B-116801, APRIL 19, 1954, 33 COMP. GEN. 483

B-116801: Apr 19, 1954

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ON THEORY THAT THEY WILL EQUALIZE MAY NOT BE ADOPTED. 1954: FURTHER REFERENCE IS MADE TO YOUR LETTERS QUESTIONING THE AUDIT BASIS USED BY THE GENERAL ACCOUNTING OFFICE IN DETERMINING THE ALLOWABLE CHARGES FOR FERRY MILEAGES IN CONNECTION WITH THE CHARTER MOVEMENTS OF MILITARY PERSONNEL IN AIRPLANES OPERATED BY MEMBERS OF THE ASSOCIATION. THE CARRIERS ON THEIR INITIAL BILLS WERE NOT. IN SUPPORT OF THE BILLS CERTAIN CHARTER CERTIFICATES WERE FURNISHED WHICH CONTAINED. IT IS UNDERSTOOD THAT THE CHARGES SO CLAIMED WERE IN PURSUANCE OF INFORMAL QUOTATIONS MADE TO THE INTERESTED MILITARY AGENCY THROUGH A REPRESENTATIVE OF THE ASSOCIATION FOR THE PURPOSE OF INDICATING WHAT. THE GOVERNMENT AGENCY OR DEPARTMENT IS UNDERSTOOD TO HAVE AWARDED THE BUSINESS INVOLVED UPON A COMPARISON OF THAT COST WITH THE INDICATED COSTS VIA OTHER AIR CARRIERS AND OTHER MODES OF TRAVEL.

B-116801, APRIL 19, 1954, 33 COMP. GEN. 483

TRANSPORTATION - MILITARY, NAVAL, ETC., PERSONNEL - CHARTERED AIR CARRIERS - AUDIT PROCEDURE CONTRACTS FOR CHARTER OF AIRPLANES FOR MOVING MILITARY PERSONNEL HAVING BEEN LET ON A COMPETITIVE BASIS, ALLOWABLE CHARGES MUST BE DETERMINED ON BASIS OF QUOTATION FURNISHED BY ASSOCIATION REPRESENTING CARRIERS, BUT NOT IN EXCESS OF PUBLISHED TARIFF OTHERWISE APPLICABLE, AND VOUCHERS MUST BE SUPPORTED BY PROOF OF ACTUAL PERFORMANCE OF FERRY MILES CLAIMED; THEREFORE, PROPOSAL THAT THIS OFFICE AGREE TO SET-OFF OF FERRY MILES FLOWN, BUT NOT BILLED, AGAINST FERRY MILES BILLED, BUT NOT FLOWN, ON THEORY THAT THEY WILL EQUALIZE MAY NOT BE ADOPTED, NOR MAY SET-OFF BE PERMITTED OF ALLEGED CREDITS AGAINST DEBITS OF DIFFERENT MEMBERS OF ASSOCIATION.

ASSISTANT COMPTROLLER GENERAL WEITZEL TO RAMSAY D. POTTS, JR., PRESIDENT, INDEPENDENT MILITARY AIR TRANSPORT ASSOCIATION, APRIL 19, 1954:

FURTHER REFERENCE IS MADE TO YOUR LETTERS QUESTIONING THE AUDIT BASIS USED BY THE GENERAL ACCOUNTING OFFICE IN DETERMINING THE ALLOWABLE CHARGES FOR FERRY MILEAGES IN CONNECTION WITH THE CHARTER MOVEMENTS OF MILITARY PERSONNEL IN AIRPLANES OPERATED BY MEMBERS OF THE ASSOCIATION.

