THE BASIS OF BID B, INSERTING IN THE BLANK SPACE THE PHRASE "POINTS TAKING NO GREATER FREIGHT RATES THAN TILLAMOOK, OREG.' AN EXAMINATION OF THE RECORD DISCLOSES THAT 471,600 POUNDS OF THE LUMBER WERE SHIPPED FROM REEDSPORT, OREG., VIA RAIL TO THE NAVY YARD AND THAT 445,100 POUNDS OF LUMBER WERE SHIPPED FROM REEDSPORT VIA RAIL TO MARE ISLAND, CALIF., FOR TRANSSHIPMENT VIA WATER TO THE NAVY YARD, WASHINGTON, D.C. A TABULATED STATEMENT OF THESE SHIPMENTS, SHOWING THE RATE PAID BY THE GOVERNMENT FROM REEDSPORT ON THE RAIL SHIPMENTS TO THE NAVY YARD, AND THE RATES THAT WOULD HAVE BEEN PAID HAD THE SHIPMENTS MOVED FROM TILLAMOOK, OREG., AS WELL AS THE CHARGES PAID ON THE LUMBER SHIPPED FROM REEDSPORT TO MARE ISLAND, AND THE CHARGES THAT WOULD HAVE BEEN PAID IF THE LUMBER HAD BEEN SHIPPED FROM TILLAMOOK, IS AS FOLLOWS:

CHART

FROM REEDSPORT, OREG., DIRECT TO WASHINGTON, VIA ALL-RAIL ROUTE

RATE AND CHARGES

B/L CAR NO. WEIGHT REEDSPORT TILLAMOOK

64.127 CENTS66.581 CENTS 716362 ------- 9724 74,900 $480.31 $498.69

41216 64,400 412.98 428.78 716363 ------- 36593

71,340 457.48 474.99

29082 67,680 434.01 450.62 716364 ------- 7219

56,580 362.83 376.72

136624 77,060 494.16 513.07

119785 59,640 382.45 397.09

TOTAL --------------- 471,600 3,024.22 3,139.96 DIFFERENCE -------------- - -------- 115.74 ---------

3,139.96 3,139.96

CHART

FROM REEDSPORT, OREG., TO MARE ISLAND, CALIF., VIA RAIL FOR

TRANSSHIPMENT TO THE NAVY YARD, WASHINGTON, D.C., PRESUMABLY BY

ARMY TRANSPORT

RATE AND CHARGES

B/L CAR NO. WEIGHT REEDSPORT TILLAMOOK

22.569 CENTS 22.39 CENTS 716367 --------- 37597

73,660 $166.24 $164.92 716368 --------- 23060 73,560 166.02 164.70

29710 73,520 165.93 164.61

35996 70,180 158.39 157.13716369 --- ----- 18478

79,000 178.30 176.88

31175 75,180 169.67 168.33

TOTAL -------------- 445,100 1,004.55 996.57 DIFFERENCE -------------

----------- ----------- 7.98

1,004.55 1,004.55

THIS TABULATION SHOWS THAT TAKING THE TOTAL FOR THE SHIPMENTS AS MADE ON THE THREE BILLS OF LADING GOING TO WASHINGTON VIA THE ALL-RAIL ROUTE, THE DIFFERENCE IN CHARGES AMOUNTS TO $115.74 IN FAVOR OF REEDSPORT WHENCE THE LUMBER WAS ACTUALLY SHIPPED, AND ON THE THREE BILLS OF LADING GOING TO WASHINGTON VIA MARE ISLAND, THE DIFFERENCE IN FREIGHT CHARGES AMOUNTS TO $7.98, IN FAVOR OF TILLAMOOK. THAT IS TO SAY, THE GOVERNMENT MADE A NET SAVING OF $107.76 IN FREIGHT CHARGES BECAUSE OF THE FACT THAT THE CONTRACTOR MADE THE SHIPMENTS FROM REEDSPORT RATHER THAN FROM TILLAMOOK. IT WILL BE NOTED THAT THE GOVERNMENT ACTUALLY DEDUCTED A TOTAL OF $8.11 AS EXCESS FREIGHT CHARGES ON THE SHIPMENTS MOVING FROM REEDSPORT TO MARE ISLAND RATHER THAN $7.98 BUT THIS DEDUCTION WAS DUE TO A SLIGHT DISCREPANCY IN RECORDED WEIGHTS OF THE LUMBER.

THE DEDUCTION WAS MADE ON THE BASIS THAT EACH SHIPMENT OF LUMBER REQUIRED THE ADJUSTMENT OF FREIGHT CHARGES ON THE BASIS OF THE DIFFERENCE IN RATES BETWEEN POINTS TAKING THE F.O.B. TILLAMOOK RATE TO DESTINATION, WHILE THE CONTRACTOR CONTENDS THAT THE ADJUSTMENT SHOULD BE MADE ON THE BASIS OF THE ENTIRE CONTRACT QUANTITY DELIVERED.

THERE IS NOTHING IN THE ABOVE QUOTED PROVISIONS OF THE CONTRACT SPECIFICATIONS WHICH WOULD AUTHORIZE OR JUSTIFY AN ADJUSTMENT OF THE FREIGHT CHARGES ON THE BASIS OF EACH SEPARATE SHIPMENT. THE CONTRACT IS AN ENTITY AND WHILE SOME DELIVERIES MIGHT HAVE TAKEN A GREATER FREIGHT RATE THAN THE TILLAMOOK RATE TO DESTINATION, OTHERS MIGHT--- AS THEY DID HERE--- TAKE A LESSER FREIGHT RATE. THERE IS NOTHING IN THE CONTRACT WHICH WOULD JUSTIFY CHARGING THE CONTRACTOR WITH THE EXCESS RATES ON SOME OF THE SHIPMENTS AND NOT CREDITING IT WITH THE LESSER RATE ON OTHER SHIPMENTS FOR THE PURPOSE OF DETERMINING WHETHER THE CONTRACTOR SHOULD BE CHARGED WITH EXCESS FREIGHT RATES PAID ON THE CONTRACT QUANTITY OF LUMBER. THE CONTRACTOR IS NOT ENTITLED, UNDER THE TERMS OF THE CONTRACT, TO ANY SAVING IN FREIGHT RATES BUT IT IS NOT CHARGEABLE WITH ANY EXCESS FREIGHT RATES PAID UNLESS THE FREIGHT RATES ON THE TOTAL SHIPMENTS UNDER THE CONTRACT EXCEED THE CHARGES THAT WOULD HAVE BEEN PAID HAD ALL OF THE LUMBER BEEN DELIVERED AT THE POINT TAKING THE CONTRACT F.O.B. RATE TO DESTINATION.

IT RESULTS THAT THE EXCESS FREIGHT CHARGES OF $8.11 WERE IMPROPERLY DEDUCTED AND WILL BE CERTIFIED FOR PAYMENT TO THE CONTRACTOR.