A-89176, OCTOBER 12, 1937, 17 COMP. GEN. 325

A-89176: Oct 12, 1937

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CONTRACTOR'S SHIPPING POINT WHERE ARTICLES ARE PURCHASED F.O.B. CONTRACTOR'S SHIPPING POINT AND CONTRACTOR IS INSTRUCTED TO MAKE DELIVERY VIA PARCEL POST. WHERE NO NOTICE IS GIVEN AND THE CONTRACTOR IN GOOD FAITH PAYS THE POSTAL INSURANCE CHARGES. REIMBURSEMENT THEREFOR IS AUTHORIZED. IS FOR DETERMINATION ON THE BASIS OF THAT ACT. 1937: I HAVE YOUR LETTER OF SEPTEMBER 23. ALSO PURCHASES MADE IN THE OPEN MARKET IN ACCORDANCE WITH EXISTING LAW WHEN PRICE IS F.O.B. IT HAS BEEN THE PRACTICE OF THIS DEPARTMENT TO INSTRUCT THE CONTRACTORS TO SEND THE SHIPMENT VIA PARCEL POST WHEN THE TOTAL WEIGHT DOES NOT EXCEED TWENTY POUNDS AND THE DIMENSIONS ARE WITHIN THE LIMITS ALLOWED BY THE POST OFFICE DEPARTMENT.

A-89176, OCTOBER 12, 1937, 17 COMP. GEN. 325

INSURANCE - PARCEL POST SHIPMENTS - PURCHASES F.O.B. CONTRACTOR'S SHIPPING POINT WHERE ARTICLES ARE PURCHASED F.O.B. CONTRACTOR'S SHIPPING POINT AND CONTRACTOR IS INSTRUCTED TO MAKE DELIVERY VIA PARCEL POST, THE CONTRACTOR PROPERLY MAY BE ADVISED THAT THE PARCEL POST PACKAGE SHOULD NOT BE INSURED, BUT WHERE NO NOTICE IS GIVEN AND THE CONTRACTOR IN GOOD FAITH PAYS THE POSTAL INSURANCE CHARGES, REIMBURSEMENT THEREFOR IS AUTHORIZED. HOWEVER, THE INSURANCE OF SHIPMENTS OF "VALUABLES" AS DEFINED IN SECTION 7 OF THE GOVERNMENT LOSSES IN SHIPMENT ACT OF JULY 8, 1937, 50 STAT. 479, IS FOR DETERMINATION ON THE BASIS OF THAT ACT. SEE 17 COMP. GEN. 139.

ACTING COMPTROLLER GENERAL ELLIOTT TO THE SECRETARY OF AGRICULTURE, OCTOBER 12, 1937:

I HAVE YOUR LETTER OF SEPTEMBER 23, 1937, AS FOLLOWS:

IN MAKING PURCHASES FROM CONTRACTS INCLUDED IN THE GENERAL SCHEDULE OF SUPPLIES FOR DELIVERY TO POINTS OTHER THAN WASHINGTON, D.C., IN ACCORDANCE WITH PARAGRAPH 6 OF SPECIAL CONDITIONS, AND ALSO PURCHASES MADE IN THE OPEN MARKET IN ACCORDANCE WITH EXISTING LAW WHEN PRICE IS F.O.B. CONTRACTOR'S SHIPPING POINT, IT HAS BEEN THE PRACTICE OF THIS DEPARTMENT TO INSTRUCT THE CONTRACTORS TO SEND THE SHIPMENT VIA PARCEL POST WHEN THE TOTAL WEIGHT DOES NOT EXCEED TWENTY POUNDS AND THE DIMENSIONS ARE WITHIN THE LIMITS ALLOWED BY THE POST OFFICE DEPARTMENT.

MANY CONTRACTORS WITHOUT AUTHORITY TAKE THE LIBERTY OF INSURING SUCH SHIPMENTS AGAINST LOSS OR DAMAGE, AND WHEN SUBMITTING THEIR BILLS IN THE PRESCRIBED MANNER INCLUDE AS A SEPARATE ITEM THE COST OF INSURANCE. THE PAST WHEN SHIPMENTS MADE VIA PARCEL POST HAVE BEEN LOST OR RECEIVED IN A DAMAGED CONDITION CONTRACTORS HAVE BEEN WILLING TO REPLACE THE SHIPMENT, AND IF SAME HAS BEEN INSURED TO SEEK REIMBURSEMENT FROM THE POST OFFICE DEPARTMENT.

IT WOULD BE IMPOSSIBLE FOR THE CONSIGNEE TO ASSUME THE RESPONSIBILITY IN CASE OF DAMAGE TO OR LOSS OF A SHIPMENT WHEN THE CONSIGNEE DOES NOT HAVE IN HIS POSSESSION PROOF THAT SHIPMENT WAS EVER MADE OR THAT SHIPMENT WAS NOT IN GOOD CONDITION AT THE TIME IT WAS MADE. THEREFORE, IT APPEARS THAT INSURING THE SHIPMENT IS FOR THE PROTECTION OF THE CONTRACTOR AND THE COST RESULTING THEREFROM SHOULD BE BORNE BY HIM.