IT APPEARS THAT THE CHARGES CLAIMED BY, AND PAID TO, THE CARRIERS ON THEIR INITIAL BILLS WERE NOT, IN SOME INSTANCES AT LEAST, SUPPORTED BY PROOF OF PERFORMANCE OF THE FERRY MILEAGE INDICATED AS CONSTITUTING THE BASIS, IN PART, OF THE CHARGES CLAIMED. IN SUPPORT OF THE BILLS CERTAIN CHARTER CERTIFICATES WERE FURNISHED WHICH CONTAINED, AMONG OTHER THINGS, A STATEMENT OF THE ORIGIN AND DESTINATION POINTS, THE NUMBER OF LIVE AND FERRY MILES INCLUDED IN THE COMPUTATION OF CHARGES, AND THE TOTAL CHARGES TO BE ASSESSED FOR THE SPECIAL LIVE AND FERRY MILES AT INDICATED RATES.

IT IS UNDERSTOOD THAT THE CHARGES SO CLAIMED WERE IN PURSUANCE OF INFORMAL QUOTATIONS MADE TO THE INTERESTED MILITARY AGENCY THROUGH A REPRESENTATIVE OF THE ASSOCIATION FOR THE PURPOSE OF INDICATING WHAT, ACCORDING TO THE ASSOCIATION'S COMPUTATIONS, THE COST OF THE SERVICE WOULD BE, AND THE GOVERNMENT AGENCY OR DEPARTMENT IS UNDERSTOOD TO HAVE AWARDED THE BUSINESS INVOLVED UPON A COMPARISON OF THAT COST WITH THE INDICATED COSTS VIA OTHER AIR CARRIERS AND OTHER MODES OF TRAVEL, THE AWARD BEING TO A MEMBER OF THE ASSOCIATION UPON A DETERMINATION THAT THE AIR TRAVEL COST AS QUOTED WOULD BE THE MOST ECONOMICAL AND SATISFACTORY TO THE GOVERNMENT. IN OTHER WORDS, THE QUOTED CHARGES, BY REASON OF THEIR BEING LOWER THAN CHARGES VIA OTHER MODES OF TRAVEL, TAKING INTO CONSIDERATION SUCH FACTORS AS EXPENSES INCIDENT TO TRANSIT TIME, ETC., EXERCISED A CONTROLLING INFLUENCE ON THE SELECTION OF THE MEMBERS OF THE ASSOCIATION TO PERFORM THE TRANSPORTATION. WHATEVER THE INTENTION OF THE CARRIERS MAY HAVE BEEN IT SEEMS CLEAR THAT IT WAS DEFINITELY IN THEIR INTEREST, FOR COMPETITIVE REASONS, TO MAKE TENDERS OF SERVICES AT CHARGES WHICH WERE FIRM AS TO THE MAXIMUM TO BE ASSESSED BUT WHICH WERE SUBJECT TO REDUCTION IN EVENT A LESSER FERRY MILEAGE SERVICE THAN THAT CONTEMPLATED AT THE TIME OF THE QUOTATION WAS FOUND LATER TO BE POSSIBLE AND ADEQUATE TO THE PERFORMANCE OF THE LIVE MILEAGE TRANSPORTATION INVOLVED.

THE CHARTER CERTIFICATE IS APPARENTLY A FORMALIZATION, EMBODYING PERTINENT DETAILS, OF THE UNDERSTANDING EXISTING BETWEEN THE GOVERNMENT AND THE ASSOCIATION REPRESENTATIVE, ACTING AS AGENT FOR THE CARRIERS, AS TO THE TERMS OF THE ARRANGEMENT UNDERTAKEN PURSUANT TO THE QUOTATION SOMETIME BEFORE THE ISSUANCE OF THE CHARTER CERTIFICATE. AS TO THE CHARGES QUOTED, AND APPARENTLY LATER STATED IN THE CHARTER CERTIFICATE, THERE WOULD NOT SEEM TO BE ANY VALID REQUIREMENT FOR THE GOVERNMENT TO PAY ANY GREATER CHARGE THAN THERE STATED OR, IN EVENT LOWER CHARGES ARE AVAILABLE TO THE PUBLIC UNDER TARIFFS, FOR THE SAME SERVICE, ANY MORE THAN THE CARRIER CAN ESTABLISH AS HAVING BEEN EARNED AT THE CHARTER RATES FIXED BY TARIFF AS APPLICABLE FOR THE SERVICE ACTUALLY PERFORMED. OBVIOUSLY, THE CARRIER COULD NOT, UNDER ITS TARIFFS, CHARGE THE GENERAL PUBLIC FOR SERVICE THAT WAS NOT ACCOMPLISHED OR PERFORMED AND THERE IS NO JUSTIFICATION OR AUTHORITY FOR CHARGING THE GOVERNMENT IN LIKE CIRCUMSTANCES.

