B-114365, B-139598, B-139994, JUN. 27, 1961

B-114365,B-139598,B-139994: Jun 27, 1961

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TO THE SECRETARY OF THE NAVY: REFERENCE IS MADE TO LETTER DATED MARCH 28. SUCH MATTER WAS THE SUBJECT OF A CONFERENCE ON JANUARY 25. WAS ISSUED. THESE CASES HELD THAT WHERE OCEAN BILLS OF LADING PROVIDED THAT "THE CARRIER SHALL BE DISCHARGED FROM ALL LIABILITY IN RESPECT OF * * * EVERY CLAIM WHATEVER WITH RESPECT TO THE GOODS UNLESS SUIT IS BROUGHT WITHIN ONE YEAR AFTER DELIVERY OF THE GOODS OR THE DATE WHEN THE GOODS SHOULD HAVE BEEN DELIVERED" OR WHERE THE BILL OF LADING INCORPORATED BY REFERENCE THE SIMILAR ONE YEAR TIME BAR CONTAINED IN THE CARRIAGE OF GOODS BY SEA ACT (46 U.S.C. 1301. WITHIN SIX MONTHS AFTER DELIVERY OF THE GOODS OR THE DATE WHEN THE GOODS SHOULD HAVE BEEN DELIVERED.

B-114365, B-139598, B-139994, JUN. 27, 1961

TO THE SECRETARY OF THE NAVY:

REFERENCE IS MADE TO LETTER DATED MARCH 28, 1961, FROM THE ASSISTANT SECRETARY OF THE NAVY (INSTALLATIONS AND LOGISTICS) REQUESTING THAT THE MILITARY SEA TRANSPORTATION SERVICE BE EXCEPTED FROM CERTAIN PROCEDURES SET FORTH IN OUR CIRCULAR LETTER DATED AUGUST 4, 1960, B-139598, B-139994, B-114365, TO THE HEADS OF DEPARTMENTS, INDEPENDENT ESTABLISHMENTS, AND OTHERS CONCERNED, RELATIVE TO CLAIMS FOR LOSS AND DAMAGES TO SHIPMENTS OF GOVERNMENT PROPERTY TRANSPORTED BY OCEAN CARRIERS AND INTERNATIONAL SHIPMENTS BY AIR. SUCH MATTER WAS THE SUBJECT OF A CONFERENCE ON JANUARY 25, 1961, BETWEEN REPRESENTATIVES OF MSTS AND OUR OFFICE.

THE LETTER OF AUGUST 4, 1960, B-139598, B-139994, B-114365, WAS ISSUED, IN PART, BECAUSE OF THE HOLDINGS OF THE FEDERAL COURTS IN UNITED STATES V. SOUTH STAR, 210 F.2D 44; GRACE LINE, INC. V. UNITED STATES, 255 F.2D 810; AND ISTHMIAN S.S.CO. V. UNITED STATES, 359 U.S. 314. THESE CASES HELD THAT WHERE OCEAN BILLS OF LADING PROVIDED THAT "THE CARRIER SHALL BE DISCHARGED FROM ALL LIABILITY IN RESPECT OF * * * EVERY CLAIM WHATEVER WITH RESPECT TO THE GOODS UNLESS SUIT IS BROUGHT WITHIN ONE YEAR AFTER DELIVERY OF THE GOODS OR THE DATE WHEN THE GOODS SHOULD HAVE BEEN DELIVERED" OR WHERE THE BILL OF LADING INCORPORATED BY REFERENCE THE SIMILAR ONE YEAR TIME BAR CONTAINED IN THE CARRIAGE OF GOODS BY SEA ACT (46 U.S.C. 1301, 1303 (6) (, THE FAILURE TO FILE SUIT WITHIN THAT PERIOD EXTINGUISHED THE GOVERNMENT'S CLAIM. IN VIEW OF THAT HOLDING WE INSTRUCTED THAT---

"IN ORDER THAT SUIT, WHERE APPROPRIATE, MAY BE FILED WITHIN THE APPLICABLE PERIOD OF LIMITATIONS AND THUS OBVIATE THE LIMITATIONS PERIOD BEING RAISED AS A DEFENSE, ALL UNADJUSTED LOSS AND DAMAGE CLAIMS IN FAVOR OF THE GOVERNMENT, AGAINST OCEAN CARRIERS AND INTERNATIONAL CARRIERS BY AIR, SHOULD BE REPORTED TO THE TRANSPORTATION DIVISION, GENERAL ACCOUNTING OFFICE, WITHIN SIX MONTHS AFTER DELIVERY OF THE GOODS OR THE DATE WHEN THE GOODS SHOULD HAVE BEEN DELIVERED, REGARDLESS OF THE STATUS OF ANY NEGOTIATIONS WITH THE CARRIER.'

IN THE REQUEST FOR AN EXCEPTION FROM THIS INSTRUCTION THE LETTER OF THE ASSISTANT SECRETARY STATES THAT "NONE OF THE MSTS CONTRACTS OF CARRIAGE CONTAIN ANY SUCH LIMITATION.'