THE DECISION OF THE COMPTROLLER GENERAL MCCARL DATED DECEMBER 20, 1923, VOL. 3, P. 391, REGARDING THE INSURANCE OF PARCEL POST SHIPMENTS DOES NOT, OF COURSE, COVER THE POINTS PREVIOUSLY MENTIONED, SINCE THIS DECISION HAS REFERENCE TO OFFICIAL MAIL WEIGHING MORE THAN FOUR POUNDS OR TO OTHER SHIPMENTS MADE BY A GOVERNMENT DEPARTMENT OR AGENCY.

IT IS RESPECTFULLY REQUESTED THAT YOU RENDER AN OPINION AS TO WHETHER THE COST OF INSURING PARCEL POST SHIPMENTS MADE BY CONTRACTORS SHOULD OR SHOULD NOT BE PAID BY THE GOVERNMENT.

WHERE PROPERTY IS PURCHASED F.O.B. ORIGIN, OR THE DEALER'S SHIPPING POINT, AS IN THE CASES MENTIONED IN YOUR FIRST PARAGRAPH, ORDINARILY TITLE TO THE PROPERTY PASSES TO THE PURCHASER UPON DELIVERY TO THE CARRIER AT THAT POINT, 20 COMP. DEC. 721; A-86967, JULY 16, 1937; AND THE RISK OF LOSS OR DAMAGE IN TRANSIT FOLLOWS THE TITLE AND IS ASSUMED BY THE PURCHASER, EVEN THOUGH THE PURCHASER ARRANGES WITH THE VENDOR TO PREPAY THE TRANSPORTATION CHARGES SUBJECT TO LATER REIMBURSEMENT. UNITED STATES V. ANDREWS, 207 U.S. 229. IT CANNOT BE HELD, THEREFORE, THAT THE INSURANCE OF SUCH SHIPMENTS BY THE VENDOR IS FOR HIS OWN BENEFIT AND PROTECTION RATHER THAN FOR THE ACCOUNT OF THE PURCHASER.

IT WAS POINTED OUT IN THE DECISION OF DECEMBER 20, 1923, 3 COMP. GEN. 391, CITED IN YOUR LETTER, THAT WHILE IT IS THE SETTLED POLICY OF THE GOVERNMENT NOT TO INSURE ITS PROPERTY, THE MATTER OF PARCEL-POST INSURANCE INVOLVES NOT ONLY INDEMNITY AGAINST LOSS OR DAMAGE BUT THE SPECIAL SERVICE OF REGISTRATION AND MORE CAREFUL HANDLING, AND IT WAS HELD THAT THE GOVERNMENT IS NOT PRECLUDED FROM OBTAINING SUCH SERVICE BY THE MEANS OF PARCEL-POST INSURANCE, PARTICULARLY AS IT IS A MATTER OF SERVICES PERFORMED BY ONE BRANCH OF THE GOVERNMENT FOR OTHER BRANCHES OF THE GOVERNMENT.

IN DECISION OF OCTOBER 9, 1924, A-4411, IT WAS SAID, CONCERNING THE REIMBURSEMENT OF CONTRACTORS FOR PARCEL-POST CHARGES PREPAID ON SUPPLIES PURCHASED BY THE GOVERNMENT, THAT---

IT WOULD BE PROPER TO ADVISE THE SHIPPER, WHERE DELIVERY IS AT POINT OF ORIGIN AND THE TRANSPORTATION AT GOVERNMENT EXPENSE, THAT THE PARCEL-POST PACKAGE SHOULD NOT BE INSURED, BUT WHERE NO NOTICE IS GIVEN AND THE CONTRACTOR IN GOOD FAITH PAYS THE POSTMASTER THE INSURANCE CHARGES, REIMBURSEMENT THEREFOR WOULD BE AUTHORIZED.

THERE APPEARS NO REASON NOW TO MODIFY THIS RULE. WITH RESPECT TO THE INSURANCE AGAINST LOSS, DESTRUCTION, OR DAMAGE IN THE SHIPMENT OF "VALUABLE," ATTENTION IS INVITED TO THE GOVERNMENT LOSSES IN SHIPMENT ACT, PUBLIC, 192, APPROVED JULY 8, 1937, 50 STAT. 479; TO THE DEFINITION OF THE TERM "VALUABLES" IN SECTION 7 OF THE ACT; AND TO DECISION OF AUGUST 14, 1937, TO THE SECRETARY OF THE TREASURY, 17 COMP. GEN. 139.