IN THE AUDIT, HERE, OF THE CHARGES PAID TO THE CARRIERS CONCERNED, ON THEIR STATEMENTS OF THE SERVICE FOR WHICH PAYMENT WAS DEEMED DUE, IT IS NECESSARY TO ASCERTAIN WHAT LIVE AND FERRY MILES WERE ACTUALLY FLOWN. FOR THAT PURPOSE IT IS NECESSARY TO DEVELOP THE RECORD BY MEANS OF AIRCRAFT LOGS OF THE PLANES USED IN THE SERVICE FURNISHED, FLIGHT REPORTS, OR POSSIBLY OTHER RELIABLE INFORMATION. CONSIDERABLE DIFFICULTY IS BEING EXPERIENCED IN ASSOCIATING THE PERTINENT RECORDS WHICH MAY BE ACCEPTED AS VALIDATING PAYMENT FOR PARTICULAR MOVEMENTS, AND IT HAS BEEN FOUND ALMOST IMPOSSIBLE IN SOME INSTANCES TO CONCLUDE WHAT, IF ANY, ACTUAL MILES WERE FLOWN IN CONNECTION WITH A GIVEN MOVEMENT. IT IS REPORTED BY THE TRANSPORTATION DIVISION OF THIS OFFICE THAT, EVEN IF AN EXHAUSTIVE ANALYSIS OF THE COMPLETE RECORDS OF THE CIVIL AERONAUTICS AUTHORITY WERE UNDERTAKEN, THE RESULTS MIGHT NOT BE SUSCEPTIBLE OF BEING INTERPRETED AS PRESENTING A TRUE PICTURE OF THE FERRY MILES NECESSARILY FLOWN IN CONNECTION WITH THE MOVEMENTS UNDER AUDIT, AND IT IS DOUBTFUL THAT THE INFORMATION THUS OBTAINED COULD BE DEFINITELY RELATED TO EACH AND EVERY MOVEMENT. MOREOVER, EACH CHARTER GOVERNMENT IS A SEPARATE UNIT OF SERVICE FOR WHICH CHARGES SHOULD BE COMPUTED ON THE BASIS OF SEPARATE RATES AND MILEAGES APPLICABLE TO SUCH UNIT. ON THIS PHASE OF THE AUDIT, THE TRANSPORTATION DIVISION HAS DONE EVERYTHING THAT REASONABLY CAN BE EXPECTED TO DEVELOP FERRY MILEAGE RECORDS AND HAS GIVEN RECOGNITION, AS SATISFACTORILY SUPPORTING FERRY MILEAGE CHARGES CLAIMED AND PAID, TO RECORDS WHICH SEEM TO HAVE SOME REASONABLE BEARING ON PARTICULAR MOVEMENTS UNDER CONSIDERATION IN THE AUDIT. IT MAY BE STATED THAT THE BURDEN RESTS UPON CLAIMANTS TO FURNISH EVIDENCE CLEARLY AND SATISFACTORILY ESTABLISHING THEIR CLAIMS. SEE 23 COMP. GEN. 907, 909, AND 17 ID. 831. IT IS ESSENTIAL THAT EVERY TRANSACTION BE EXAMINED ON ITS OWN RECORD AND GENERAL INFORMATION MAY NOT BE RELIED UPON TO REMOVE THE NECESSITY IN EACH TRANSACTION FOR PROOF OF ENTITLEMENT TO CHARGES PAID PRIOR TO AUDIT BY THIS OFFICE.

