B-117186, JUN 4, 1954

B-117186: Jun 4, 1954

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WHEREIN THERE IS PRESENTED THE PROBLEM OF THE DEPARTMENT OF DEFENSE WITH REFERENCE TO THE USE OF GOVERNMENT BILLS OF LADING FOR MOVEMENT OF SMALL SHIPMENTS. SUBSEQUENT TO THE RECEIPT OF SAID LETTER SEVERAL CONFERENCES HAVE BEEN HAD BETWEEN REPRESENTATIVES OF THE DEPARTMENT OF DEFENSE AND THE MILITARY DEPARTMENTS AND THE TRANSPORTATION DIVISION OF THE GENERAL ACCOUNTING OFFICE AS TO THE MATTERS COVERED IN YOUR LETTER. THE GAO IS PERHAPS MORE VITALLY AWARE THAN ANY OTHER AGENCY. IT IS AWARE OF PRACTICAL PROBLEMS WHICH CONFRONT ADMINISTRATIVE AGENCIES AND IS RECEPTIVE TO ADMINISTRATIVE PROPOSALS WHICH TEND TO PRODUCE OPERATIONAL ECONOMICS AND AT THE SAME TIME PROTECT PROPERLY THE INTERESTS OF THE UNITED STATES.

B-117186, JUN 4, 1954

PRECIS-UNAVAILABLE

MR. MCNEIL, DEPARTMENT OF DEFENSE:

THERE HAS BEEN CONSIDERED YOUR LETTER OF SEPTEMBER 28, 1953, ADDRESSED TO THE COMPTROLLER GENERAL OF THE UNITED STATES, WHEREIN THERE IS PRESENTED THE PROBLEM OF THE DEPARTMENT OF DEFENSE WITH REFERENCE TO THE USE OF GOVERNMENT BILLS OF LADING FOR MOVEMENT OF SMALL SHIPMENTS.

SUBSEQUENT TO THE RECEIPT OF SAID LETTER SEVERAL CONFERENCES HAVE BEEN HAD BETWEEN REPRESENTATIVES OF THE DEPARTMENT OF DEFENSE AND THE MILITARY DEPARTMENTS AND THE TRANSPORTATION DIVISION OF THE GENERAL ACCOUNTING OFFICE AS TO THE MATTERS COVERED IN YOUR LETTER. CONSIDERATION ALSO HAS BEEN ACCORDED THIS MATTER BY INTERESTED COMPONENT ORGANIZATIONS WITHIN THE GAO. VERY RECENTLY THERE HAS BEEN BROUGHT TO ATTENTION A PROPOSAL ADVANCED BY THE DEPARTMENT OF THE AIR FORCE, LIMITED IN APPLICATION TO SHIPMENTS OF PROPERTY MOVING UNDER COST PLUS FIXED FEE AND COST REIMBURSABLE TYPE CONTRACTS, BY WHICH CONTRACTORS WOULD BE AUTHORIZED TO UTILIZE COMMERCIAL SHIPPING DOCUMENTS UNDER CERTAIN CONDITIONS.

THE GAO IS PERHAPS MORE VITALLY AWARE THAN ANY OTHER AGENCY, BY REASON OF ITS LEGAL RESPONSIBILITIES, OF THE EXISTENCE IN CARRIER BILLINGS OF PERSISTENT PATTERNS OF OVERPAYMENTS AND IT VIEWS WITH GRAVE CONCERN ANY DIMINUTION OF PROTECTION OF THE INTERESTS OF THE UNITED STATES. NEVERTHELESS, IT IS AWARE OF PRACTICAL PROBLEMS WHICH CONFRONT ADMINISTRATIVE AGENCIES AND IS RECEPTIVE TO ADMINISTRATIVE PROPOSALS WHICH TEND TO PRODUCE OPERATIONAL ECONOMICS AND AT THE SAME TIME PROTECT PROPERLY THE INTERESTS OF THE UNITED STATES.