THE LETTER SUGGESTS THE IMPRACTICABILITY, AS TO MSTS TRANSACTIONS AND AS TO NUMEROUS BILLINGS FOR TERMINAL SERVICES FOR THE ARMY AND NAVY, OF COMPLYING WITH OUR DIRECTION THAT---

"* * * TO PERMIT CONSIDERATION OF THE APPLICATION OF "TIME-BARRED" GOVERNMENT LOSS AND DAMAGE CLAIMS AGAINST SIMILARLY TIME-BARRED CLAIMS OF CARRIERS, NO PAYMENTS SHOULD BE MADE ADMINISTRATIVELY OF ANY CLAIM IN FAVOR OF AN OCEAN CARRIER WITH REGARD TO WHICH IT COULD NOT RECOVER IN A COURT ACTION BECAUSE OF THE TWO-YEAR STATUTE OF LIMITATIONS FOR MARITIME CLAIMS AGAINST THE GOVERNMENT IN 46 U.S.C. 745 OR THE SIX YEAR STATUTE OF LIMITATIONS ON OTHER CLAIMS IN 28 U.S.C. 2401. SUCH CLAIMS SHOULD BE FORWARDED TO THE GENERAL ACCOUNTING OFFICE, TRANSPORTATION DIVISION, FOR DIRECT SETTLEMENT * * *.'

THE LETTER OF THE ASSISTANT SECRETARY REPORTS THAT---

"* * * MSTS HAS PENDING AGAINST IT A GREAT VOLUME OF MARITIME CLAIMS WHICH ARE MORE THAN TWO YEARS OLD AND THUS JUDICIALLY TIME BARRED. MANY CLAIMS, BY THEIR INHERENT NATURE, SUCH AS GENERAL AVERAGE CLAIMS, ADMINISTRATIVE APPEALS AND OTHERS OF A LIKE NATURE, RARELY TAKE LESS THAN TWO YEARS TO PROCESS; OTHERS, WHICH INVOLVE SERIOUS INDUSTRY-WIDE DISPUTES OF CONSIDERABLE MAGNITUDE, CANNOT BE EXPECTED TO BE RESOLVED WITHIN THE TWO-YEAR LIMITATION PERIOD. MOST OF THESE CLAIMS ARISE UNDER CONTRACTS CONTAINING A "DISPUTES CLAUSE" REQUIRING MSTS TO MAKE ADMINISTRATIVE DISPOSITION WITH THE RIGHT OF APPEAL TO THE ARMED SERVICES BOARD OF CONTRACT APPEALS (ASBCA). SUCH CLAIMS CANNOT BE ADMINISTRATIVELY SETTLED BY GAO.'

ALSO THE ASSISTANT SECRETARY POINTS OUT THAT THE RELATIVELY FEW TIME- BARRED CLAIMS IN FAVOR OF THE UNITED STATES WHICH OUR OFFICE IS ENDEAVORING TO ADJUST IN CONNECTION WITH TIME-BARRED CLAIMS OF OCEAN CARRIERS WOULD NOT WARRANT FORWARDING HERE FOR SETTLEMENT ALL OF THE LARGE NUMBER OF TIME-BARRED CLAIMS PROCESSED BY MSTS. THE LETTER SUGGESTS INSTEAD THAT UPON BEING ADVISED OF THE NAME AND AMOUNT OF THE TIME-BARRED CLAIMS OF THE UNITED STATES AGAINST OCEAN CARRIERS WHICH WE ARE ENDEAVORING TO ADJUST THAT MSTS WILL TRANSMIT TO OUR OFFICE FOR POSSIBLE OFFSET ANY MERITORIOUS TIME-BARRED CLAIMS BY THE SAME CARRIER THEN BEFORE MSTS.

IN VIEW OF THE FACTS THUS STATED AND BECAUSE THE PROCEDURES SUGGESTED ARE NOT CONTRARY TO BUT RATHER MORE ECONOMICALLY IMPLEMENT THE INTENT OF OUR LETTER OF AUGUST 4, 1960, B-139895, B-139994, B 114365, THE EXCEPTIONS REQUESTED BY YOUR DEPARTMENT FOR THE MILITARY SEA TRANSPORTATION SERVICE ARE APPROVED. ALSO, IN VIEW OF THE REPORT THAT PROBLEMS IN CONNECTION WITH MSTS TRANSMITTING TO OUR OFFICE FOR SETTLEMENT TIME-BARRED CLAIMS OF OCEAN CARRIERS ARISE ALSO IN RESPECT TO BILLINGS FOR TERMINAL OPERATIONS OF THE ARMY AND NAVY, WE AGREE THAT IT WOULD BE ADVISABLE AND WOULD HAVE NO OBJECTION TO THE OTHERWISE PROPER DIRECT ADMINISTRATIVE SETTLEMENT BY THOSE DEPARTMENTS OF SUCH CLAIMS WITHOUT THEIR BEING REFERRED TO OUR OFFICE. THE SECRETARY OF THE ARMY HAS BY LETTER OF TODAY, COPY ATTACHED, BEEN SO ADVISED.