YOUR LETTERS REFER TO THE GENERAL SITUATION INVOLVED AND DO NOT IDENTIFY ANY SPECIFIC TRANSACTIONS TO WHICH PROPER CONSIDERATION MAY BE GIVEN. THIS OFFICE, THEREFORE, CANNOT UNDERTAKE TO MAKE A PROPER DETERMINATION, IN THIS CONSIDERATION OF YOUR OBJECTIONS, AS TO THE VALIDITY OF THE PAYMENTS MADE BY THE ADMINISTRATIVE AGENCIES IN SUCH PARTICULAR INSTANCES AS YOU MAY HAVE IN MIND. HOWEVER, THE TRANSPORTATION DIVISION HAS FURNISHED A REPORT COVERING ASSOCIATED AIR TRANSPORT, NC., BILLS NOS. AAT- 112 AND AAT-114, WHICH MAY BE CONSIDERED FOR PURPOSES OF ILLUSTRATION. EXAMINATION DISCLOSES THAT ADDITIONAL EVIDENCE DEVELOPED BY THE DIVISION, AS TO THE FLYING OF FERRY MILES, JUSTIFIED THE WITHDRAWAL OF A NOTICE OF OVERPAYMENT OF $468.87, STATED ON BILL NO. ATT-112, AND THE CARRIER WAS NOTIFIED OF THAT WITHDRAWAL IN DECEMBER 1953. THAT BILL COVERED, AMONG OTHERS, A MOVEMENT FROM SYRACUSE, NEW YORK, TO MARCH AIR FORCE BASE, CALIFORNIA, OCTOBER 22, 1951, CAM 649-B. THE CARRIER CLAIMED, AND WAS PAID, A FERRY MILEAGE OF 592 MILES AS FROM CHICAGO, ILLINOIS, TO SYRACUSE, NEW YORK, IN CONNECTION WITH THAT MOVEMENT. UPON REQUEST FOR FACTUAL EVIDENCE TO SUPPORT THE FERRY MILEAGE CLAIMED, IT WAS DISCOVERED EVENTUALLY THAT CAM 616, PERTAINING TO A PRIOR MOVEMENT FROM SYRACUSE, NEW YORK, TO DENVER, COLORADO, OCTOBER 21, 1951, HAD INDICATED A RETURN FLIGHT FROM DENVER TO SYRACUSE VIA MT. CLEMENS, MICHIGAN. CREDIT FOR FERRY MILEAGE TO THE EXTENT OF 802 MILES AS FROM DENVER TO SAN ANTONIO, TEXAS, HAD BEEN CLAIMED, AND PAID, IN CONNECTION WITH THE SYRACUSE-DENVER MOVEMENT AND THE BALANCE OF THE RETURN MOVEMENT TO SYRACUSE, BEING APPARENTLY TO POSITION THE PLANE FOR THE SYRACUSE-MARCH AIR FORCE BASE MOVEMENT, OCTOBER 22, 1951, WAS REGARDED AS SUBSTANTIATING THE CLAIMED FERRY MILEAGE OF 592 MILES, AS FROM CHICAGO TO SYRACUSE, IN CONNECTION WITH THAT MOVEMENT, WITH THE RESULT, AS INDICATED ABOVE, THAT THE NOTICE OF OVERPAYMENT WAS WITHDRAWN.