AFTER DUE CONSIDERATION OF THE PROPOSAL ADVANCED IN THE DEPARTMENT OF DEFENSE BY THE DEPARTMENT OF THE AIR FORCE, AND LIMITING APPLICATION THEREOF SOLELY TO THE AREA OF CPFF AND CR TYPE CONTRACTS, THERE IS AGREEMENT HERE THAT AIR FORCE CONTRACTORS MAY UTILIZE COMMERCIAL SHIPPING DOCUMENTS IN CONNECTION WITH FREIGHT SHIPMENTS (1) NOT EXCEEDING 1,000 POUNDS WHEN SHIPPED BY RAIL OR TRUCK OR FREIGHT FORWARDER; (2) NOT EXCEEDING 100 POUNDS WHEN SHIPPED BY RAILWAY EXPRESS AND (3) NOT EXCEEDING 50 POUNDS WHEN SHIPPED AS A COMMERCIAL AIR MOVEMENT.

THE FOREGOING IS CONDITIONED UPON THE ESTABLISHMENT OF DEPARTMENTAL TECHNICAL SUPERVISION OVER EACH PRIME CONTRACTOR'S PERSONNEL TO INSURE THAT; (A) PARCEL POST AND AIR PARCEL POST ARE USED WHEN SHIPMENTS FALL WITHIN THE SIZE AND WEIGHT LIMITATIONS; (B) SMALL SHIPMENTS ARE CONSOLIDATED WHEREVER POSSIBLE FOR MOVEMENT IN CARLOAD OR TRUCKLOAD LOTS AND TO PREVENT ABUSE OF THE 1,000-POUND LIMITATION SET FORTH ABOVE; (C) THE MOST ECONOMICAL MODE OF TRANSPORTATION IS UTILIZED, COST OF SERVICES BEING CONSIDERED; (D) PREMIUM TRANSPORTATION IS USED ONLY IN THE PROPER EXERCISE OF ADMINISTRATIVE JUDGEMENT; AND (E) THAT COMMERCIAL SHIPPING DOCUMENTS BE EXECUTED TO REFLECT PROPER AND COMPLETE DESCRIPTION OF SHIPMENTS, MAKE REFERENCE TO THE AIR FORCE CONTRACT TO WHICH THEY PERTAIN, AND SPECIFY MOVEMENT VIA AUTHORIZED COMMERCIAL CARRIERS OVER REGULAR ROUTES.

IN CONNECTION WITH THE SUBJECT MATTERS OF THE LETTER OF SEPTEMBER 28, 1953, MENTIONED ABOVE, AND THE PROPOSALS OF THE AIR FORCE TO WHICH AGREEMENT HERE IS INDICATED AS ABOVE, THERE ARISES FOR CONSIDERATION JOINTLY BY THE DEPARTMENT OF DEFENSE AND THIS OFFICE THE MATTER OF REQUIRING CONTRACTORS OPERATING UNDER CPFF AND CR TYPE CONTRACTS, AS EXECUTED WITH THE DEPARTMENTS OF THE ARMY AND NAVY, TO UTILIZE GOVERNMENT BILLS OF LADING FOR SHIPMENTS FOR THE ACCOUNT OF THE UNITED STATES SUBJECT TO THE SAME PRACTICAL LIMITATIONS AS AUTHORIZED ABOVE. IN ORDER TO ELIMINATE BURDENSOME CORRESPONDENCE AND TO ACCELERATE CONSIDERATION THEREOF, I HAVE SELECTED MR. R. L. LONG, DIRECTOR, DIVISION OF AUDITS, AND MR. R. O. HOAGLAND, DIRECTOR, TRANSPORTATION DIVISION, OR THEIR ALTERNATES, TO DISCUSS THESE MATTERS WITH SUCH REPRESENTATIVES AS YOU MAY SELECT.

WE WOULD APPRECIATE AN EXPRESSION OF YOUR VIEWS.