ON BILL NO. AAT-114, BECAUSE OF ADDITIONAL EVIDENCE, IT WAS FOUND THAT A NOTICE OF OVERPAYMENT OF $1,364.61, AS ORIGINALLY STATED ON TWO TRANSPORTATION REQUESTS, SHOULD BE REDUCED TO $107.71, AS THE AMOUNT OF THE OVERPAYMENT ON TRANSPORTATION REQUEST NO. DA-1016905. THE ORIGINAL NOTICE OF OVERPAYMENT ON THIS BILL COVERED TRANSPORTATION REQUESTS DA 1016905, FOR A MOVEMENT FROM OAKLAND, CALIFORNIA, TO NEWARK, NEW JERSEY, OCTOBER 24, 1951, CAM 666-B, AND DA-1017422 FOR A MOVEMENT FROM OAKLAND, CALIFORNIA, TO COLUMBIA, SOUTH CAROLINA, NOVEMBER 4, 1951, CAM 747-B IN CONNECTION WITH WHICH OVERPAYMENTS OF $190.87 AND $1,173.74, RESPECTIVELY, WERE INDICATED, BECAUSE OF A LACK OF PROPER SUPPORT FOR THE FERRY MILEAGES CLAIMED AND PAID IN CONNECTION WITH THESE MOVEMENTS. A FERRY MILEAGE OF 987 MILES, AS FROM EL PASO, TEXAS, TO OAKLAND TO NEWARK, EXCEEDED THE ACTUAL FERRY FLIGHT OF 746 MILES INDICATED TO HAVE BEEN PERFORMED FROM TUCSON TO OAKLAND OCTOBER 24, 1951. THE OVERPAYMENT OF $190.87 WAS BASED UPON THIS DIFFERENCE. HOWEVER, IT WAS DEVELOPED LATER THAT IN CONNECTION WITH ANOTHER MOVEMENT FROM BURBANK, CALIFORNIA, TO SAN ANTONIO, TEXAS, CAM 650-B, ON THE PRECEDING DAY, FERRY MILEAGE HAD BEEN PERFORMED FROM SAN ANTONIO TO TUCSON, 766 MILES. ON THAT MOVEMENT PAYMENT HAD BEEN MADE FOR FERRY MILEAGE OF 631 MILES CLAIMED AS FROM SAN ANTONIO TO MEMPHIS. THE AGGREGATE OF THE FERRY MILEAGE CLAIMED AND PAID FROM THE DESTINATION OF THE FERRY MILEAGE CLAIMED AND PAID FROM THE DESTINATION OF THE MOVEMENT FROM BURBANK TO SAN ANTONIO, 631 MILES, AND THE FERRY MILEAGE CLAIMED FROM EL PASO TO OAKLAND, 987 MILES, PRELIMINARY TO THE MOVEMENT FROM OAKLAND TO NEWARK, WAS 1,618 MILES, WHICH EXCEEDED THE TOTAL OF 1,512 FERRY MILES (766 MILES FROM SAN ANTONIO TO TUCSON AND 746 FROM TUCSON TO OAKLAND) INDICATED TO HAVE PERFORMED IN FERRY SERVICE FROM THE TERMINATION OF THE LIVE MOVEMENT AT SAN ANTONIO TO THE BEGINNING OF THE LIVE MOVEMENT FROM OAKLAND. ACCORDINGLY, THE PREVIOUSLY INDICATED OVERPAYMENT OF $190.87 ON REQUEST DA-1016905 WAS REDUCED TO $107.71. IT IS SIGNIFICANT TO NOTE THAT THE ADJUSTMENT SO REFLECTED GAVE THE CARRIER CREDIT FOR THE FULL FERRY MILEAGE INDICATED TO HAVE BEEN PERFORMED BETWEEN THESE TWO LIVE MILEAGE FLIGHTS, WHICH NEVERTHELESS WAS LESS THAN THE FERRY MILEAGE PREVIOUSLY CLAIMED AND PAID FOR FERRY SERVICE BETWEEN THOSE FLIGHTS.

AS TO THE OVERPAYMENT OF $1,173.74 ON REQUEST DA-1017422, THE NOTICE OF OVERPAYMENT WAS MADE BECAUSE OF A LACK OF SHOWING THAT THE FERRY MILEAGE OF 1,482 MILES, AS FROM SAN ANTONIO, TEXAS, TO OAKLAND, CALIFORNIA, PRELIMINARY TO THE LIVE MOVEMENT FROM OAKLAND, TO COLUMBIA, SOUTH CAROLINA, NOVEMBER 4, 1951, CAM 747-B, WAS ACTUALLY FLOWN IN CONNECTION WITH THAT LIVE MOVEMENT. SUBSEQUENT INVESTIGATION DEVELOPED THAT THE PLANE IN QUESTION APPARENTLY HAD BEEN MOVED IN FERRY SERVICE FROM WASHINGTON, D.C., TO OAKLAND, VIA MEMPHIS AND ALBUQUERQUE, IN CONNECTION WITH A PRIOR LIVE MOVEMENT FROM LAS VEGAS, NEVADA, TO WASHINGTON, D.C., NOVEMBER 2 AND 3, 1951, AND IN VIEW OF THAT FACT THE NOTICE OF OVERPAYMENT WAS CANCELED.

THE ADJUSTMENTS MADE IN THE ABOVE STATEMENTS OF OVERPAYMENT UPON ADDITIONAL EVIDENCE AND FURTHER INVESTIGATION REFLECT THE EFFORTS THIS OFFICE HAS MADE AND IS MAKING TO ALLOW FULL CREDIT FOR FERRY MILEAGE FLOWN WHEREVER POSSIBLE IN CONNECTION WITH SPECIFIC MOVEMENTS. HOWEVER, WHERE SUFFICIENT EVIDENCE IS NOT AVAILABLE TO ENABLE THIS OFFICE TO ASCERTAIN THE FACT OF PERFORMANCE OF FERRY MILEAGE SERVICE CLAIMED, QUESTIONS WILL BE RAISED AS TO THE PROPRIETY OF FERRY MILEAGE PAYMENTS MADE AND COLLECTION OF OVERPAYMENTS WILL BE ENFORCED.

YOUR MEMORANDUM OF POINTS AND AUTHORITIES RELIED UPON AS REQUIRING THE GOVERNMENT TO PAY FOR FERRY SERVICE PERFORMED, EVEN THOUGH IN EXCESS OF THAT INCLUDED IN THE AMOUNT OF THE BID ON THE BASIS OF WHICH THE CARRIER WAS AWARDED THE CONTRACT FOR THE SERVICE, HAS BEEN CAREFULLY EXAMINED, BUT THIS OFFICE IS UNABLE TO CONCLUDE THAT THE UNITED STATES CAN BE REQUIRED TO PAY A HIGHER AMOUNT FOR A REQUESTED SERVICE THAN THAT WHICH THE CARRIER HELD OUT AS PROPER AND AS AN INDUCEMENT FOR THE AWARD. LIKEWISE, IT DOES NOT APPEAR THAT THE PAYMENT OF MORE THAN THAT WHICH IS PROPERLY CHARGEABLE UNDER TARIFFS WOULD BE JUSTIFIED IN INSTANCES IN WHICH THE APPLICABLE TARIFF CHARGES ARE IN FACT LESS THAN THE BID PRICE. AS TO THE FIRST SITUATION, WHERE THE AWARD IS INDUCED BY REASON OF THE SPECIFICATION BY THE CARRIER OF A DESIGNATED AMOUNT FOR THE SERVICE, IF IT SHOULD DEVELOP THAT THE CARRIER, AS A CONSEQUENCE OF OTHER UNDERTAKINGS, SHOULD PLACE ITS PLANE AT A POINT REQUIRING THE PERFORMANCE OF A GREATER FERRY MILEAGE THAN THAT INCLUDED IN ITS BID FOR POSITIONING THE PLANE AT ORIGIN OF THE AWARDED GOVERNMENT MOVEMENT OR, ON THE OTHER HAND, SHOULD ASSUME AN UNDERTAKING WHICH REQUIRES THE FERRYING OF THE PLANE UPON COMPLETION OF THE GOVERNMENT FLIGHT TO A POINT REQUIRING A GREATER FERRY MILEAGE THAN THAT ON THE BASIS OF WHICH IT SUBMITTED ITS BID FOR THE GOVERNMENT MOVEMENT, IT IS NOT APPARENT WHY THE UNITED STATES SHOULD BE PENALIZED AS A RESULT OF THE ELECTION OF THE CARRIER TO ASSUME THESE OTHER UNDERTAKINGS INCONSISTENT WITH ITS PRIOR HOLDING OUT TO THE GOVERNMENT, PURSUANT TO WHICH IT WAS AWARDED A CONTRACT, WHICH OTHERWISE IT CONCEIVABLY MIGHT NOT HAVE OBTAINED. THE POSITION OF THIS OFFICE, THEREFORE IS, AND IT IS BELIEVED, JUSTIFIABLY SO, THAT THE GOVERNMENT CANNOT, PROPERLY OR LEGALLY, BE REQUIRED TO PAY A GREATER AMOUNT THAN THAT ON THE BASIS OF WHICH IT WAS INDUCED TO AWARD THE CONTRACT TO THE CARRIER OR THAT FOR WHICH THE PUBLIC, UNDER TARIFF AUTHORITY, COULD HAVE PROCURED AND OBTAINED THE SAME SERVICE, IF LOWER THAN THE BID PRICE. IT IS PROPERLY TO BE OBSERVED IN THIS CONNECTION THAT THE CHARTER CERTIFICATES, SUBMITTED BY THE CARRIERS IN SUPPORT OF THEIR BILLS FOR THESE SERVICES, CONTAIN THE FOLLOWING PROVISION:

"IF THE AGREED UPON FERRY MILEAGE CAN BE ELIMINATED OR REDUCED BY RESCHEDULING THE ASSIGNED EQUIPMENT IN REGULAR OR OTHER CHARTERED SERVICES, THE BENEFIT OF SUCH REDUCTION IN FERRY MILES FLOWN SHALL BE CREDITED BACK TO THE CONTRACTING AGENCY AT THE CONTRACT RATE PER MILE.'

CONCERNING YOUR SUGGESTION THAT THIS OFFICE SHOULD AGREE "TO SETTING OFF ON AN ASSOCIATION BASIS AGAINST REFUND FERRY MILEAGE THE EXTENT OF FERRY MILEAGE FLOWN FOR WHICH COMPENSATION WAS NOT RECEIVED," IT IS PROPER TO OBSERVE THAT THIS SUGGESTION WOULD SEEM NECESSARILY TO PRESUPPOSE THAT THE CONTRACT UNDER WHICH THE SERVICES IN QUESTION WERE PROCURED WAS ONE BETWEEN THE GOVERNMENT AND THE ASSOCIATION. SO FAR AS THIS OFFICE HAS BEEN ABLE TO DETERMINE, THE ASSOCIATION, IN ITS FUNCTIONING IN CONNECTION WITH THE PROCUREMENT AND AWARD OF CONTRACTS FOR PERFORMANCE BY ITS MEMBER CARRIERS, ACTS ONLY AS A CONDUIT, OR COMMON AGENCY, FOR THE RECEIPT OF REQUESTS FOR BIDS FROM THE GOVERNMENT AGENCIES, THE TRANSMISSION OF SUCH REQUESTS TO MEMBER CARRIERS, AND THE SUBMISSION TO THE GOVERNMENT AGENCIES OF THE BIDS WHICH THE MEMBER CARRIERS TENDER. THE TRANSPORTATION REQUESTS, ISSUED PURSUANT TO AN AWARD, ARE DRAWN IN THE NAME OF THE MEMBER CARRIER, THE BILL FOR THE SERVICE RENDERED PURSUANT TO THE AWARD IS PRESENTED IN THE NAME OF, AND PAID TO, THE INDIVIDUAL MEMBER PERFORMING THE SERVICE. WHAT BASIS THERE CAN BE, THEREFORE, FOR REGARDING THE ASSOCIATION AS A CONTRACTING PARTY FOR THESE CHARTER SERVICES, ENTITLED TO CREDIT, AGAINST EXCESS FERRY MILEAGE CLAIMED BY, AND PAID TO, ONE MEMBER, FOR EXCESS FERRY MILEAGE THAT MAY HAVE BEEN FLOWN, BUT NOT CLAIMED, BY ANOTHER MEMBER OF THE ASSOCIATION, IS NOT APPARENT. THE GOVERNMENT, IN DEALING WITH CARRIERS, IS ENTITLED TO LOOK TO THE INDIVIDUAL CARRIERS PERFORMING THE SERVICE FOR REFUND OF ANY OVERPAYMENT AND NOT TO THE ASSOCIATION. IN THIS CONNECTION IT IS OBSERVED THAT SECTION 322 OF THE TRANSPORTATION ACT OF 1940, 54 STAT. 898, 955, UNDER WHICH CARRIERS' BILLS ARE PAID PRIOR TO AUDIT BY THIS OFFICE, PROVIDES:

" PAYMENT FOR TRANSPORTATION OF THE UNITED STATES MAIL AND OF PERSONS OR PROPERTY FOR OR ON BEHALF OF THE UNITED STATES BY ANY COMMON CARRIER SUBJECT TO THE INTERSTATE COMMERCE ACT, AS AMENDED, OR THE CIVIL AERONAUTICS ACT OF 1938, 52 STAT. 973, SHALL BE MADE UPON PRESENTATION OF BILLS THEREFOR, PRIOR TO AUDIT OR SETTLEMENT BY THE GENERAL ACCOUNTING OFFICE, BUT THE RIGHT IS HEREBY RESERVED TO THE UNITED STATES GOVERNMENT TO DEDUCT THE AMOUNT OF ANY OVERPAYMENT TO ANY SUCH CARRIER FROM ANY AMOUNT SUBSEQUENTLY FOUND TO BE DUE SUCH CARRIER.'

IT WILL BE NOTED THAT THE AUTHORITY FOR RECOUPMENT BY DEDUCTION FOR OVERPAYMENTS, EXPRESSLY DECLARED BY THIS SECTION, IS DIRECTED FOR EXERCISE IN CONNECTION WITH FUTURE BILLS OF "SUCH CARRIERS.' NO MENTION IS MADE OF AUTHORITY TO ADJUST WITH AN ASSOCIATION, AS AGENT. ACCORDINGLY, THIS OFFICE CANNOT CONCUR IN YOUR SUGGESTION IN THIS REGARD.

WITH RESPECT TO YOUR REFERENCE TO SECTION 321 OF THE TRANSPORTATION ACT OF 1940, 54 STAT. 954, SUPRA, AS ESTABLISHING A REQUIREMENT THAT THE UNITED STATES MUST PAY FULL TARIFF CHARGES, WITH EXCEPTIONS THEREIN NOTED, IT NEED BE OBSERVED ONLY THAT THE CITED PROVISION RELATES TO CARRIERS SUBJECT TO THE INTERSTATE COMMERCE ACT. CARRIERS SUBJECT TO THE CIVIL AERONAUTICS ACT OF 1938, AS AMENDED, SUCH AS ARE HERE INVOLVED, ARE NOT SUBJECT TO SAID PROVISION.

FOR THE REASONS NOTED ABOVE THIS OFFICE IS UNABLE TO ADOPT THE SUGGESTIONS YOU HAVE MADE FOR THE AUDIT OF THESE ACCOUNTS AND WILL PROCEED WITH THE AUDIT ON THE BASIS OF TREATING THE BID PRICE AS THE MAXIMUM AMOUNT PROPERLY CREDITABLE, SUBJECT TO SUCH REDUCTION IN THE BID PRICE FOR THAT PURPOSE AS MAY BE PROPER WHERE THE RECORD DOES NOT ESTABLISH WHAT, IF ANY, FERRY MILEAGE ACTUALLY WAS FLOWN OR WHERE THE FERRY MILEAGE ACTUALLY FLOWN WAS LESS THAN THAT SHOWN AS THE BASIS FOR THE BID, EACH FLIGHT TO BE CONSIDERED AS A UNIT FOR AUDIT PURPOSES.